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UNITED STATES
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): July 21, 1997
.......................
VENCOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-10989 61-1055020
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
3300 Providian Center
400 West Market Street
Louisville, Kentucky
(Address of principal executive offices)
40202
(Zip Code)
Registrant's telephone number, including area code: (502) 596-7300
Not Applicable
(Former name or former address, if changed since last report.)
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ITEMS 1-4. NOT APPLICABLE.
ITEM 5. OTHER INFORMATION.
On July 21, 1997, Vencor, Inc. (the "Company") completed the private
placement (the "Notes Offering") of $750 million aggregate principal amount of
Senior Subordinated Notes due 2007 (the "Notes"). The Notes have a coupon of
8.625% and were priced at 99.575% of principal. After a discount of two percent
and expenses of the Notes Offering, the net proceeds to the Company approximated
$731 million. The Notes are not callable until July 15, 2002. The Notes
Offering was managed by J.P. Morgan & Co., NationsBanc Capital Markets, Inc.,
Goldman, Sachs & Co. and Merrill Lynch & Co.
The Company intends to use the net proceeds from the Notes Offering to
reduce outstanding borrowings under the Company's $2.0 billion senior bank
credit facility.
The Notes have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements. The issuance of the Notes was structured to allow secondary
market trading under Rule 144A of the Securities Act. The Notes were issued
without registration under the Securities Act in reliance on the exemption
provided by Rule 144A under the Securities Act for offers only to "Qualified
Institutional Buyers" as defined under Rule 144A and in accordance with
Regulation S of the Securities Act for offers outside the United States.
ITEM 6. NOT APPLICABLE.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
1.1 Purchase Agreement dated as of July 16, 1997 among Vencor, Inc., J.P.
Morgan Securities Inc., NationsBanc Capital Markets, Inc., Goldman,
Sachs & Co., and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
4.1 Form of 8 5/8% Senior Subordinated Notes Due 2007 (included in Exhibit
4.2).
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4.2 Indenture dated as of July 21, 1997 between Vencor, Inc. and The Bank
of New York, as Trustee.
99.1 Registration Rights Agreement dated as of July 21, 1997 by and among
Vencor, Inc., J.P. Morgan Securities Inc., NationsBanc Capital
Markets, Inc., Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner
& Smith Incorporated.
ITEM 8. NOT APPLICABLE.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
In connection with the Notes Offering, the Company sold $1,480,000 in
principal amount of the Notes on July 21, 1997 in reliance upon Regulation S
under the Securities Act. These Notes were issued without registration in
reliance upon the exemption afforded by Regulation S under the Securities Act.
See Item 5 for additional information with respect to the Notes Offering.
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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.
VENCOR, INC.
Dated: July 31, 1997 By: /s/ W. Bruce Lunsford
------------------------------------
W. Bruce Lunsford
Chairman of the Board,
President and Chief
Executive Officer
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EXHIBIT 1.1
$750,000,000
VENCOR, INC.
8 5/8% SENIOR SUBORDINATED NOTES DUE 2007
Purchase Agreement
July 16, 1997
J.P. Morgan Securities Inc.
NationsBanc Capital Markets, Inc.
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260-0060
Ladies and Gentlemen:
Vencor, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the several initial purchasers listed in Schedule I hereto (the "Initial
Purchasers") $750,000,000 aggregate principal amount of its 8 5/8% Senior
Subordinated Notes due 2007 (the "Securities"). The Securities will be issued
pursuant to the provisions of an indenture to be dated as of July 21, 1997 (the
"Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee").
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The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions therefrom.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum dated June 25, 1997 (the "Preliminary
Memorandum") and has prepared a final offering memorandum dated the date hereof
(the "Final Memorandum" and, with the Preliminary Memorandum, collectively, the
"Offering Memorandum"), for the information of the Initial Purchasers and for
delivery to prospective purchasers of the Securities. As used herein, the terms
"Preliminary Memorandum" and "Final Memorandum" shall include in each case the
documents incorporated by reference therein. The terms "supplement",
"amendment" and "amend" with respect to the Preliminary Memorandum and the Final
Memorandum shall be deemed to refer to and include the filing of any document
with the Securities and Exchange Commission (the "Commission") deemed to be
incorporated by reference therein.
The purchasers of the Securities and their direct and indirect transferees
will be entitled to the benefits of a Registration Rights Agreement, to be dated
as of the Closing Date and to be substantially in the form attached hereto as
Exhibit A (the "Registration Rights Agreement"), pursuant to which the Company
will file one or more registration statements with the Commission registering
with the Commission the Securities or the Exchange Securities referred to (and
as defined) in such Registration Rights Agreement.
The Company hereby agrees with the Initial Purchasers as follows:
1. The Company agrees to issue and sell the Securities to the several
Initial Purchasers as hereinafter provided, and each Initial Purchaser, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto at a price (the
"Purchase Price") equal to 97.575% of their principal amount plus accrued
interest, if any, from July 21, 1997 to the date of payment and delivery.
2. The Company understands that the Initial Purchasers intend (i) to
offer privately and pursuant to Regulation S under the Securities Act
("Regulation S") their respective portions of the Securities as soon after this
Agreement has become effective as in the judgment of the Initial Purchasers is
advisable and (ii) initially to offer the Securities upon the terms set forth in
the Offering Memorandum.
The Company confirms that it has authorized the Initial Purchasers, subject
to the restrictions set forth below, to distribute copies of the Offering
Memorandum in connection with the offering of the Securities. Each Initial
Purchaser hereby makes to the Company the following representations and
agreements:
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(i) it is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act; and
(ii) (A) it will not solicit offers for, or offer to sell, the
Securities by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act ("Regulation
D") and (B) it will solicit offers for the Securities only from, and will
offer the Securities only to, persons who it reasonably believes to be (x)
in the case of offers inside the United States, "qualified institutional
buyers" within the meaning of Rule 144A under the Securities Act and (y) in
the case of offers outside the United States, to persons other than U.S.
persons ("foreign purchasers", which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust) that,
in each case, in purchasing the Securities are deemed to have represented
and agreed as provided in the Offering Memorandum.
With respect to offers and sales outside the United States, as described in
clause (ii)(B)(y) above, each Initial Purchaser hereby represents and agrees
with the Company that:
(i) it understands that no action has been or will be taken by the
Company that would permit a public offering of the Securities, or
possession or distribution of the Offering Memorandum or any other offering
or publicity material relating to the Securities, in any country or
jurisdiction where action for that purpose is required;
(ii) it will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or
has in its possession or distributes the Offering Memorandum or any such
other material, in all cases at its own expense;
(iii) it understands that the Securities have not been and will not
be registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Securities Act or
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act;
(iv) it has offered the Securities and will offer and sell the
Securities (x) as part of its distribution at any time and (y) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S.
Accordingly, neither such Initial Purchaser, nor any of its Affiliates, nor
any persons acting on their behalf has engaged or will
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engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Securities, and such Initial Purchaser, its Affiliates
and any such persons have complied and will comply with the offering
restrictions requirement of Regulation S; and
(v) it agrees that, at or prior to confirmation of sales of the
Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise prior to 40 days after the closing of the offering, except
in either case in accordance with Regulation S (or Rule 144A, if
available) under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in this Section 2 and not otherwise defined in this Agreement
have the meanings given to them by Regulation S.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company at 10:00
A.M. on July 21,1997, or at such other time on the same or such other date, not
later than the fifth Business Day thereafter, as the Initial Purchasers and the
Company may agree upon in writing. The time and date of such payment are
referred to herein as the "Closing Date". As used herein, the term "Business
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City.
Payment for the Securities shall be made against delivery of the
certificates evidencing the Securities registered in such names and issued in
such denominations as the Initial Purchasers shall request no later than two
Business Days prior to the Closing Date, at the office of Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017 or at such other location as the
Initial Purchasers and the Company may agree, with any transfer taxes payable in
connection with the transfer to the Initial Purchasers of the Securities duly
paid by the Company. The certificates for the Securities will be made available
for inspection by the Initial Purchasers at the office of J.P. Morgan Securities
Inc. at the address set forth above not later than 10:00 A.M., New York City
time, on the Business Day prior to the Closing Date.
4. The Company represents and warrants to each Initial Purchaser that:
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(a) the Preliminary Memorandum did not, as of its date, and the Final
Memorandum will not, in the form used by the Initial Purchasers to confirm
sales of the Securities and as of the Closing Date, contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the circumstances
existing at such dates, not misleading; provided, however, that this
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representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information relating to any
Initial Purchaser furnished to the Company in writing by such Initial
Purchaser expressly for use therein;
(b) the documents incorporated by reference in the Final Memorandum,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; and any further documents so filed and
incorporated by reference in the Final Memorandum, when such documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(c) the financial statements, and the related notes thereto, included
or incorporated by reference in the Offering Memorandum present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries and of Transitional Hospitals Corporation and its consolidated
subsidiaries as of the dates indicated and the results of their operations
and the changes in their consolidated cash flows for the periods specified;
and said financial statements have been prepared in conformity with
generally accepted accounting principles and practices applied on a
consistent basis; and the pro forma financial information, and the related
notes thereto, included or incorporated by reference in the Offering
Memorandum is based upon good faith estimates and assumptions believed by
the Company to be reasonable;
(d) since the respective dates as of which information is given in the
Preliminary Memorandum and Final Memorandum, there has not been any
material increase in the long-term debt of the Company or any of its
subsidiaries, or any material adverse change or any development involving a
prospective material adverse change, in or affecting the business,
prospects, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as a whole
otherwise than as set forth or contemplated in the Offering Memorandum; and
except as set forth or contemplated in the Offering Memorandum, neither the
Company nor any of its subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) material to
the Company and its subsidiaries taken as a whole;
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(e) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering
Memorandum, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(f) each of the Company's Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Offering Memorandum, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each jurisdiction in which it owns or leases properties or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole; and all the
outstanding shares of capital stock of each Significant Subsidiary of the
Company have been duly authorized and validly issued, are fully-paid and
non-assessable, and (except for any directors' qualifying shares and except
as described in the Offering Memorandum) are owned by the Company, directly
or indirectly, free and clear of all liens, encumbrances, security
interests and claims. As used herein, the term "Significant Subsidiary"
means any subsidiary of the Company that, together with its subsidiaries
accounts for more than 10% of the consolidated revenues of the Company and
its consolidated subsidiaries or (ii) is the owner of more than 10% of the
consolidated assets of the Company and its consolidated subsidiaries;
(g) this Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding agreement of the Company;
(h) the Securities have been duly authorized, and, when executed,
authenticated and issued under the Indenture and delivered to and paid for
by the Initial Purchasers pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
binding obligations of the Company entitled to the benefits provided by the
Indenture; the Indenture has been duly authorized and, when executed and
delivered by the Company and the Trustee, the Indenture will constitute a
valid and binding instrument of the Company; and the Securities and the
Indenture conform to the descriptions thereof in the Offering Memorandum;
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(i) the Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding instrument of, the
Company; and the Registration Rights Agreement conforms to the description
thereof in the Offering Memorandum;
(j) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under (I) its Certificate of Incorporation or By-Laws, (II) any
indenture, mortgage, deed of trust or loan agreement or (III) any other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them or any of their respective properties
is bound, except for violations and defaults which individually and in the
aggregate are not material to the Company and its subsidiaries taken as a
whole; the issue and sale of the Securities and the execution, delivery and
performance by the Company of its obligations under the Securities, the
Indenture, the Registration Rights Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries, under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will any such action
result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its subsidiaries or
any of their respective properties, except for such conflicts, breaches,
defaults, liens, charges, encumbrances and violations that would not have,
or would not reasonably be expected to have, a material adverse effect on
the Company and its subsidiaries taken as a whole; and no consent,
approval, authorization, order, license, registration, qualification or
notice of or with any court or governmental agency or body is required for
the issue and sale of the Securities or the consummation by the Company of
the transactions contemplated by this Agreement, the Registration Rights
Agreement or the Indenture, except such consents, approvals,
authorizations, orders, licenses, registrations, qualifications or notices
as may be required under (i) state securities or Blue Sky Laws in
connection with the purchase and distribution of the Securities by the
Initial Purchasers or (ii) under the Securities Act with respect to the
registration of the Exchange Securities pursuant to the terms of the
Registration Rights Agreement;
(k) other than as set forth or contemplated in the Final Memorandum,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its subsidiaries or any of their
respective properties or to which the Company or any of its subsidiaries is
or may be a party or to which any property of the Company or any of its
subsidiaries is or may be the subject which, if determined adversely to the
Company or any of its
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subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(l) neither the Company, nor any affiliate (as defined in Rule 501(b)
of Regulation D) of the Company has directly, or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or
will be integrated with the sale of the Securities in a manner that would
require the registration under the Securities Act of the offering
contemplated by the Offering Memorandum;
(m) none of the Company, any affiliate (as defined in Rule 501(b) of
Regulation D) of the Company or any person acting on behalf of any of them
has offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities
Act or, with respect to Securities sold outside the United States to non-
U.S. persons (as defined in Rule 902 under the Securities Act) by means of
any directed selling efforts within the meaning of Rule 902 under the
Securities Act and the Company, any affiliate of the Company and any person
acting on behalf of any of them has complied with and will implement the
"offering restrictions" requirements of Regulation S;
(n) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(o) assuming the accuracy of the representations of the Initial
Purchasers contained in Section 2 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities in the manner
contemplated by this Agreement to register the Securities under the
Securities Act or to qualify an indenture under the Trust Indenture Act of
1939, as amended;
(p) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended;
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(q) Ernst & Young LLP, who have audited certain financial statements
of the Company and its subsidiaries, are independent public accountants
with respect to the Company and its subsidiaries as required by the
Securities Act;
(r) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or affiliate
located in Cuba;
(s) the Company and its subsidiaries have filed all Federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith, except where the failure to file such returns or
to pay such taxes or assessments would not have, or would not reasonably be
expected to have, a material adverse effect on the Company and its
subsidiaries taken as a whole; and, except as disclosed in the Offering
Memorandum there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any subsidiary
which could have, or reasonably be expected to have, a material adverse
effect on the Company and its subsidiaries taken as a whole;
(t) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings
with, all Federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, except where the failure
to own, possess or obtain such license, permit, certificate, consent,
order, approval or other authorization would not have, or would not
reasonably be expected to have, a material adverse effect on the Company
and its subsidiaries taken as a whole, and except as described in the
Offering Memorandum, neither the Company nor any such subsidiary has
received any notice of any proceedings relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization which revocation or modification could
have, or reasonably be expected to have, a material adverse effect on the
Company and its subsidiaries taken as a whole; and each of the Company and
its subsidiaries is in compliance with all laws and regulations relating to
the conduct of its business as conducted as of the date hereof, except
where such noncompliance would not have, or would not reasonably be
expected to have, a material adverse effect on the Company and its
subsidiaries taken as a whole;
(u) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which could
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have, or reasonably be expected to have, a material adverse effect on the
Company and its subsidiaries taken as a whole; and
(v) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, Federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not have, or would
not reasonably be expected to have, a material adverse effect on the
Company and its subsidiaries taken as a whole.
5. The Company covenants and agrees with each of the several Initial
Purchasers as follows:
(a) to deliver to the Initial Purchasers as many copies of the
Preliminary Memorandum, the Final Memorandum and any documents incorporated
by reference therein (including any amendments and supplements thereto) as
the Initial Purchasers may reasonably request;
(b) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Initial Purchasers a copy of the proposed
amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Initial Purchasers reasonably object;
(c) if, at any time prior to the completion of the initial placement
of the Securities, any event shall occur as a result of which it is
necessary to amend or supplement the Offering Memorandum in order to make
the statements therein, in the light of the circumstances when the Offering
Memorandum is delivered to a Initial Purchaser, not misleading, or if it is
necessary to amend or supplement the Offering Memorandum to comply with
law, forthwith to prepare and furnish, at the expense of the Company, to
the Initial Purchasers and to the dealers (whose names and addresses the
Initial Purchasers will furnish to the Company) to which Securities may
have been sold by the Initial Purchasers on behalf of the Initial
Purchasers and to any other dealers upon request, such amendments or
supplements to the Offering Memorandum as may be necessary so that the
statements in the Offering Memorandum as so amended or supplemented will
not, in the light of the circumstances when the Offering Memorandum is
delivered to a purchaser, be misleading or so that the Offering Memorandum
will comply with law;
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(d) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Securities; provided
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that the Company shall not be required (i) to register or qualify as a
foreign corporation in any jurisdiction where it would not otherwise be
required to register or qualify, (ii) to file a general consent to service
of process or (iii) to subject itself to taxation in any such jurisdiction
if it is not so subject;
(e) so long as the Securities are outstanding, to furnish to the
Initial Purchasers copies of all reports or other communications (financial
or other) furnished to holders of Securities, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange or inter-dealer quotation system;
(f) during the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, not to offer,
sell, contract to sell, or otherwise dispose of any debt securities of or
guaranteed by the Company which are substantially similar to the Securities
without the prior written consent of the Initial Purchasers;
(g) to use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement in the manner specified in the
Offering Memorandum under the caption "Use of Proceeds";
(h) to cooperate with the Initial Purchasers to cause the Securities
to be eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(i) to use its best efforts to have the Securities accepted for
settlement through DTC, Euroclear and Cedel (the Company hereby confirms
that it has authorized the Initial Purchasers to take steps necessary for
that purpose);
(j) during the period of two years after the Closing Date, the Company
will not, and will not permit any of its "affiliates" (as defined in Rule
144 under the Securities Act) to, resell any of the Securities that have
been reacquired by any of them;
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
fees, costs and expenses (i) incident to the preparation, issuance,
execution, authentication and delivery of the Securities, including any
expenses of the Trustee, (ii) incident to the preparation, printing and
distribution of the Preliminary Memorandum and the Final Memorandum
(including in each case all
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exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the
Initial Purchasers may designate (including fees of counsel for the Initial
Purchasers and their disbursements), (iv) in connection with the approval
for trading of the Securities on any securities exchange or inter-dealer
quotation system (as well as in connection with the designation of the
Securities as PORTAL securities), (v) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Registration Rights Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and the furnishing to the
Initial Purchasers and dealers of copies of the Offering Memorandum,
including mailing and shipping, as herein provided, (vi) related to any
filing with the National Association of Securities Dealers, Inc., (vii)
payable to rating agencies in connection with the rating of the Securities,
and (viii) any expenses incurred by the Company in connection with a "road
show" presentation to potential investors;
(l) the Company will not take any action prohibited by Regulation M
under the Exchange Act, in connection with the distribution of the
Securities contemplated hereby;
(m) none of the Company, any of its affiliates (as defined in Rule
501(b) of Regulation D) or any person acting on behalf of the Company or
such affiliate will solicit any offer to buy or offer or sell the
Securities by means of any form of general solicitation or general
advertising, including: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising;
(n) none of the Company, any of its affiliates (as defined in Rule
144(a)(1) under the Securities Act) or any person acting on behalf of any
of them will engage in any directed selling efforts with respect to the
Securities within the meaning of Regulation S;
(o) none of the Company, any of its affiliates (as defined in
Regulation 501(b) of Regulation D) or any person acting on behalf of them
will sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in the Securities Act) which will be
integrated with the sale of the Securities in a manner which would require
the registration under the Securities Act of the Securities, and the
Company will take all action that is appropriate or necessary to assure
that its offerings of other securities will not be integrated for purposes
of the Securities Act with the offerings contemplated hereby;
(p) to comply with all of the terms and conditions of the Registration
Rights Agreement; and
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(q) prior to any registration of the Securities pursuant to the
Registration Rights Agreement, or at such earlier time as may be so
required, to qualify the Indenture under the Trust Indenture Act of 1939,
as amended (the "TIA"), and to enter into any necessary supplemental
indentures in connection therewith.
6. The several obligations of the Initial Purchasers hereunder to
purchase the Securities on the Closing Date are subject to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) the representations and warranties of the Company contained herein
are true and correct on and as of the Closing Date as if made on and as of
the Closing Date and the Company shall have complied with all agreements
and all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(b) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any downgrading, (ii) any
intended or potential downgrading or (iii) any review or possible change
that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization", as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act;
(c) since the respective dates as of which information is given in the
Offering Memorandum, there shall not have been any material increase in the
long-term debt of the Company or any of its subsidiaries, or any material
adverse change or any development involving a prospective material adverse
change, in or affecting the business, prospects, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Offering Memorandum, the effect of which in the
judgment of the Initial Purchasers makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the Closing
Date on the terms and in the manner contemplated in the Offering
Memorandum; and neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order to decree, otherwise than as
set forth or contemplated in the Offering Memorandum;
(d) the Initial Purchasers shall have received on and as of the
Closing Date a certificate of the Chief Financial Officer or Chief
Accounting Officer of the Company to the effect set forth in subsections
(a) and (b) of this Section and to the further effect that
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(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change, in or affecting the
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole from that set forth or contemplated in the Offering Memorandum and
(ii) neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order to decree, otherwise than as set forth
or contemplated in the Offering Memorandum;
(e) Jill L. Force, Esq., Senior Vice President, General Counsel and
Corporate Secretary for the Company, shall have furnished to the Initial
Purchasers her written opinion, dated the Closing Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Offering Memorandum;
(ii) the Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(iii) each of the Company's Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Offering Memorandum, and has been duly qualified
as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require
such qualification, other than where the failure to be so qualified
and in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole; and, all of the
outstanding shares of capital stock of each Significant Subsidiary
have been duly and validly authorized and issued, are fully-paid and
non-assessable, and (except for any directors' qualifying shares and
except as otherwise set forth in the Offering Memorandum) are owned
directly or
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indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(iv) other than as set forth or contemplated in the Offering
Memorandum, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such
counsel's knowledge, threatened against or affecting the Company or
any of its subsidiaries or any of their respective properties or to
which the Company or any of its subsidiaries is or may be a party or
to which any property of the Company or its subsidiaries is or may be
the subject which, if determined adversely to the Company or any of
its subsidiaries, could individually or in the aggregate have, or
reasonably be expected to have, a material adverse effect on the
business, prospects, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) to the knowledge of such counsel, neither the Company nor any
of its subsidiaries is, or with the giving of notice or lapse of time
or both would be, in violation of or in default under, (I) its
Certificate of Incorporation or By-Laws, (II) any indenture, mortgage,
deed of trust or loan agreement or (III) any other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the
Company and its subsidiaries taken as a whole; to the knowledge of
such counsel, the issue and sale of the Securities and the execution,
delivery and performance by the Company of its obligations under the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries,
under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, any of its
subsidiaries or any of their respective properties, except for such
conflicts, breaches, defaults, liens, charges, encumbrances and
violations which individually
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<PAGE>
and in the aggregate are not material to the Company and its
subsidiaries taken as a whole;
(vi) the statements in the Offering Memorandum in the fourth,
fifth, tenth and eleventh paragraphs under "Offering Memorandum
Summary--The Company--Recent Developments" and under "Risk Factors--
Limits on Reimbursement", "--Extensive Regulation", "--Healthcare
Reform Legislation", "--Certain Legal Actions," "Business--
Governmental Regulation" and in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 under the caption
"Legal Proceedings", insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein,
fairly present such legal matters, documents or proceedings;
(vii) such counsel (A) is of the opinion that each document filed
with the Commission pursuant to the Exchange Act and incorporated by
reference in the Final Memorandum (except for the financial statements
included therein, as to which such counsel need express no opinion)
complied as to form in all material respect, when filed with the
Commission, with the Exchange Act; and (B) has no reason to believe
that (except for the financial statements, schedules and other
statistical and financial data included or incorporated by reference
therein as to which such counsel need express no belief) the Final
Memorandum as of its date of issuance or as amended or supplemented,
if applicable, as of the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and
(viii) each of the Company and its subsidiaries owns, possesses or
has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all Federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, domestic or foreign, necessary to own or lease, as
the case may be, and to operate its properties and to carry on its
business as conducted as of the date hereof, except where the failure
to own, possess or obtain any such license, permit, certificate,
consent, order, approval or other authorization would not have, or
would not reasonably be expected to have, a material adverse effect on
the Company and its subsidiaries as a whole; and, except as described
in the Offering Memorandum, neither the Company nor any such
subsidiary has received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, which revocation or
modification could have, or reasonably be expected to have, a material
adverse effect on the Company and its subsidiaries taken as a whole;
and each of the Company and its subsidiaries is in compliance
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<PAGE>
with all laws and regulations relating to the conduct of its business
as conducted as of the date of the Offering Memorandum, except where
such noncompliance would not have, or would not reasonably be expected
to have, a material adverse effect on the Company and its subsidiaries
taken as a whole.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the States of Kentucky and Delaware
and the Federal securities laws of the United States, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to Initial Purchasers' counsel) of
other counsel, reasonably acceptable to the Initial Purchasers' counsel,
familiar with the applicable laws; and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which she relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Initial Purchasers and she
are justified in relying thereon. With respect to the matters to be covered in
subparagraph (vii)(B) above, counsel may state that her belief is based upon her
participation in the preparation of the Offering Memorandum and any amendment or
supplement thereto but is without independent check or verification except as
specified.
The opinion of Jill L. Force, Esq. described above shall be rendered to the
Initial Purchasers at the request of the Company and shall so state therein.
(f) Greenebaum Doll & McDonald PLLC, counsel for the Company, shall
have furnished to the Initial Purchasers their written opinion, dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers,
to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Securities have been duly authorized, executed and
delivered by the Company and, when duly authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement,
will constitute valid and binding obligations of the Company entitled
to the benefits provided by the Indenture and enforceable in
accordance with their terms, subject to the effect of applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and equitable principles of general applicability;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding
instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the
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<PAGE>
effect of applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and equitable principles of general
applicability;
(iv) the Registration Rights Agreement has been duly authorized,
executed and delivered by, and is a valid and binding instrument of,
the Company, enforceable against the Company in accordance with its
terms, subject to the effect of applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and equitable
principles of general applicability and except as any rights to
indemnity and contribution may be limited by applicable law;
(v) no consent, approval, authorization, order, license,
registration, qualification or notice of or with any court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation of the other transactions contemplated
by this Agreement, the Registration Rights Agreement or the Indenture,
except such consents, approvals, authorizations, registrations,
qualifications or notices as may be required under (i) state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Initial Purchasers or (ii) under
the Securities Act with respect to the registration of the Exchange
Securities pursuant to the terms of the Registration Rights Agreement;
(vi) based upon the representations, warranties and agreements of
the Company in subparagraphs (l), (m) and (n) of Section 4,
subparagraphs (l), (m), (n) and (o) of Section 5 and subparagraph (a)
of Section 6 of this Agreement and of the Initial Purchasers in
Section 2 of this Agreement and on the truth and accuracy of the
representations and agreements deemed to be made by purchasers of the
Securities contained in the Final Memorandum, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers under this Agreement or in connection with the
initial resale of such Securities by the Initial Purchasers in
accordance with Section 2 of this Agreement to register the Securities
under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended; provided however that such counsel
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need not express any opinion with respect to the conditions under
which the Securities may be further resold;
(vii) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(viii) the statements in the Offering Memorandum under "Plan of
Distribution" and "Notice to Investors", insofar as such statements
constitute a summary of the legal matters or documents referred to
therein, fairly present such legal matters, documents or proceedings;
18
<PAGE>
(ix) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Final Memorandum, will not be an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended;
and
(x) such counsel has no reason to believe that (except for the
financial statements, schedules and other statistical and financial
data included or incorporated by reference therein as to which such
counsel need express no belief) the Final Memorandum as of its date of
issuance or as amended or supplemented, if applicable, as of the
Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the States of Kentucky and Delaware
and the Federal securities law of the United States, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to Initial Purchasers' counsel) of
other counsel, reasonably acceptable to the Initial Purchasers' counsel,
familiar with the applicable laws; and (B) as to matters of fact, to the extent
such counsel deems proper, on certificates of responsible officers of the
Company. The opinion of such counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Initial Purchasers and they
are justified in relying thereon. With respect to the matters to be covered in
subparagraph (x) above, counsel may state that their opinion and belief is based
upon their participation in the preparation of the Offering Memorandum and any
amendment or supplement thereto but is without independent check or verification
except as specified.
The opinion of Greenebaum Doll & McDonald PLLC described above shall be
rendered to the Initial Purchasers at the request of the Company and shall so
state therein.
(g) Ogden Newell & Welch, counsel for the Company, shall have
furnished to the Initial Purchasers their written opinion, dated the
Closing Date, in form and substance satisfactory to the Initial Purchasers,
to the effect that:
(i) the statements in the Offering Memorandum under "Description
of the Credit Agreement"and "Description of Notes", insofar as such
statements constitute a summary of the legal matters or documents
referred to therein, fairly present such legal matters or documents;
and
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<PAGE>
(ii) the issue and sale of the Securities and the execution,
delivery and performance by the Company of its obligations under the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, the Credit
Agreement dated as of March 17, 1997, as amended as of March 31, 1997,
and as further amended as of April 22, 1997, May 30, 1997 and June 24,
1997, by and among the Company and Morgan Guaranty Trust Company of
New York, as Documentation Agent and Collateral Agent, Nationsbank
N.A., as Administrative Agent, and the other banks that are parties
thereto, including any related notes, collateral documents,
instruments and agreements in connection therewith.
The opinion of Ogden Newell & Welch described above shall be rendered to
the Initial Purchasers at the request of the Company and shall so state therein.
(h) on the date of the issuance of the Offering Memorandum and also on
the Closing Date, Ernst & Young LLP and Price Waterhouse LLP shall have
furnished to the Initial Purchasers letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, containing
statements and information of the type customarily included in accountants
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Offering Memorandum;
(i) the Initial Purchasers shall have received on and as of the
Closing Date an opinion of Davis Polk & Wardwell, counsel to the Initial
Purchasers, in form and substance satisfactory to you; and
(j) on or prior to the Closing Date the Company shall have furnished
to the Initial Purchasers such further certificates and documents as you
shall reasonably request.
7. The Company agrees to indemnify and hold harmless each Initial
Purchaser, each person, if any, who controls any Initial Purchaser and each
affiliate of any Initial Purchaser which assists such Initial Purchaser in the
distribution of the Securities within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including without limitation the legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any breach or alleged breach of any
of the representations and warranties contained in Section 4, breach or alleged
breach of any of the covenants contained in Section 5 or any untrue statement or
alleged untrue statement of a material fact contained in the Offering Memorandum
(and any amendment or supplement thereto if the Company shall have furnished any
amendments or supplements thereto) or the Preliminary Memorandum, or caused by
any
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omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser
expressly for use therein.
Each Initial Purchaser agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers and each person who
controls the Company within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Initial Purchaser, but only with reference to
information relating to such Initial Purchaser furnished to the Company in
writing by such Initial Purchaser expressly for use in the Offering Memorandum
or any amendment or supplement thereto.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
reasonable fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person
shall have mutually agreed to the contrary, (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Initial
Purchasers, each affiliate of any Initial Purchaser which assists such Initial
Purchaser in the distribution of the Securities and such control persons of
Initial Purchasers shall be designated in writing by J.P. Morgan Securities Inc.
and any such separate firm for the Company, its directors, its officers and such
control persons of the Company shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss
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<PAGE>
or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Initial Purchasers on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
shall be deemed to be in the same respective proportions as the net proceeds
from the offering (before deducting expenses) received by the Company and the
total discounts and commissions received by the Initial Purchasers, in each case
as set forth in the table on the cover of the Offering Memorandum, bear to the
aggregate offering price of the Securities. The relative fault of the Company
on the one hand and the Initial Purchasers on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
--- ----
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
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claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Initial
Purchaser be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased by it were offered exceeds the
amount of any damages that such Initial Purchaser has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section ll(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of the Securities set forth
opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Initial Purchaser or any person controlling any Initial Purchaser or by or
on behalf of the Company, its officers or directors or any other person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchasers, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange or the National Association of Securities
Dealers, Inc., (ii) trading of any securities of or guaranteed by the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State authorities, or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Initial Purchasers, is material and adverse and which, in the judgment of
the Initial Purchasers, makes it impracticable to market the Securities on the
terms and in the manner contemplated in the Offering Memorandum.
9. This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
23
<PAGE>
If, on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase is not more than one-tenth of the aggregate principal amount
of the Securities to be purchased on such date, the other Initial Purchasers
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Initial Purchasers, or in such other proportions as the
Initial Purchasers may specify, to purchase the Securities which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
on such date; provided that in no event shall the principal amount of Securities
--------
that any Initial Purchaser has agreed to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by an amount in excess of one-tenth of such
principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any non-
defaulting Initial Purchaser or the Company. In any such case either the
Initial Purchasers or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Offering Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
10. If this Agreement shall be terminated by the Initial Purchasers, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement or any condition of the Initial Purchasers' obligations cannot be
fulfilled, the Company agrees to reimburse the Initial Purchasers or such
Initial Purchasers as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
expenses of their counsel) reasonably incurred by such Initial Purchasers in
connection with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Initial Purchasers, each affiliate of any Initial Purchaser which
assists such Initial Purchaser in the distribution of the Securities, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No Initial
24
<PAGE>
Purchaser of Securities from any Initial Purchaser shall be deemed to be a
successor by reason merely of such purchase.
12. Any action by the Initial Purchasers hereunder or under the
Registration Rights Agreement may be taken by the Initial Purchasers jointly or
by J.P. Morgan Securities Inc. alone on behalf of the Initial Purchasers, and
any such action taken by the Initial Purchasers jointly or by J.P. Morgan
Securities Inc. alone shall be binding upon the Initial Purchasers. All notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Initial Purchasers shall be given to the
Initial Purchasers c/o J.P. Morgan Securities Inc., 60 Wall Street, New York,
New York 10260 (telefax: (212) 648-5410; Attention: Syndicate Department.
Notices to the Company shall be given to it at Vencor, Inc., 3300 Providian
Center, 400 West Market Street, Louisville, Kentucky 40202 (fax: 502-596-4075);
Attention: Jill L. Force, Esq., Senior Vice President, General Counsel and
Secretary.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
25
<PAGE>
If the foregoing is in accordance with your understanding, please sign
below.
Very truly yours,
VENCOR, INC.
By:
---------------------------------------
Title:
Accepted: July 16, 1997
J.P. MORGAN SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: J.P. Morgan Securities Inc.
By:
--------------------------------
Title:
26
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount of
Securities To Be
Initial Purchaser Purchased
- ----------------- -------------------
<S> <C>
J.P. Morgan Securities Inc............................ $425,000,000
NationsBanc Capital Markets, Inc...................... 125,000,000
Goldman, Sachs & Co................................... 100,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.... 100,000,000
------------
Total:...................................... $750,000,000
============
</TABLE>
27
<PAGE>
EXHIBIT 4.2
================================================================================
VENCOR, INC.
AND
THE BANK OF NEW YORK, Trustee
Indenture
Dated as of July 21, 1997
----------
$750,000,000
8 5/8% Senior Subordinated Notes Due 2007
================================================================================
<PAGE>
TABLE OF CONTENTS
---------------
Page
----
ARTICLE 1
---------
Definitions
-----------
Section 1.01. Certain Terms Defined....................................... 13
Section 1.02. Other Definitions........................................... 32
ARTICLE 2
---------
Issue, Execution, Form and Registration of Securities
-----------------------------------------------------
Section 2.01. Authentication and Delivery of Securities................... 33
Section 2.02. Execution of Securities..................................... 33
Section 2.03. Certificate of Authentication............................... 33
Section 2.04. Form, Denomination and Date of Securities; Payments of
Interest................................................... 34
Section 2.05. Restrictive Legends......................................... 35
Section 2.06. Registration, Transfer and Exchange......................... 37
Section 2.07. Book-Entry Provisions for Global Securities................. 38
Section 2.08. Special Transfer Provisions................................. 40
Section 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities... 44
Section 2.10. Cancellation of Securities.................................. 45
Section 2.11. Temporary Securities........................................ 45
Section 2.12. CUSIP and CINS Numbers...................................... 46
ARTICLE 3
---------
Covenants of the Company and the Trustee.
-----------------------------------------
Section 3.01. Payment of Principal and Interest........................... 46
Section 3.02. Offices for Payments, etc................................... 46
Section 3.03. Appointment to Fill a Vacancy in Office of Trustee.......... 47
Section 3.04. Paying Agents............................................... 47
Section 3.05. Certificates to Trustee..................................... 48
Section 3.06. Securityholders' Lists...................................... 48
Section 3.07. Reports by the Trustee...................................... 48
Section 3.08. Limitation on Restricted Payments........................... 49
Section 3.09. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock......................................... 51
Section 3.10. Disposition of Proceeds of Asset Sales...................... 53
<PAGE>
Page
----
Section 3.11. Limitation on Liens......................................... 57
Section 3.12. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.......................... 57
Section 3.13. Limitation on Line of Business.............................. 58
Section 3.14. Limitation on Senior Subordinated Debt...................... 58
Section 3.15. Limitation on Transactions with Affiliates.................. 59
Section 3.16. Limitation on Issuance of Guarantees of Indebtedness by
Restricted Subsidiaries.................................... 59
Section 3.17. Change of Control........................................... 60
Section 3.18. Termination of Certain Covenants if Securities Rated
Investment Grade........................................... 63
Section 3.19. Reports..................................................... 63
Section 3.20. Waiver of Stay, Extension or Usury Laws..................... 64
ARTICLE 4
---------
Remedies of the Trustee and Holders on Event of Default
-------------------------------------------------------
Section 4.01. Events of Default........................................... 64
Section 4.02. Acceleration................................................ 66
Section 4.03. Other Remedies.............................................. 67
Section 4.04. Waiver of Past Defaults..................................... 67
Section 4.05. Control by Majority......................................... 67
Section 4.06. Limitation on Suits......................................... 68
Section 4.07. Rights of Holders to Receive Payment........................ 68
Section 4.08. Collection Suit by Trustee.................................. 68
Section 4.09. Trustee May File Proofs of Claim............................ 69
Section 4.10. Priorities.................................................. 69
Section 4.11. Undertaking for Costs....................................... 70
ARTICLE 5
---------
Concerning the Trustee
----------------------
Section 5.01. Duties and Responsibilities of the Trustee; During Default;
Prior to Default........................................... 70
Section 5.02. Certain Rights of the Trustee............................... 71
Section 5.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof.............. 73
Section 5.04. Trustee and Agents May Hold Securities; Collections, etc.... 73
Section 5.05. Moneys Held by Trustee...................................... 73
Section 5.06. Notice of Default........................................... 73
ii
<PAGE>
Page
----
Section 5.07. Compensation and Indemnification of Trustee and Its
Prior Claim................................................ 74
Section 5.08. Right of Trustee to Rely on Officers' Certificate, etc...... 74
Section 5.09. Persons Eligible for Appointment as Trustee................. 75
Section 5.10. Resignation and Removal; Appointment of Successor
Trustee.................................................... 75
Section 5.11. Acceptance of Appointment by Successor Trustee.............. 76
Section 5.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee........................................ 77
Section 5.13. Preferential Collection of Claims........................... 78
ARTICLE 6
---------
Concerning the Holders
----------------------
Section 6.01. Evidence of Action Taken by Holders......................... 78
Section 6.02. Proof of Execution of Instruments and of Holding of
Securities; Record Date.................................... 78
Section 6.03. Securities Owned by Company Deemed Not Outstanding.......... 79
Section 6.04. Right of Revocation of Action Taken......................... 79
ARTICLE 7
---------
Supplemental Indentures
-----------------------
Section 7.01. Supplemental Indentures Without Consent of Holders.......... 80
Section 7.02. With Consent of Holders..................................... 81
Section 7.03. Effect of Supplemental Indenture............................ 82
Section 7.04. Documents to Be Given to Trustee; Compliance with TIA....... 82
Section 7.05. Notation on Securities in Respect of Supplemental
Indentures................................................. 83
ARTICLE 8
---------
Consolidation, Merger or Sale of Assets
---------------------------------------
Section 8.01. When Issuer May Merge, Etc.................................. 83
Section 8.02. Successor Corporation Substituted........................... 84
Section 8.03. Opinion of Counsel to Trustee............................... 84
iii
<PAGE>
Page
----
ARTICLE 9
---------
Subordination
-------------
Section 9.01. Agreement to Subordinate.................................... 84
Section 9.02. Liquidation; Dissolution; Bankruptcy........................ 84
Section 9.03. Default on Designated Senior Debt........................... 86
Section 9.04. When Distributions Must Be Paid Over........................ 86
Section 9.05. Notice...................................................... 87
Section 9.06. Subrogation................................................. 87
Section 9.07. Relative Rights............................................. 87
Section 9.08. The Company and Holders May Not Impair Subordination........ 88
Section 9.09. Distribution or Notice to Representative.................... 89
Section 9.10. Rights of Trustee and Paying Agent.......................... 89
Section 9.11. Authorization to Effect Subordination....................... 89
Section 9.12. Payment..................................................... 90
ARTICLE 10
----------
Redemption of Securities
------------------------
Section 10.01. Right of Optional Redemption; Prices........................ 90
Section 10.02. Notice of Redemption; Partial Redemptions................... 90
Section 10.03. Payment of Securities Called for Redemption................. 91
Section 10.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption................................... 92
ARTICLE 11
----------
Defeasance and Covenant Defeasance
----------------------------------
Section 11.01. Company's Option to Effect Defeasance or Covenant
Defeasance................................................. 93
Section 11.02. Legal Defeasance and Discharge.............................. 93
Section 11.03. Covenant Defeasance......................................... 93
Section 11.04. Conditions to Legal or Covenant Defeasance.................. 94
Section 11.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions................... 96
Section 11.06. Repayment to Company........................................ 96
Section 11.07. Reinstatement............................................... 97
iv
<PAGE>
Page
----
ARTICLE 12
----------
Miscellaneous Provisions
------------------------
Section 12.01. Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability.................. 97
Section 12.02. Provisions of Indenture for the Sole Benefit of Parties and
Holders................................................... 97
Section 12.03. Successors and Assigns of Company Bound by Indenture....... 98
Section 12.04. Notices and Demands on Company, Trustee and Holders........ 98
Section 12.05. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein........................ 99
Section 12.06. Payments Due on Saturdays, Sundays and Holidays............ 100
Section 12.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939..................................... 100
Section 12.08. New York Law to Govern..................................... 100
Section 12.09. Third Party Beneficiaries.................................. 100
Section 12.10. Counterparts............................................... 100
Section 12.11. Effect of Headings......................................... 100
v
<PAGE>
EXHIBIT A. Form of Certificate to be Delivered in
Connection with Transfers Pursuant to
Regulation S.............................................. A-1
<PAGE>
THIS INDENTURE, dated as of July 21, 1997 between Vencor, Inc., a Delaware
corporation (the "COMPANY"), and The Bank of New York (the "TRUSTEE"),
W I T N E S S E T H :
WHEREAS, the Company has duly authorized the issue of its 8 5/8% Senior
Subordinated Notes Due 2007 (the "SECURITIES") and, to provide, among other
things, for the authentication, delivery and administration thereof, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Securities and the Trustee's certificate of authentication
shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
No. $
[CUSIP][CINS]
Vencor, Inc.
8 5/8% Senior Subordinated Note Due 2007
Vencor, Inc., a Delaware corporation (the "COMPANY"), for value received
hereby promises to pay to or registered assigns the principal
sum of Dollars at the Company's office or agency for said
purpose in the City of New York, on July 15, 2007, in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay interest, semi-annually on
January 15 and July 15 (each an "INTEREST PAYMENT DATE") of each year,
commencing with January 15, 1998, on said principal sum in like coin or currency
at the rate per annum set forth above at said office or agency from the most
recent Interest Payment Date to which interest on the Securities has been paid
or duly provided for, unless the date hereof is a date to which interest on the
Securities has been paid or duly provided for, in which case from the date of
this Security, or, if no interest on the Securities [or on the Securities for
which these Securities were exchanged pursuant to the Exchange Offer]/1/ has
been paid or duly provided for, from July 21, 1997. Notwithstanding the
foregoing, if the date hereof is after January 1 or July 1 (each an "INTEREST
RECORD DATE"), as the case may be, and before the immediately following Interest
Payment Date, this Security shall bear interest from such Interest Payment Date;
provided, that if the Company shall default in the payment of interest due on
such Interest Payment Date then this
- --------------------
/1/ To be included in Exchange Securities.
<PAGE>
Security shall bear interest from the next preceding Interest Payment Date to
which interest on the Securities has been paid or duly provided for. The
interest so payable on any Interest Payment Date will, except as otherwise
provided in the Indenture referred to on the reverse hereof, be paid to the
person in whose name this Security is registered at the close of business on the
Interest Record Date preceding such Interest Payment Date whether or not such
day is a business day; provided that interest may be paid, at the option of the
Company, by mailing a check therefor payable to the registered holder entitled
thereto at such holder's last address as it appears on the Security register or
by wire transfer, in immediately available funds, to such bank or other entity
in the continental United States as shall be designated in writing by such
holder prior to the relevant Interest Record Date and shall have appropriate
facilities for such purpose.
Interest, other than default interest, on the Securities will be computed
on the basis of a 360-day year consisting of twelve 30-day months.
Reference is made to the further provisions set forth on the reverse
hereof. Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Security shall not be valid or obligatory until the certificate of
authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
VENCOR, INC.
By:
--------------------------------------------
Name:
Title:
3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Vencor, Inc.
8 5/8% Senior Subordinated Note Due 2007
This Security is one of a duly authorized issue of debt securities of the
Company, limited to the aggregate principal amount of $750,000,000 (except as
otherwise provided in the Indenture mentioned below), issued or to be issued
pursuant to an indenture dated as of July 21, 1997 (the "INDENTURE"), duly
executed and delivered by the Company to The Bank of New York, as Trustee
(herein called the "TRUSTEE"). Reference is hereby made to the Indenture and all
indentures supplemental thereto for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders (the words "HOLDERS" or "HOLDER" meaning the registered
holders or registered holder) of the Securities.
This Security will bear interest until final maturity at a rate per annum
shown above, except as provided in the next paragraph. The Company will pay
interest on overdue principal of, premium, if any, and to the extent lawful,
interest on overdue installments of interest, at an 8__% rate per annum based on
a year of 360 days and actual days elapsed.
[In the event that (i) the Exchange Offer Registration Statement (as
defined in the Indenture) relating to the Exchange Offer (as defined in the
Indenture) is not filed with the Commission (as defined in the Indenture) on or
prior to the date that is 60 days after the Closing Date (as defined in the
Indenture), (ii) the Exchange Offer Registration Statement is not declared
effective on or prior to the date that is 120 days after the Closing Date, or
(iii) the Exchange Offer is not consummated or a Shelf Registration Statement
(as defined in the Indenture) with respect to resale of this Security is not
declared effective on or prior to the date that is 150 days after the Closing
Date (each such event referred to in clauses (i) through (iii), a "Registration
Default"), then the Company will pay additional interest (in addition to the
interest otherwise due hereon) ("ADDITIONAL INTEREST") to the holder during the
first 90-day period immediately following the occurrence of each such
Registration Default in an amount equal to 0.25% per annum. The amount of
interest will increase by an additional 0.25% per annum for each subsequent 90-
day period until such Registration Default is cured, up to a maximum amount of
additional interest of 1.00% per annum. Such additional interest will cease
accruing with respect to any Registration Default when such Registration Default
has been cured. The Company shall pay amounts due in respect of Additional
Interest on each Interest Payment Date (or, if the Company shall default in the
payment of interest on any Interest Payment Date, on the date such interest is
otherwise paid as provided in the Indenture).]/2/
- --------------------
/2/ To be included in Securities not Exchange Securities.
4
<PAGE>
[There shall also be payable in respect of this Security all Additional
Interest that may have accrued on the Security for which this Security was
exchanged (as defined in such Security) pursuant to the Exchange Offer, such
Additional Interest to be calculated in accordance with the terms of such
Security and payable at the same time and in the same manner as periodic
interest on this Security.]/3/
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be declared
due and payable, in the manner and with the effect, and subject to the
conditions, provided in the Indenture. The Indenture provides that in certain
events such declaration and its consequences may be waived by the holders of a
majority in aggregate principal amount of the Securities then outstanding and
that, prior to any such declaration, such holders may waive any past default
under the Indenture and its consequences except a default in the payment of
principal of, premium, if any, or interest on any of the Securities. Any such
consent or waiver by the holder of this Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Security and any Security which may be issued
in exchange or substitution herefor, whether or not any notation thereof is made
upon this Security or such other Securities.
The Indenture permits the Company and the Trustee, with the consent of the
holders of at least a majority in aggregate principal amount of the Securities
at the time outstanding, evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Securities; provided that without the consent of each holder affected, no such
supplemental indenture shall (i) reduce the principal amount of Securities whose
holders must consent to an amendment, supplement or waiver, (ii) reduce the
principal of or change the fixed maturity of any Security or alter the
provisions with respect to the redemption of the Securities (other than
provisions relating to the covenants described in Sections 3.10 and 3.17 in the
Indenture), (iii) reduce the rate of or change the time for payment of interest
on any Security, (iv) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest on, the Securities (except a
rescission of acceleration of the Securities by the holders of at least a
majority in aggregate principal amount
- --------------------
/3/ To be included in Exchange Securities.
5
<PAGE>
thereof and a waiver of the payment default that resulted from such
acceleration), (v) make any Security payable in money other than that stated in
the Securities, (vi) make any change in the provisions of the Indenture relating
to waivers of past Defaults or the rights of holders of Securities to receive
payments of principal of, premium, if any, or interest on the Securities, (vii)
waive a redemption payment with respect to any Security (other than a payment
required by one of the covenants described in Sections 3.10 and 3.17 in the
Indenture), (viii) modify the ranking or priority of the Securities or modify
the definition of Senior Debt or Designated Senior Debt or amend or modify the
subordination provisions of the Indenture in any manner adverse to the holders
or (ix) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any holder of
Securities, the Company and the Trustee may amend or supplement the Indenture or
the Securities to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated Securities,
to provide for the assumption of the Company's obligations to holders of
Securities in the case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the holders of Securities or
that does not adversely affect the legal rights under the Indenture of any such
holder, or to comply with requirements of the Commission (as defined in the
Indenture) in order to effect or maintain the qualification of the Indenture
under the Trust Indenture Act (as defined in the Indenture).
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without coupons
in denominations of $1,000 and any multiple of $1,000.
At the office or agency of the Company referred to on the face hereof and
in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of Securities
of other authorized denominations.
Upon due presentment for registration of transfer of this Security at the
above-mentioned office or agency of the Company, a new Security or Securities of
authorized denominations, for a like aggregate principal amount, will be issued
to the transferee as provided in the Indenture. No service charge shall be made
for any such transfer, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto.
6
<PAGE>
The Securities may be redeemed at the option of the Company as a whole, or
from time to time in part, on any date on or after July 15, 2002, upon mailing a
notice of such redemption not less than 30 nor more than 60 days prior to the
date fixed for redemption to the holders of Securities to be redeemed, all as
provided in the Indenture, at the following redemption prices (expressed in
percentages of the principal amount) together in each case with accrued interest
to the date fixed for redemption:
If redeemed during the twelve-month period beginning July 15,
Year Percentage
2002................................... 104.3125%
2003................................... 102.8750%
2004................................... 101.4375%
2005 and thereafter.................... 100.0000%
provided that if the date fixed for redemption is an Interest Payment Date, then
the interest payable on such date shall be paid to the holder of record on the
next preceding Interest Record Date.
Subject to payment by the Company of a sum sufficient to pay the amount due
on redemption, interest on this Security (or portion hereof if this Security is
redeemed in part) shall cease to accrue upon the date duly fixed for redemption
of this Security (or portion hereof if this Security is redeemed in part).
Upon a Change of Control (as defined in the Indenture), any holder of
Securities will have the right to cause the Company to purchase the Securities
of such holder, in whole or in part in integral multiples of aggregate principal
amount of $1,000, at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to any Change of
Control Payment Date, as provided in, and subject to the terms of the Indenture.
All amounts owed under and in respect of this Security are subordinated in
right of payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash of all amounts owed under and in
respect of all Senior Debt of the Company, and the subordination of the
Securities is for the benefit of all holders of all Senior Debt of the Company,
whether outstanding on the Closing Date or incurred thereafter. The Company
agrees, and each holder by accepting a Security agrees, to the subordination.
7
<PAGE>
The Company, the Trustee, and any authorized agent of the Company or the
Trustee, may deem and treat the registered holder hereof as the absolute owner
of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or the Trustee or any authorized agent of the Company or
the Trustee), for the purpose of receiving payment of, or on account of, the
principal hereof and premium, if any, and, subject to the provisions on the face
hereof, interest hereon and for all other purposes, and neither the Company nor
the Trustee nor any authorized agent of the Company or the Trustee shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Security, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
The Indenture is hereby incorporated by the reference and to the extent of
any variance between the provisions hereof and the Indenture, the Indenture
shall control.
This Security shall be deemed to be a contract under the laws of the State
of New York, and for all purposes shall be construed in accordance with the laws
of said State, except as may otherwise be required by mandatory provisions of
law.
8
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated: _______________________
This is one of the Securities described in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:___________________________________
Authorized Signatory
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
Insert Taxpayer Identification No.
- --------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing attorney to transfer said Security on the
--------------------
books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES,
PERMANENT OFFSHORE GLOBAL SECURITIES AND
OFFSHORE PHYSICAL SECURITIES]
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of an effective Registration or (ii)
two years after the later of the original issuance of this Security or the last
date on which this Security was held by the Company or an Affiliate of the
Company, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
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[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Security in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer or
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date: ___________ ________________________________________________
NOTICE: The signature to this assignment
must correspond with the name as
written upon the face of the within-
mentioned instrument in every
particular, without alteration or
any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "QUALIFIED
INSTITUTIONAL BUYER" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ___________ _________________________________________________
NOTICE: To be executed by an executive officer
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 3.10 or Section 3.17 of the Indenture, check the Box:__
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 3.10 or Section 3.17 of the Indenture, state the amount:
maturity): $_______________.
Date: _______________
Your Signature:
____________________________________________
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:
_______________________________________
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AND WHEREAS, all things necessary to make the Securities, when executed by
the Company and authenticated and delivered by the Trustee as in the Indenture
provided, the valid, binding and legal obligations of the Company, and to
constitute these presents a valid indenture and agreement according to its
terms, have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by the
Holders thereof, the Company and the Trustee mutually covenant and agree for the
equal and proportionate benefit of the respective Holders from time to time of
the Securities as follows:
ARTICLE 1
Definitions
Section 1.01. Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture which are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939 (except as herein otherwise expressly provided or
unless the context otherwise clearly requires), shall have the meanings assigned
to such terms in said Trust Indenture Act and in said Securities Act as in force
at the date of this Indenture. All accounting terms used herein and not
expressly defined shall have the meanings given to them in accordance with GAAP
(whether or not such is indicated herein). The words "HEREIN", "HEREOF" and
"HEREUNDER" and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision. The terms
defined in this Article include the plural as well as the singular.
"ACQUIRED DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
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"ACQUIRED SUBSIDIARY DEBT" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
except to the extent such Indebtedness was incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person, except to the
extent such Lien was created or incurred in connection with, or in contemplation
of, such acquisition.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "CONTROL"
(including, with correlative meanings, the terms "CONTROLLING," "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"AFFILIATE AGREEMENTS" means the agreements listed in Schedule III to the
Credit Agreement on the date of the Indenture.
"AFFILIATE TRANSACTION" has the meaning provided in Section 3.15.
"AGENT MEMBERS" has the meaning provided in Section 2.07(a).
"ASSET SALE" means (i) the sale, lease, conveyance or other disposition of
any assets (including, without limitation, by way of a sale and leaseback);
provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole will be governed by Section 3.17 and/or Article 8 and not by
the provisions of Section 3.10, and (ii) the issuance or sale by the Company or
any of its Restricted Subsidiaries of Equity Interests of any of the Company's
Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $15 million or (b) for net proceeds in excess of $15
million. Notwithstanding the foregoing: (a) a transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary, (b) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary, (c) a
Remaining Lenox Sale, (d) a Healthcare Facility Swap, (e) sales of assets of
Behavioral Healthcare Corp. and (f) sales of assets comprising the occupational
health business of TheraTx, Incorporated will not be deemed to be an Asset Sale.
14
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"ASSET SALE OFFER PRICE" has the meaning provided in Section 3.10.
"ATRIA" means Atria Communities, Inc., a Delaware corporation, and its
successors.
"BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person, or any authorized committee of the Board of Directors
of such Person.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means, at any time, (i) any evidence of Indebtedness
with a maturity of 180 days or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof), (ii) repurchase obligations for investments of the
type described in clause (i) for which delivery of the investment is made
against payment, (iii) demand or time deposits, bankers' acceptances and
certificates of deposit or acceptances with a maturity of 180 days or less of
any financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than
$300,000,000, and (iv) commercial paper with a maturity of 180 days or less
issued by a corporation (except any Affiliate of the Company or Subsidiary of
the Company) organized under the laws of any state of the United States or the
District of Columbia and rated at least A-1 by Standard & Poor's Corporation and
at least P-1 by Moody's Investors Service, Inc.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition, in one or a series of
related transactions, of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole to any Person or group (as such
term is used in
15
<PAGE>
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than to a Person or
group who, prior to such transaction, held a majority of the voting power of the
voting stock of the Company, (ii) the acquisition by any Person or group (as
defined above) of a direct or indirect interest in more than 50% of the voting
power of the voting stock of the Company, by way of merger or consolidation or
otherwise, or (iii) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"CLOSING DATE" means July 21, 1997.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act.
"CONSOLIDATED EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (i) an amount equal
to any extraordinary loss plus any net loss realized in connection with an Asset
Sale (to the extent such losses were deducted in computing such Consolidated Net
Income), plus (ii) any non-cash charges (to the extent such charges were
deducted in computing such Consolidated Net Income), except for any non-cash
charges that represent accruals of, or reserves for, cash disbursements to be
made in any future accounting period, plus (iii) provision for taxes based on
income or profits of such Person and its Restricted Subsidiaries for such
period, to the extent such provision for taxes was included in computing such
Consolidated Net Income, plus (iv) the Fixed Charges of such Person and its
Restricted Subsidiaries for such period, to the extent that such Fixed Charges
were deducted in computing such Consolidated Net Income, plus (v) depreciation
and amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation and amortization were deducted in computing such
Consolidated Net Income, in each case, on a consolidated basis and determined in
accordance with GAAP. Notwithstanding the foregoing, the amounts referred to in
clauses (i) through (v) above as they relate to a Restricted Subsidiary of the
referent Person shall be added to Consolidated Net Income to compute
Consolidated EBITDA only to the extent (and in same proportion) that the Net
Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to the Company by
such Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
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<PAGE>
"CONSOLIDATED NET INCOME" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent Person or a Restricted Subsidiary thereof, (ii) the Net
Income of any Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, (iii)
solely for the purpose of calculating the amount of Restricted Payments that may
be made pursuant to clause (c) of Section 3.08, the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (iv) the cumulative effect of a change
in accounting principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock), less
all write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made in accordance
with GAAP as a result of the acquisition of such business) subsequent to the
date of the Indenture in the book value of any asset owned by such Person or a
consolidated Restricted Subsidiary of such Person, and excluding the cumulative
effect of a change in accounting principles, all as determined in accordance
with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 101 Barclay Street, Floor 21 West, New York, New
York 10286.
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"CREDIT AGREEMENT" means that certain Credit Agreement, dated as of March
17, 1997, as amended as of March 31, 1997, and as further amended as of April
22, 1997 and as of May 30, 1997, by and among the Company and Morgan Guaranty
Trust Company of New York, as Documentation Agent and Collateral Agent,
Nationsbank N.A., as Administrative Agent and the other banks that are parties
thereto, including any related notes, collateral documents, instruments and
agreements executed in connection therewith, and in each case as further
amended, modified, extended, renewed, refunded, replaced or refinanced, in whole
or in part, from time to time.
"DEFAULT" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"DEPOSITARY" means The Depository Trust Company, its nominees, and their
respective successors.
"DESIGNATED SENIOR DEBT" means (i) so long as the Credit Agreement is
outstanding, the Credit Agreement and (ii) thereafter, any other Senior Debt
permitted under the Indenture the principal amount of which is $75 million or
more and that has been designated by the Company as "Designated Senior Debt".
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Securities mature.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" means any event or condition specified as such in
Section 4.01 which shall have continued for the period of time, if any, therein
designated.
"EXCESS PROCEEDS" has the meaning provided in Section 3.10.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" means the exchange offer by the Company of Exchange
Securities for Securities pursuant to the Registration Rights Agreement.
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"EXCHANGE OFFER REGISTRATION STATEMENT" means a registration statement
relating to an Exchange Offer on an appropriate form and all amendments and
supplements to such registration statement, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"EXCHANGE SECURITIES" means any securities of the Company to be offered to
Securityholders in exchange for Securities pursuant to the Exchange Offer or
otherwise pursuant to a Registration of Securities containing terms identical to
the Securities for which they are exchanged (except that (i) interest thereon
shall accrue from the last date on which interest was paid on the Securities or,
if no such interest has been paid, from the date of issuance of the Securities
and (ii) the Exchange Securities will contain the alternative third paragraph
appearing on the reverse of the Securities in the form recited above and will
not contain terms with respect to transfer restrictions).
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of the Indenture, until such amounts are repaid, including
all reimbursement obligations with respect to letters of credit outstanding as
of the date of the Indenture (other than letters of credit issued pursuant to
the Credit Agreement).
"FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for any
period, the ratio of the Consolidated EBITDA of such Person for such period to
the Fixed Charges of such Person for such period. In the event that the Company
or any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the four-quarter reference period for which
the Fixed Charge Coverage Ratio is being calculated but on or prior to the date
on which the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guarantee or
redemption of Indebtedness, or such issuance or redemption of preferred stock,
as if the same had occurred at the beginning of the applicable four-quarter
reference period. In addition, for purposes of making the computation referred
to above, (i) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date shall be deemed to have occurred on the first day of the four quarter
reference period, and (ii) the Consolidated EBITDA and Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded.
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"FIXED CHARGES" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letters
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period,
and (iii) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon) and (iv) the product of (a) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) on any series of preferred stock of such Person,
times (b) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined Federal, state and local statutory tax
rate of such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entities as have been approved by a significant segment of the accounting
profession, as in effect from time to time.
"GLOBAL SECURITIES" has the meaning provided in Section 2.04.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"HEALTHCARE FACILITY" means (i) a hospital, outpatient clinic, nursing
center, assisted or independent living community, long-term care facility or any
other facility that is used or useful in the provision of healthcare or
custodial care services, (ii) any healthcare business affiliated or associated
with a Healthcare Facility or (iii) any
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business related or ancillary to the provision of healthcare services or the
operation of a Healthcare Facility, including, but not limited to, contract
therapy services such as rehabilitation, respiratory, speech and occupational
therapy services, as well as hospice and home care services.
"HEALTHCARE FACILITY SWAP" means an exchange of assets by the Company or a
Restricted Subsidiary of the Company for one or more Healthcare Facilities or
for the Capital Stock of any Person owning one or more Healthcare Facilities.
"HEDGING OBLIGATIONS" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) foreign exchange contracts
or currency swap agreements and (iii) other agreements or arrangements designed
to protect such Person against fluctuations in interest rates or currency
values.
"HOLDER", "HOLDER OF SECURITIES", "SECURITYHOLDER" or other similar terms
means the registered holder of any Security.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments (other than Residential Deposit
Bonds) or letters of credit (or reimbursement agreements in respect thereof) or
banker's acceptances or representing Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any property or representing any
Hedging Obligations, except any such balance that constitutes an accrued expense
or trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of any
other Person.
"INDENTURE" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or supplemented.
"INSOLVENCY OR LIQUIDATION PROCEEDING" means, with respect to any Person,
(i) any insolvency or bankruptcy or similar case or proceeding, or any
reorganization, receivership, liquidation, dissolution or winding up of such
Person, whether voluntary or involuntary, or (ii) any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of such Person.
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"INTEREST PAYMENT DATE" means each semiannual interest payment date on
January 15 and July 15 of each year, commencing July 15, 1998.
"INTEREST RECORD DATE" for the Interest payable on any Interest Payment
Date (except a date for payment of defaulted interest) means the January 1 or
July 1 (whether or not a Business Day) as the case may be, next preceding such
Interest Payment Date.
"INVESTMENT GRADE RATED" means, with respect to the Securities, both a
rating of the Securities by S&P of BBB- or higher and a rating of the Securities
by Moody's of Baa3 or higher.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions, purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. For purposes of the definition of
"Unrestricted Subsidiary" and Section 3.08, (i) "Investment" shall include the
fair market value of the assets (net of liabilities) of any Restricted
Subsidiary at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary and shall exclude the fair market value of the assets
(net of liabilities) of any Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary and (ii) any
property transferred to or from any Person shall be valued at its fair market
value at the time of such transfer, in each case as determined in good faith by
the Board of Directors of the Company.
"ISSUE DATE" means the original issue date of the Securities.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"MOODY'S" means Moody's Investors Services, Inc. and its successors.
"NET INCOME" means, with respect to any Person for such period, the net
income (loss) of such Person for such period, determined in accordance with GAAP
22
<PAGE>
and before any reduction in respect of preferred stock dividends, excluding,
however, (i) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with (a) any Asset
Sale (including, without limitation, dispositions pursuant to sale and leaseback
transactions) or (b) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries and (ii) any extraordinary or
nonrecurring gain (but not loss), together with any related provision for taxes
on such extraordinary or nonrecurring gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees' and sales commissions) and any other
expenses incurred or to be incurred by the Company or a Restricted Subsidiary as
a direct result of the sale of such assets (including, without limitation,
severance, relocation, lease termination and other similar expenses), taxes
actually paid or payable as a result thereof, payments made to retire
Indebtedness where payment of such Indebtedness is required in connection with
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"NON-RECOURSE DEBT" means Indebtedness of a Subsidiary (i) as to which
neither the Company nor any of its Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness of the Company or any of its Restricted
Subsidiaries), or (b) is directly or indirectly liable (as a guarantor or
otherwise) and (ii) no default with respect to which would permit (upon notice,
lapse of time or both) any holder of any other Indebtedness of the Company or
any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"NON-U.S. PERSON" means a person who is not a U.S. person, as defined in
Regulation S.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board of Directors or the President or any Vice President (whether or not
designated by a number or numbers or a word or words added before or after the
title "Vice President") of the Company and delivered to the Trustee. Each such
certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and
include the statements provided for in Section 12.05.
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"OFFSHORE GLOBAL SECURITIES" has the meaning provided in Section 2.04.
"OFFSHORE PHYSICAL SECURITIES" means Securities issued pursuant to Section
2.01 in exchange for interests in the Offshore Global Security following the
Offshore Securities Exchange Date or pursuant to Section 2.07(b), in each case
in registered form substantially in the form hereinabove recited.
"OFFSHORE SECURITIES EXCHANGE DATE" has the meaning provided in Section
2.04.
"OPINION OF COUNSEL" means an opinion in writing signed by legal counsel
who may be an employee of or counsel to the Company or who may be other counsel
satisfactory to the Trustee. Each such opinion shall comply with Section 314 of
the Trust Indenture Act and include the statements provided for in Section
12.05, and such others as may reasonably be requested by the Trustee, if and to
the extent required hereby.
"OUTSTANDING", when used with reference to Securities, subject to the
provisions of Article 12, means, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or shall
have been set aside, segregated and held in trust by the Company (if the
Company shall act as its own paying agent), provided that if such
Securities are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision
satisfactory to the Trustee shall have been made for giving such notice;
and
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 2.09 (unless proof satisfactory to the Trustee and
the Company is presented that any of such Securities is held by a person in
whose hands such Security is a legal, valid and binding obligation of the
Company).
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"PAYMENT DEFAULT" means any failure to pay any scheduled installment of
principal of, premium, if any, or interest on any Indebtedness within the grace
period provided for such payment in the documentation governing such
Indebtedness.
"PERMANENT OFFSHORE GLOBAL SECURITY" has the meaning provided in Section
2.04.
"PERMITTED LIENS" means (i) Liens securing Senior Debt under the Credit
Agreement or Guarantees thereof; (ii) Liens in favor of the Company; (iii)
Liens on assets of a Person existing at the time such Person is merged into or
consolidated with the Company or any Restricted Subsidiary of the Company or
becomes a Restricted Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger, consolidation or
acquisition and do not extend to any assets other than those of the Person
merged into or consolidated with the Company or that becomes a Restricted
Subsidiary of the Company; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens existing on the date of
the Indenture; (vii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (viii) Liens on any asset
securing Indebtedness incurred or assumed for the purpose of financing all or
any part of the cost of acquiring or constructing such asset, provided that such
Lien attaches to such asset concurrently with or within 180 days after the
acquisition or completion of construction thereof and attaches to no asset other
than such asset so financed; (ix) Liens arising in the ordinary course of
business which (a) do not secure Indebtedness, (b) do not secure any single
obligation (or series of related obligations) in an amount exceeding $5 million,
provided that the limitation in this clause (b) shall not apply to Liens
securing worker's compensation, unemployment insurance and other types of social
security, and (c) do not in the aggregate materially detract from the value of
the assets of the Company and its Restricted Subsidiaries, taken as a whole, or
materially impair the use thereof in the operation of their business; (x) Liens
on cash (not exceeding $20 million in aggregate amount) of Cornerstone Insurance
Company to secure its reimbursement obligations under letters of credit issued
for its account; (xi) other Liens or title defects (including matters which an
accurate survey might disclose) which (a) do not secure Indebtedness and (b) do
not materially detract from the value of real property or materially impair the
use thereof by the Company or any of its Restricted Subsidiaries in the
operation of its business; (xii) Liens securing
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Hedging Obligations permitted by clause (vi) of the covenant described
in Section 3.09; (xiii) other Liens on assets of the Company or any Restricted
Subsidiary of the Company securing Indebtedness that is permitted by the terms
of the Indenture to be outstanding having an aggregate principal amount at any
one time outstanding not to exceed 5% of the Stockholders' Equity of the
Company; and (xiv) Liens to secure Permitted Refinancing Indebtedness incurred
to refinance Indebtedness that was secured by a Lien permitted under the
Indenture and that was incurred in accordance with the provisions of the
Indenture; provided that such Liens do not extend to or cover any property or
assets of the Company or any Restricted Subsidiary other than assets or property
securing the Indebtedness so refinanced.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used solely to extend, refinance, renew, replace, defease
or refund, other Indebtedness of the Company or any of its Restricted
Subsidiaries; provided that (i) the principal amount of such Permitted
Refinancing Indebtedness does not exceed the principal amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of any premiums paid and reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Securities, such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Securities on terms at least as favorable to the Holders of
Securities as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and (iv)
such Indebtedness is incurred either by the Company or by the Restricted
Subsidiary which is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"PERSON" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"POST-PETITION INTEREST" means, with respect to any Indebtedness of any
Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the rate specified in such Indebtedness, whether or not
such interest is an allowed claim enforceable against such Person in a
bankruptcy case under Title 11 of the United States Code.
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"PRINCIPAL" wherever used with reference to the Securities or any Security
or any portion thereof, shall be deemed to include "AND PREMIUM, IF ANY".
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Securities in the form set forth in Section 2.05(a).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"QUALIFIED EQUITY INTERESTS" means all Equity Interests of the Company
other than Disqualified Stock of the Company.
"REGISTRAR" has the meaning provided in Section 2.06.
"REGISTRATION" means a registered exchange offer for the Securities by the
Company or other registration of the Securities under the Securities Act
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of July 21, 1997, among the Company and the Initial Purchasers and
certain permitted assigns specified therein.
"REGISTRATION STATEMENT" means the Registration Statement pursuant to and
as defined in the Registration Rights Agreement.
"REGULATION S" means Regulation S under the Securities Act.
"REMAINING LENOX SALE" means the sale of those assets comprising the
remaining partnership interests and nursing centers to be sold to Lenox
Healthcare, Inc. or its designee under that certain Agreement of Purchase and
Sale of Assets dated November 25, 1996, by and among First Healthcare
Corporation, Nationwide Care, Inc., Pasatiempo Development Corp.,
Hillhaven/Westfield Partnership, Hillhaven/Indiana Partnership, Vencor, Inc.,
Lenox Healthcare, Inc. and Thomas M. Clarke, as amended from time to time,
provided that such amendments do not include changes to the economic terms of
such agreement.
"REORGANIZATION SECURITIES" means, with respect to any Insolvency or
Liquidation Proceeding involving the Company, Capital Stock or any other
securities of the Company as reorganized or readjusted (or Capital Stock or any
other securities of any other Person provided for by a plan of reorganization or
readjustment) that are subordinated, at least to the same extent as the
Securities, to the payment of all outstanding Senior Debt after giving effect to
such plan of reorganization or readjustment; provided, however, that (i) the
Securities shall not be treated in any
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case or proceeding or other event described above as part of the same class of
claims as the Senior Debt or any class of claim on a parity with or senior to
the Senior Debt for any payment or distribution, (ii) such securities are
subordinated at least to the same extent as the Securities to Senior Debt of the
Company and any securities issued in exchange for such Senior Debt and (iii)
such securities are authorized by an order or decree of a court of competent
jurisdiction in a reorganization proceeding under any applicable bankruptcy,
insolvency or similar law which gives effect to the subordination of the
Securities to Senior Debt in a manner and with an effect which would be required
if this proviso were not included in this paragraph; provided further that the
Senior Debt is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment and issuing such securities.
"RESIDENTIAL DEPOSIT BONDS" means bonds issued by the Company or any of its
Restricted Subsidiaries to tenants of residential units of New Pond Village in
Walpole, Massachusetts evidencing the obligation to repay at the end of their
tenancies amounts paid by them at the beginning of their tenancies, provided
that the aggregate outstanding principal amount of all such bonds (including any
such bonds outstanding on the date of the Indenture) shall not at any time
exceed $53 million.
"RESPONSIBLE OFFICER" when used with respect to the Trustee means any vice
president (whether or not designated by numbers or words added before or after
the title "vice president"), any trust officer, any assistant trust officer, any
assistant vice president, any assistant secretary, any assistant treasurer, or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"RESTRICTED INVESTMENT" means (i) an Investment (including Guarantees of
Indebtedness or other obligations) in an Unrestricted Subsidiary, (ii) any
Investment in an Affiliate that is not permitted by the first paragraph of the
covenant described in Section 3.15 and (iii) Investments received by the Company
or its Restricted Subsidiaries as consideration for Asset Sales which are not
otherwise permitted to be received by the first sentence of the covenant
described in Section 3.10.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than an
Unrestricted Subsidiary and any Subsidiary of an Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Rating Group and its successors.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY" or "SECURITIES" means any Security or Securities, as the case
may be, authenticated and delivered under this Indenture. For all purposes of
this Indenture, the term "Securities" shall include any Exchange Securities to
be issued and exchanged for any Securities pursuant to the Registration Rights
Agreement and this Indenture and, for purposes of this Indenture, all Securities
and Exchange Securities shall vote together as one series of Securities under
this Indenture.
"SECURITY REGISTER" has the meaning provided in Section 2.06.
"SENIOR DEBT" means (i) all Indebtedness of the Company under the Credit
Agreement, including principal of, premium, if any, and interest on such
Indebtedness and all other amounts due on or in connection with such
Indebtedness including all charges, fees and expenses, (ii) all other
Indebtedness of the Company, including principal of, premium, if any, and
interest on such Indebtedness, unless the instrument under which such
Indebtedness is created, incurred, assumed or Guaranteed expressly provides that
such Indebtedness is not senior or superior in right of payment to the
Securities, and all renewals, extensions modifications, amendments or
refinancings thereof and (iii) all interest on any Indebtedness referred to in
clause (i) and (ii) accruing during the pendency of any bankruptcy or insolvency
proceeding whether or not allowed thereunder. Notwithstanding the foregoing,
Senior Debt shall not include (a) Subordinated Debt of Company; provided,
however, that no Indebtedness shall be deemed to be Subordinated Debt of the
Company solely by reason of such other Indebtedness being secured and such
Indebtedness not being secured, (b) the Securities, (c) any Indebtedness of the
Company to any of its Restricted Subsidiaries and (d) any Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Code, is without recourse to the Company.
"SHELF REGISTRATION STATEMENT" means a Shelf Registration Statement of the
Company pursuant to and as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Subsidiary that, together with its Subsidiaries, (i) for the most recent fiscal
year of the Company, accounted for more than 10% of the consolidated revenues of
the Company and its consolidated subsidiaries or (ii) as of the end of such
fiscal year, was the owner of more than 10% of the consolidated assets of the
Company and its consolidated subsidiaries, all as set forth on the most recently
available financial statements of the Company for such fiscal year.
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"STOCKHOLDERS' EQUITY" means, with respect to any Person as of any date,
the stockholders' equity of such Person determined in accordance with GAAP as of
the date of the most recent available internal financial statements of such
Person, and calculated on a pro forma basis to give effect to any acquisition or
disposition by such Person consummated or to be consummated since the date of
such financial statements and on or prior to the date of such calculation.
"SUBORDINATED DEBT" means any Indebtedness (whether outstanding on the
Issue Date or hereafter incurred) which is by its terms expressly subordinate or
junior in right of payment to the Securities.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof). Unrestricted
Subsidiaries shall not be included in the definition of Subsidiary for any
purposes of the Indenture (except, as the context may otherwise require, for
purposes of the definition of "Unrestricted Subsidiary").
"TEMPORARY OFFSHORE GLOBAL SECURITY" has the meaning provided in Section
2.04.
"TRUST INDENTURE ACT OF 1939" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was originally
executed, and "TIA", when used in respect of an indenture supplemental hereto,
means such Act as in force at the time such indenture supplemental hereto
becomes effective.
"TRUSTEE" means the entity identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article Five, shall also include any
successor trustee.
"U.S. GLOBAL SECURITY" has the meaning provided in Section 2.04.
"U.S. PERSON" has the meaning provided in Regulation S.
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"U.S. PHYSICAL SECURITIES" means Securities issued in the form of permanent
certificated Securities in registered form in substantially the form hereinabove
recited.
"UNRESTRICTED SUBSIDIARY" means Atria and any other Subsidiary that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution; but only to the extent that such
Subsidiary (i) has no Indebtedness other than Non-Recourse Debt, (ii) is not
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company, (iii) is a Person with
respect to which neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results and (iv)
has not guaranteed or otherwise directly or indirectly provided credit support
for any Indebtedness of the Company or any of its Restricted Subsidiaries;
provided, however, that Atria will continue to qualify as an Unrestricted
Subsidiary notwithstanding (a) the existence of Indebtedness under Atria's bank
credit facility which does not qualify as Non-Recourse Debt, (b) the incurrence
of Indebtedness Guaranteed by the Company or any Restricted Subsidiary which
Atria is permitted to incur under the first paragraph of Section 3.09 or (c) any
transaction between the Company or any Restricted Subsidiary and Atria which is
permitted by the first paragraph of Section 3.15, but Atria shall cease to
qualify as an Unrestricted Subsidiary if it otherwise fails to comply with the
conditions set forth in clauses (i) through (iv) above.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not cease
to qualify as an Unrestricted Subsidiary if the Company Guarantees Indebtedness
of such Unrestricted Subsidiary and such Guarantee is a Restricted Investment
which is permitted by the provisions in Section 3.08.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted under the covenant described in Section 3.08. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such
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Indebtedness is not permitted to be incurred as of such date under this
Indenture, the Company shall be in Default under this Indenture). The Board of
Directors of the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that such designation shall be deemed to
be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
the Indenture, and (ii) no Default or Event of Default would be in existence
following such designation.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
Section 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Bankruptcy Law"..................... 4.01
"Change of Control Offer"............ 3.17
"Change of Control Payment".......... 3.17
"Change of Control Payment Date"..... 3.17
"Commencement Date".................. 3.10
"Covenant Defeasance"................ 11.03
"Custodian".......................... 4.01
"incur".............................. 3.09
"Legal Defeasance"................... 11.02
"Offer Amount"....................... 3.10
"Offer Period"....................... 3.10
"Purchase Date"...................... 3.10
"Restricted Payments"................ 3.08
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ARTICLE 2
Issue, Execution, Form and Registration of Securities
Section 2.01. Authentication and Delivery of Securities. Upon the execution
and delivery of this Indenture, or from time to time thereafter, Securities
(including Exchange Securities) in an aggregate principal amount not in excess
of the amount specified in the form of Security hereinabove recited (except as
otherwise provided in Section 2.09) may be executed by the Company and delivered
to the Trustee for authentication, and the Trustee shall thereupon authenticate
and make available for delivery said Securities to or upon the written order of
the Company, signed by its Chairman of the Board of Directors, or any Vice
Chairman of the Board of Directors, or its President or any Vice President
(whether or not designated by a number or numbers or a word or words added
before or after the title "Vice President") without any further action by the
Company.
Section 2.02. Execution of Securities. The Securities shall be signed on
behalf of the Company by its Chairman of the Board of Directors or any Vice
Chairman of the Board of Directors or its President or any Vice President
(whether or not designated by a number or numbers or a word or words added
before or after the title "Vice President"). Such signature may be the manual
or facsimile signatures of the present or any future such officers.
In case any officer of the Company who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Company; and any Security may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Indenture any such person was not such officer.
Section 2.03. Certificate of Authentication. Only such Securities as shall
bear thereon a certificate of authentication substantially in the form
hereinabove recited, executed by the Trustee by manual signature of one of its
authorized signatories, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. Such certificate by the Trustee upon any
Security executed by the Company shall be conclusive evidence that the Security
so authenticated has been duly authenticated and delivered hereunder and that
the Holder is entitled to the benefits of this Indenture.
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Section 2.04. Form, Denomination and Date of Securities; Payments of
Interest. The Securities and the Trustee's certificates of authentication shall
be substantially in the form recited above; provided that Exchange Securities
(i) shall contain the alternative third paragraph appearing on the reverse of
the Securities in the form recited above and (ii shall not contain terms with
respect to transfer restrictions. The Securities shall be issuable in
denominations provided for in the form of Security recited above. The Securities
shall be numbered, lettered, or otherwise distinguished in such manner or in
accordance with such plans as the officers of the Company executing the same may
determine with the approval of the Trustee.
Any of the Securities may be issued with appropriate insertions, omissions,
substitutions and variations, and may have imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, including those required by Section 2.05, or with
the rules of any securities market in which the Securities are admitted to
trading, or to conform to general usage.
Each Security shall be dated the date of its authentication, shall bear
interest from the applicable date and shall be payable on the dates specified on
the face of the form of Security recited above.
Securities offered and sold in reliance on Section 4(2) and Rule 144A shall
be issued initially in the form of a single permanent global Security in
registered form, substantially in the form hereinabove recited (the "U.S. GLOBAL
SECURITY"), deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as herein provided. The
aggregate principal amount of the U.S. Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of a single temporary global
Security in registered form substantially in the form hereinabove recited (the
"TEMPORARY OFFSHORE GLOBAL SECURITY") deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as provided herein. At any time on and after September 1, 1997 (the
"OFFSHORE SECURITIES EXCHANGE DATE"), a single permanent global Security in
registered form substantially in the form hereinabove recited without the
Private Placement Legend (the "PERMANENT OFFSHORE GLOBAL SECURITY"; and together
with the Temporary Offshore Global Security, the "OFFSHORE GLOBAL SECURITIES")
duly executed by the Company and authenticated by the Trustee as provided herein
shall be deposited with
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the Trustee, as custodian for the Depositary, and the Registrar shall reflect on
its books and records the date and a decrease in the principal amount of the
Temporary Offshore Global Security in an amount equal to the principal amount of
the beneficial interest in the Temporary Offshore Global Security transferred.
The Offshore Physical Securities and U.S. Physical Securities are sometimes
collectively herein referred to as the "PHYSICAL SECURITIES". The U.S. Global
Security and the Offshore Global Security are sometimes referred to herein as
the "GLOBAL SECURITIES".
The person in whose name any Security is registered at the close of
business on any Interest Record Date with respect to any Interest Payment Date
shall be entitled to receive the interest, if any, payable on such Interest
Payment Date notwithstanding any transfer or exchange of such Security
subsequent to the Interest Record Date and prior to such Interest Payment Date,
except if and to the extent the Company shall default in the payment of the
interest due on such Interest Payment Date, in which case such defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted
interest, shall be paid to the persons in whose names outstanding Securities are
registered at the close of business on a subsequent record date (which shall be
not less than five Business Days prior to the date of such payment) established
by notice given by mail by or on behalf of the Company to the holders of
Securities not less than 15 days preceding such subsequent record date.
Section 2.05. Restrictive Legends. (a) Unless and until a Security is
exchanged for an Exchange Security in connection with an effective Registration
pursuant to the Registration Rights Agreement, the U.S. Global Security,
Temporary Offshore Global Security, each U.S. Physical Security and each
Offshore Physical Security issued pursuant to Section 2.07(b), shall bear the
following legend on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
ANNIVERSARY OF THE LATER OF THE DATE OF ORIGINAL ISSUANCE HEREOF OR THE
SALE HEREOF BY THE COMPANY OR ANY AFFILIATE OF THE COMPANY OR (Y) BY AN
AFFILIATE OF THE COMPANY OR BY ANY HOLDER THAT WAS AN AFFILIATE OF THE
COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
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SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),
(3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), AND, IF SUCH
TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS PRIOR TO THE EXPIRATION
OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(2) OF
REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE THAT MAY BE OBTAINED
FROM THE TRUSTEE IS DELIVERED BY THE TRANSFEREE, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
(IF APPLICABLE) UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A OR (2) A NON-U.S. PERSON OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
(b) Each Global Security, whether or not an Exchange Security, shall also
bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
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REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.08 OF THE INDENTURE.
Section 2.06. Registration, Transfer and Exchange. The Securities are
issuable only in registered form. The Company will keep at each office or agency
to be maintained for the purpose as provided in Section 3.02 (the "REGISTRAR") a
register or registers (the "SECURITY REGISTER(S)") in which, subject to such
reasonable regulations as it may prescribe, it will register, and will register
the transfer of, Securities as in this Article provided. Such Security Register
shall be in written form in the English language or in any other form capable of
being converted into such form within a reasonable time. At all reasonable times
such Security Register or Security Registers shall be open for inspection by the
Trustee.
Upon due presentation for registration of transfer of any Security at each
such office or agency, the Company shall execute and the Trustee shall
authenticate and make available for delivery in the name of the transferee or
transferees a new Security or Securities in authorized denominations for a like
aggregate principal amount.
A Holder may transfer a Security only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Security
Register. Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee, and any agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and
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neither the Company, the Trustee, nor any such agent shall be affected by notice
to the contrary. Furthermore, any Holder of a Global Security shall, by
acceptance of such Global Security, agree that transfers of beneficial interests
in such Global Security may be effected only through a book entry system
maintained by the Holder of such Global Security (or its agent) and that
ownership of a beneficial interest in the Security shall be required to be
reflected in a book entry. When Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount of Securities of other authorized denominations
(including an exchange of Securities for Exchange Securities), the Registrar
shall register the transfer or make the exchange as requested if the
requirements for such transactions set forth herein are met; provided that no
exchanges of Securities for Exchange Securities shall occur until a Registration
Statement shall have been declared effective by the Commission and that any
Securities that are exchanged for Exchange Securities shall be cancelled by the
Trustee. To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's
request.
The Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities (other than any such transfer taxes or
other similar governmental charge payable upon exchanges pursuant to Section
2.11, 7.05 or 10.03). No service charge to any Holder shall be made for any such
transaction.
The Company shall not be required to exchange or register a transfer of (a)
any Securities for a period of 15 days next preceding the first mailing of
notice of redemption of Securities to be redeemed, or (b) any Securities
selected, called or being called for redemption except, in the case of any
Security where public notice has been given that such Security is to be redeemed
in part, the portion thereof not so to be redeemed.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Section 2.07. Book-Entry Provisions for Global Securities. (a) The U.S.
Global Security and Offshore Global Security initially shall (i) be registered
in the name of the Depositary for such Global Securities or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (ii) bear legends as set forth in Section 2.05.
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Members of, or participants in, the Depositary ("AGENT MEMBERS") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under the Global
Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Security
may be transferred in accordance with the rules and procedures of the Depositary
and the provisions of Section 2.08. In addition, U.S. Physical Securities and
Offshore Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in the U.S. Global Security or the
Offshore Global Security, respectively, if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the U.S.
Global Security or the Offshore Global Security, as the case may be, and a
successor depositary is not appointed by the Company within 90 days of such
notice or (ii an Event of Default of which the Trustee has actual notice has
occurred and is continuing and the Registrar has received a request from the
Depositary to issue such Physical Securities.
(c) Any beneficial interest in one of the Global Securities that is
transferred to a person who takes delivery in the form of an interest in the
other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Security for as long as it remains such an interest.
(d) In connection with any transfer of a portion of the beneficial
interests in the U.S. Global Security to beneficial owners pursuant to paragraph
(b) of this Section 2.07, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the U.S. Global Security in
an amount equal to the principal amount of the beneficial interest in the U.S.
Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and make available for delivery, one or more U.S.
Physical Securities of like tenor and amount.
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(e) In connection with the transfer of the entire U.S. Global Security or
Offshore Global Security to beneficial owners pursuant to paragraph (b) of this
Section, the U.S. Global Security or Offshore Global Security, as the case may
be, shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in the U.S. Global Security or Offshore Global Security, as the case
may be, an equal aggregate principal amount of U.S. Physical Securities or
Offshore Physical Securities, as the case may be, of authorized denominations.
(f) Any U.S. Physical Security delivered in exchange for an interest in the
U.S. Global Security pursuant to paragraph (b) or (d) of this Section shall,
except as otherwise provided by paragraph 2.08(e), bear the legend regarding
transfer restrictions applicable to the U.S. Physical Security set forth in
Section 2.05.
(g) Any Offshore Physical Security delivered in exchange for an interest in
the Offshore Global Security pursuant to paragraph (b) of this Section shall,
except as otherwise provided by paragraph 2.08(e), bear the legend regarding
transfer restrictions applicable to the Offshore Physical Security set forth in
Section 2.05.
(h) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
Section 2.08. Special Transfer Provisions. Unless and until a Security is
exchanged for an Exchange Security in connection with an effective Registration
pursuant to the Registration Rights Agreement, the following provisions shall
apply:
(a) Transfers to QIBs. The following provisions shall apply with respect to
the registration of any proposed transfer of a U.S. Physical Security or an
interest in the U.S. Global Security to a QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of (x) U.S. Physical
Securities, the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Security stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Security
for its own account or an account with respect to which it exercises sole
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investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in the U.S. Global Security, the transfer of such interest may be
effected only through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Security
to be transferred consists of U.S. Physical Securities, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions given
in accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the U.S. Global Security in an amount equal to
the principal amount of the U.S. Physical Securities to be transferred and
the Trustee shall cancel the U.S. Physical Security so transferred.
(b) Transfers of Interests in the Temporary Offshore Global Security. The
following provisions shall apply with respect to registration of any proposed
transfer of interests in the Temporary Offshore Global Security:
(i) The Registrar shall register the transfer of any Security (x) if
the proposed transferee is a Non-U.S. Person and the proposed transferor
has delivered to the Registrar a certificate substantially in the form of
Exhibit A hereto or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form of
Security stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Security stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a QIB within the meaning of
Rule 144A, and is aware that the sale to it is being made in reliance of
Rule 144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
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(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the U.S. Global Security, in an
amount equal to the principal amount of the Temporary Offshore Global
Security to be transferred, and the Trustee shall decrease the amount of
the Temporary Offshore Global Security in a like amount.
(c) Transfers of Interests in the Permanent Offshore Global Security or
Offshore Physical Securities to U.S. Persons. The following provisions shall
apply with respect to any transfer of interests in the Permanent Offshore Global
Security or Offshore Physical Securities to U.S. Persons: The Registrar shall
register the transfer of any such Security without requiring any additional
certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any transfer of a Security to a Non-U.S. Person:
(i) Prior to September 1, 1997, the Registrar shall register any
proposed transfer of a Security to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit A hereto from the proposed
transferor.
(ii) On and after September 1, 1997, the Registrar shall register any
proposed transfer to any Non-U.S. Person (x) if the Security to be
transferred is a U.S. Physical Security or an interest in the U.S. Global
Security, upon receipt of a certificate substantially in the form of
Exhibit A from the proposed transferor or (y) if the Security to be
transferred is an Offshore Physical Security or an interest in the
Permanent Offshore Global Security, without requiring any additional
certification.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Security in an
amount equal to the principal amount of the beneficial interest in the U.S.
Global Security to be transferred, and (b) if the proposed transferee is an
Agent Member, upon receipt by the Registrar of instructions given in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the
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Offshore Global Security in an amount equal to the principal amount of the
U.S. Physical Securities or the U.S. Global Security, as the case may be,
to be transferred, and the Trustee shall cancel the Physical Security, if
any, so transferred or decrease the amount of the U.S. Global Security, as
the case may be.
(e) Private Placement Legend. Upon the transfer, exchange or replacement
of Securities not bearing the Private Placement Legend, the Registrar shall
deliver Securities that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Securities bearing the Private Placement
Legend, the Registrar shall deliver only Securities that bear the Private
Placement Legend unless the requested transfer is after the time period referred
to in Rule 144(k) under the Securities Act (or any successor provision thereto)
as in effect with respect to such transfer, or either (i) the circumstances
contemplated by the fifth paragraph of Section 2.04 or paragraph (d)(ii) of this
Section 2.08 exists or (ii there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
(f) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture. The Registrar shall not register a transfer of any Security
unless such transfer complies with the restrictions on transfer of such Security
set forth in this Indenture. In connection with any transfer of Securities, each
Holder agrees by its acceptance of the Securities to furnish the Registrar or
the Company such certifications, legal opinions or other information as either
of them may reasonably require to confirm that such transfer is being made
pursuant to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Registrar shall not be
required to determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions or other
information.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.07(a) or this Section 2.08. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
Each Holder of a Security agrees to indemnify the Company and the Trustee
against any liability that may result from the transfer, exchange or assignment
of such Holder's Security in violation of any provision of this Indenture and/or
applicable United States Federal or state securities law.
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The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
Section 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
In case any temporary or definitive Security shall become mutilated, defaced or
be apparently destroyed, lost or stolen, the Company in its discretion may
execute, and upon the written request of any officer of the Company, the Trustee
shall authenticate and make available for delivery, a new Security, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the Security
so apparently destroyed, lost or stolen. In every case the applicant for a
substitute Security shall furnish to the Company and to the Trustee and any
agent of the Company or the Trustee such security or indemnity as may be
required by them to indemnify and defend and to save each of them harmless and,
in every case of destruction, loss or theft evidence to their satisfaction of
the apparent destruction, loss or theft of such Security and of the ownership
thereof.
Upon the issuance of any substitute Security, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee) connected therewith. In case any Security which has
matured or is about to mature, or has been called for redemption in full, shall
become mutilated or defaced or be apparently destroyed, lost or stolen, the
Company may, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
or defaced Security), if the applicant for such payment shall furnish to the
Company and to the Trustee and any agent of the Company or the Trustee such
security or indemnity as any of them may require to save each of them harmless
from all risks, however remote, and, in every case of apparent destruction, loss
or theft, the applicant shall also furnish to the Company and the Trustee and
any agent of the Company or the Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Security and of the ownership
thereof.
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Every substitute Security issued pursuant to the provisions of this Section
by virtue of the fact that any Security is apparently destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the apparently destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits of (but shall be
subject to all the limitations of rights set forth in) this Indenture equally
and proportionately with any and all other Securities duly authenticated and
delivered hereunder. All Securities shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, defaced, or
apparently destroyed, lost or stolen Securities and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
Section 2.10. Cancellation of Securities. All Securities surrendered for
payment, redemption, registration of transfer or exchange, if surrendered to the
Company or any agent of the Company or the Trustee, shall be delivered to the
Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee shall deliver
cancelled Securities to the Company. If the Company shall acquire any of the
Securities, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
Section 2.11. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute and the Trustee shall authenticate and make
available for delivery temporary Securities (printed, lithographed, typewritten
or otherwise reproduced, in each case in form satisfactory to the Trustee).
Temporary Securities shall be issuable as registered Securities without coupons,
of any authorized denomination, and substantially in the form of the definitive
Securities but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Company
with the concurrence of the Trustee. Temporary Securities may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the
Company shall execute and shall furnish definitive Securities and thereupon
temporary Securities may be surrendered in exchange therefor without charge at
each office or agency to be maintained by the Company for the purpose pursuant
to Section 3.02, and the Trustee shall authenticate and make available for
delivery in exchange for such temporary Securities a like aggregate principal
amount of definitive
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Securities of authorized denominations. Until so exchanged the temporary
Securities shall be entitled to the same benefits under this Indenture as
definitive Securities.
Section 2.12. CUSIP and CINS Numbers. The Company in issuing the
Securities may use "CUSIP" and "CINS" numbers (if then generally in use), and
the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in
notices of redemption or exchange as a convenience to Holders; provided that any
such notice shall state that no representation is made as the correctness of
such numbers either as printed on the Securities or as contained in any notice
of redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Securities. The Company shall promptly
notify the Trustee of any change in the CUSIP numbers or CINS numbers.
ARTICLE 3
Covenants of the Company and the Trustee.
Section 3.01. Payment of Principal and Interest. The Company covenants and
agrees that it will duly and punctually pay or cause to be paid the principal
of, and interest on, each of the Securities at the place or places, at the
respective times and in the manner provided in the Securities. Each installment
of interest on the Securities may be paid by mailing checks for such interest
payable to or upon the written order of the holders of Securities entitled
thereto as they shall appear on the registry books of the Company, or by wire
transfer to such holders in immediately available funds, to such bank or other
entity in the continental United States as shall be designated by such holders
and shall have appropriate facilities for such purpose, or in accordance with
the standard operating procedures of the Depositary.
Section 3.02. Offices for Payments, etc. So long as any of the Securities
remain outstanding, the Company will maintain in the City of New York, the
following: (a) an office or agency where the Securities may be presented for
payment, (b) an office or agency where the Securities may be presented for
registration of transfer and for exchange as in this Indenture provided and (c)
an office or agency where notices and demands to or upon the Company in respect
of the Securities or of this Indenture may be served. The Company will give to
the Trustee written notice of the location of any such office or agency and of
any change of location thereof. The Company hereby initially designates the
Corporate Trust Office of the Trustee as the office or agency for each such
purpose. In case the Company shall fail to maintain any such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Corporate Trust Office.
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Section 3.03. Appointment to Fill a Vacancy in Office of Trustee. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section, a Trustee, so that there shall
at all times be a Trustee hereunder.
Section 3.04. Paying Agents. Whenever the Company shall appoint a paying
agent other than the Trustee, it will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities (whether such sums
have been paid to it by the Company or by any other obligor on the Securities)
in trust for the benefit of the holders of the Securities or of the Trustee,
(b) that it will give the Trustee notice of any failure by the Company (or
by any other obligor on the Securities) to make any payment of the principal of
or interest on the Securities when the same shall be due and payable, and
(c) pay any such sums so held in trust by it to the Trustee upon the
Trustee's written request at any time during the continuance of the failure
referred to in clause (b) above.
The Company will, prior to each due date of the principal of or interest on
the Securities, deposit with the paying agent a sum sufficient to pay such
principal or interest, and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of any failure to take such action.
If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of or interest on the Securities, set aside,
segregate and hold in trust for the benefit of the holders of the Securities a
sum sufficient to pay such principal or interest so becoming due. The Company
will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the Company may
at any time, for the purpose of obtaining a satisfaction and discharge of this
Indenture or for any other reason, pay or cause to be paid to the Trustee all
sums held in trust by the Company or any paying agent hereunder, as required by
this Section, such sums to be held by the Trustee upon the trusts herein
contained.
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Anything in this Section to the contrary notwithstanding, the agreement to
hold sums in trust as provided in this Section are subject to the provisions of
Sections 11.05 and 11.06.
Section 3.05. Certificates to Trustee. (a) The Company will deliver to the
Trustee within 90 days after the end of each fiscal year of the Company a
certificate from the principal executive, financial or accounting officer of the
Company as to his or her knowledge of the Company's compliance with all
conditions and covenants under this Indenture (such compliance to be determined
without regard to any period of grace or requirement of notice provided under
this Indenture).
(b) The Company will deliver to the Trustee, as soon as possible and in
any event within 10 days after the Company becomes aware or should reasonably
become aware of the occurrence of an Event of Default or a Default, an Officers'
Certificate setting forth the details of such Event of Default or Default, and
the action which the Company proposes to take with respect thereto.
(c) The Company will deliver to the Trustee within 90 days after the end
of each fiscal year of the Company a written statement by the Company's
independent public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Securities as they
relate to accounting matters, and (ii) whether, in connection with their audit
examination, any Default has come to their attention and, if such a Default has
come to their attention, specifying the nature and period of the existence
thereof.
Section 3.06. Securityholders' Lists. If and so long as the Trustee shall
not be the Registrar, the Company will furnish or cause to be furnished to the
Trustee a list in such form as the Trustee may reasonably require of the names
and addresses of the holders of the Securities pursuant to Section 312 of the
Trust Indenture Act (a) semi-annually not more than 15 days after each Interest
Record Date as of such Interest Record Date, and (b) at such other times as the
Trustee may request in writing, within thirty days after receipt by the Company
of any such request as of a date not more than 15 days prior to the time such
information is furnished.
Section 3.07. Reports by the Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall, within sixty days after each May 15 following
the date of this Indenture deliver to Holders a brief report, dated as of such
May 15, which complies with the provisions of such Section 313(a).
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(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange, if any, upon which
the Securities are listed, with the Commission and with the Company. The
Company will promptly notify the Trustee when the Securities are listed on any
stock exchange.
Section 3.08. Limitation on Restricted Payments. The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of the
Company's or any Restricted Subsidiaries' Equity Interests (other than (x)
dividends or distributions payable in Qualified Equity Interests of the Company
and (y) dividends or distributions payable to the Company or any Restricted
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company or any of its Restricted
Subsidiaries; (iii) make any voluntary or optional principal payment on, or
voluntary or optional purchase, redemption, defeasance, or other acquisition or
retirement for value of, any Subordinated Debt; or (iv) make any Investment that
is a Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment (the amount of any such Restricted Payment, if other than cash, shall be
the fair market value (as conclusively evidenced by a resolution of the Board of
Directors of the Company set forth in an Officers' Certificate delivered to the
Trustee within 60 days prior to the date of such Restricted Payment) of the
asset(s) proposed to be transferred by the Company or such Restricted
Subsidiary, as the case may be, pursuant to such Restricted Payment):
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the most recently ended four full fiscal quarter period
for which internal financial statements are available immediately preceding
the date of such Restricted Payment, have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 3.09; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries
after June 30, 1997 (excluding Restricted Payments permitted by clauses
(B), (C) and (D) of the next succeeding paragraph), is less than the sum of
(i) 50% of the Consolidated Net Income of the Company for the period (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after June 30,
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1997 to the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by the Company from the issue or sale (other than to
a Restricted Subsidiary of the Company) since June 30, 1997 of Qualified
Equity Interests of the Company or of debt securities of the Company or any
of its Restricted Subsidiaries that have been converted into or exchanged
for such Qualified Equity Interests of the Company, plus (iii) $100
million.
If no Default or Event of Default has occurred and is continuing, or would
occur as a consequence thereof, the foregoing provisions will not prohibit the
following Restricted Payments: (A) the payment of any dividend within 60 days
after the date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of the Indenture; (B) the
payment of cash dividends on any series of Disqualified Stock issued after the
date of the Indenture in an aggregate amount not to exceed the cash received by
the Company since the date of the Indenture upon issuance of such Disqualified
Stock; (C) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of the Company or any Restricted Subsidiary in exchange for, or
out of the net cash proceeds of, the substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of Qualified Equity Interests of the
Company; provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement or other acquisition
shall be excluded from clause (c)(ii) of the preceding paragraph; (D) the
defeasance, redemption or repurchase of Subordinated Debt (including any
Subordinated Debt that constitutes Acquired Debt) with the net cash proceeds
from an incurrence of Permitted Refinancing Indebtedness or in exchange for or
out of the net cash proceeds from the substantially concurrent sale (other than
to a Restricted Subsidiary) of Qualified Equity Interests of the Company;
provided, that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase, retirement or other acquisition shall be
excluded from clause (c)(ii) of the preceding paragraph; (E) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company or any Restricted Subsidiary held by any member of the Company's
(or any of its Restricted Subsidiaries') management pursuant to any management
equity subscription agreement or stock option agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $5 million in any twelve-month period; and (F)
the repurchase of any Indebtedness that is pari passu with the Securities or any
Subordinated Debt at a purchase price not greater than 101% of the principal
amount of such Indebtedness or Subordinated Debt, as the case may be, in the
event of a Change of Control pursuant to a provision similar to the provision
described in Section 3.17; provided that prior to such repurchase the Company
has made a Change of Control Offer as provided in Section 3.17 and has
repurchased all Securities validly tendered for payment in connection with such
Change of Control Offer.
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Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by this covenant were computed.
Section 3.09. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, Guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") after the
date of the Indenture any Indebtedness (including Acquired Debt) and that the
Company will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) and
may issue shares of Disqualified Stock if (i) no Default or Event of Default
will have occurred and be continuing or would occur as a consequence thereof and
(ii) the Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2.25 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom) as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period. Indebtedness consisting of reimbursement obligations in
respect of a letter of credit will be deemed to be incurred when the letter of
credit is first issued. The Company will not permit any of its Unrestricted
Subsidiaries to incur any Indebtedness other than Non-Recourse Debt; provided,
however, that Atria may incur Indebtedness under Atria's bank credit facility
which is Guaranteed by the Company and its Restricted Subsidiaries up to an
aggregate amount of $100 million through August 26, 1998, declining to $75
million, $50 million and $25 million in each respective one-year period
thereafter.
The foregoing provisions will not apply to:
(i) the incurrence by the Company of Senior Debt under the Credit
Agreement in an aggregate principal amount at any time outstanding not to
exceed an amount equal to $2.0 billion less the aggregate amount of all
mandatory payments applied to permanently reduce the commitments with
respect to such Indebtedness;
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(ii) the incurrence by the Company of Indebtedness represented by the
Securities;
(iii) Existing Indebtedness;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace,
defease or refund, Indebtedness that was permitted by the Indenture to be
incurred (including, without limitation, Existing Indebtedness);
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided that upon either (a) the
transfer or other disposition by a Restricted Subsidiary or the Company of
any Indebtedness so permitted under this clause (v) to a Person other than
the Company or a Restricted Subsidiary or (b) the issuance, sale, transfer
or other disposition of Equity Interests (including by consolidation or
merger) in a Restricted Subsidiary to a Person other than the Company or a
Restricted Subsidiary which results in such Restricted Subsidiary ceasing
to be a Restricted Subsidiary, the provisions of this clause (v) shall no
longer be applicable to such Indebtedness and such Indebtedness shall be
deemed to have been incurred at the time of any such issuance, sale,
transfer or other disposition, as the case may be;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations or Guarantees thereof, provided that
such Hedging Obligations are incurred for the purpose of fixing or hedging
interest rate or currency risk with respect to any fixed or floating rate
Indebtedness that is permitted by the Indenture to be outstanding or any
receivable or liability, the payment of which is determined by reference to
a foreign currency; provided that the notional principal amount of any such
Hedging Obligation does not exceed the principal amount of the Indebtedness
to which such Hedging Obligation relates;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by performance bonds, standby
letters of credit or appeal bonds, in each case to the extent incurred in
the ordinary course of business of the Company or such Restricted
Subsidiary;
(viii) the incurrence by any Restricted Subsidiary of the Company of
Indebtedness, the aggregate principal amount of which, together with all
other
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Indebtedness of the Company's Restricted Subsidiaries at the time
outstanding (excluding Existing Indebtedness until repaid or refinanced),
does not exceed the greater of (1) 10% of the Company's Stockholders'
Equity as of the date of incurrence or (2) $10 million; provided that, in
the case of clause (1) only, the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such Indebtedness (including Acquired Subsidiary Debt) is incurred would
have been at least 2.25 to 1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if such
Indebtedness had been incurred at the beginning of such four-quarter
period; provided further, that solely for the purpose of determining
whether the aggregate principal amount of Indebtedness of the Company's
Restricted Subsidiaries at any time outstanding exceeds 10% of the
Company's Stockholders' Equity, Acquired Subsidiary Debt shall be excluded;
and
(ix) the incurrence by the Company of Indebtedness (in addition to
Indebtedness permitted by any other clause of this paragraph) in an
aggregate principal amount at any time outstanding not to exceed $50.0
million.
Section 3.10. Disposition of Proceeds of Asset Sales. The Company will
not, and will not permit any of its Restricted Subsidiaries to, consummate an
Asset Sale unless (i) the Company (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of such Asset Sale at least equal to the
fair market value (as conclusively determined by a resolution of the Board of
Directors of the Company set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise disposed
of and (ii) either (x) at least 75% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of cash; provided that
for purposes of this provision, the amount of (A) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet or in
the notes thereto), of the Company or any Restricted Subsidiary (other than, in
the case of an Asset Sale by the Company, liabilities that are by their terms
subordinated to the Securities) that are assumed by the transferee of any such
assets and (B) any securities or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are immediately
converted by the Company or such Restricted Subsidiary into cash (or as to which
the Company or such Restricted Subsidiary has received at or prior to the
consummation of the Asset Sale a commitment (which may be subject to customary
conditions) from a nationally recognized investment, merchant or commercial bank
to convert into cash within 90 days of the consummation of such Asset Sale and
which are thereafter actually converted into cash within such 90-day period)
will be deemed to be cash (but shall not be deemed to be Net Proceeds for
purposes of the following provisions until
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reduced to cash) or (y) solely in the case of Asset Sales involving assets
acquired after the date of the Indenture, the consideration therefor received by
the Company or any Restricted Subsidiary is in the form of Equity Interests of
the transferee of such assets; provided that such transferee does not engage to
any material extent in any business other than the ownership, operation or
management of Healthcare Facilities, including the acceptance of risk for the
provision of long-term care and provided further that the aggregate value of any
such Equity Interest, together with all other Equity Interests acquired by the
Company or any of its Restricted Subsidiaries pursuant to this clause (y) during
the twelve month period preceding the acquisition of such Equity Interest, does
not exceed 10% of the Company's Stockholders' Equity as set forth in the
Company's most recently available quarterly financial statements.
Notwithstanding the foregoing, it will not be a violation of the foregoing
provisions if the Company or a Restricted Subsidiary receives Investments as all
or part of the consideration for an Asset Sale (which consideration is not
otherwise permitted), if such Investments constitute Restricted Investments
permitted by Section 3.08.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or the Restricted Subsidiary, as the case may be, may apply such Net
Proceeds (i) to purchase one or more Healthcare Facilities and/or a controlling
interest in the Capital Stock of a Person owning one or more Healthcare
Facilities, (ii) to make a capital expenditure or to acquire other tangible
assets, in each case, that are used or useful in any business in which the
Company or any of its Restricted Subsidiaries is permitted to be engaged
pursuant to Section 3.13, (iii) to permanently reduce Existing Indebtedness of a
Restricted Subsidiary, or (iv) to permanently reduce Senior Debt (and to
correspondingly reduce commitments with respect thereto). Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the first sentence
of this paragraph will be deemed to constitute "EXCESS PROCEEDS."
When the aggregate amount of Excess Proceeds exceeds $15 million, the
Company will be required to make an offer to all Holders of Securities and
holders of any other Indebtedness of the Company ranking on a parity with the
Securities from time to time outstanding with similar provisions requiring the
Company to make an offer to purchase or to redeem such Indebtedness with the
proceeds from any asset sales, pro rata in proportion to the respective
principal amounts of Securities and such other Indebtedness then outstanding (an
"ASSET SALE OFFER") to purchase the maximum principal amount of the Securities
and such other Indebtedness that may be purchased out of the Excess Proceeds, at
an offer price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon to the date of purchase, in accordance with
the procedures set forth below. To the extent that the aggregate amount of
Securities and such other Indebtedness tendered pursuant to an Asset Sale Offer
is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal
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amount of Securities and such other Indebtedness surrendered by holders thereof
exceeds the amount of Excess Proceeds, the Securities and such other
Indebtedness will be purchased on a pro rata basis. Upon completion of an Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
No later than the date on which the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company shall notify the Trustee of such Asset Sale
Offer and provide the Trustee with an Officers' Certificate setting forth the
calculations used in determining the amount of Net Proceeds to be applied to the
purchase of Securities. The Company shall commence or cause to be commenced the
Asset Sale Offer on a date no later than 10 Business Days after such notice (the
"COMMENCEMENT DATE").
The Asset Sale Offer shall remain open for at least 20 Business Days after
the Commencement Date relating to such Asset Sale Offer and shall remain open
for no more than such 20 Business Days, except to the extent required by
applicable law (as so extended, the "OFFER PERIOD"). No later than two Business
Days after the termina tion of the Offer Period (the "PURCHASE DATE"), the
Company shall purchase the principal amount (the "OFFER AMOUNT") of Securities
required to be purchased in such Asset Sale Offer pursuant to this Section or,
if less than the Offer Amount has been tendered, all Securities tendered in
response to the Asset Sale Offer, in each case for an amount in cash equal to
the Purchase Price.
If the Purchase Date is on or after an interest payment record date and on
or before the related interest payment date, any accrued interest shall be paid
to the Person in whose name a Security is registered at the close of business on
such record date, and no additional interest shall be payable to Holders who
tender Securities pursuant to the Asset Sale Offer.
On the Commencement Date of any Asset Sale Offer, the Company shall send,
or at the Company's request the Trustee shall send, by first class mail, a
notice to each of the Holders at their last registered address, with a copy to
the Trustee and the paying agent, offering to repurchase the Securities held by
such Holder pursuant to the procedure specified in such notice. Such notice,
which shall govern the terms of the Asset Sale Offer, shall contain all
instructions and materials necessary to enable the Holders to tender Securities
pursuant to the Asset Sale Offer and shall state:
(1) that the Asset Sale Offer is being made pursuant to this
Section and the length of time the Asset Sale Offer shall remain open;
(2) the Offer Amount, the Purchase Price and the Purchase Date;
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(3) that any Security not tendered or accepted for payment
shall continue to accrue interest;
(4) that, unless the Company defaults in the payment of the
Purchase Price, any Security accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Security purchased pursuant
to any Asset Sale Offer shall be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Company, a depositary, if
appointed by the Company, or a paying agent at the address specified in
the notice prior to the close of business on the Business Day next
preceding the Purchase Date;
(6) that Holders shall be entitled to withdraw their election if
the Company, depositary or paying agent, as the case may be, receives,
not later than the close of business on the Business Day next preceding
the termination of the Offer Period, a facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the
Security the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the Trustee shall
select the Securities to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Trustee so that only
Securities in denominations of $1,000, or integral multiples thereof,
shall be purchased);
(8) that Holders whose Securities were purchased only in part
shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(9) the circumstances and relevant facts regarding such Asset
Sale and any other information that would be material to a decision as
to whether to tender a Security pursuant to the Asset Sale Offer.
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On the Purchase Date, the Company shall, to the extent lawful, (i) accept
for payment, on a pro rata basis to the extent necessary, an aggregate principal
amount equal to the Offer Amount of Securities tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Securities
or portion thereof so tendered, (ii) deposit with the paying agent an amount
equal to the Purchase Price in respect of all Securities or portions thereof so
tendered and (iii) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate stating the
aggregate principal amount of Securities or portions thereof being purchased by
the Company. The paying agent shall promptly mail to each Holder of Securities
so tendered payment in an amount equal to the Purchase Price for such Securities
and the Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) a new Security to such Holder equal in principal amount to any
unpurchased portion of the Securities surrendered, if any; provided that each
such new Security shall be in a principal amount of $1,000 or an integral
multiple thereof.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of Securities as a result of the Asset Sale Offer.
Section 3.11. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien (except Permitted Liens) on any asset
now owned or hereafter acquired, or any income or profits therefrom or assign or
convey any right to receive income therefrom unless all payments due under the
Indenture and the Securities are secured on an equal and ratable basis (or on a
senior basis, in case of Subordinated Debt) with the Obligations so secured
until such time as such Obligations are no longer secured by a Lien.
Section 3.12. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (i)(a) pay dividends
or make any other distributions to the Company or any of its Restricted
Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest
or participation in, or measured by, its profits, or (b) pay any Indebtedness
owed to the Company or any of its Restricted Subsidiaries, (ii) make loans or
advances to the Company or any of its Restricted Subsidiaries or (iii) transfer
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any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the date of the Indenture,
(b) the Indenture, (c) applicable law or state insurance regulations, (d) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition or in violation of the covenant
described in Section 3.09), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than the Person
(including its Subsidiaries), or the property or assets of the Person (including
its Subsidiaries), so acquired, provided that the Consolidated EBITDA of such
Person is not taken into account in determining whether such acquisition was
permitted by the terms of the Indenture except to the extent that such
Consolidated EBITDA would be permitted to be dividended to the Company without
the prior consent or approval of any third party, (e) any operating lease or
capital lease, insofar as the provisions thereof limit grants of a security
interest in, or other assignments of, the related leasehold interest to any
other Person, (f) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (iii) above on the property so acquired, (g) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced,
or (h) the Credit Agreement and related docu mentation as the same is in effect
on the date of the Indenture and as amended or replaced from time to time,
provided that no such amendment or replacement is more restrictive as to the
matters enumerated above than the Credit Agreement and related documentation as
in effect on the date of the Indenture. Nothing contained in this paragraph
shall prevent the Company or any Restricted Subsidiary from entering into any
agreement resulting in the incurrence of Liens otherwise permitted under the
provisions of Section 3.11.
Section 3.13. Limitation on Line of Business. The Company will not, and
will not permit any of its Restricted Subsidiaries to, engage to any material
extent in any business other than the ownership, operation or management of
Healthcare Facilities, including the acceptance of risk for the provision of
long-term care.
Section 3.14. Limitation on Senior Subordinated Debt. The Company will not
incur, create, issue, assume, Guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Debt and senior in any respect in right of payment to the Securities.
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Section 3.15. Limitation on Transactions with Affiliates. The Company will
not, and will not permit any of its Restricted Subsidiaries to, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or Guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that could have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (a) with respect
to any Affiliate Transaction involving aggregate consideration in excess of $5.0
million, a resolution of the Board of Directors of the Company set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors of the Company
and (b) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $15.0 million, an opinion as to the fairness to the
Company or such Restricted Subsidiary of such Affiliate Transaction from a
financial point of view issued by an investment banking firm of national
standing; provided that (v) transactions or payments pursuant to any employment
arrangements, employee relocations or employee or director benefit plans entered
into by the Company or any of its Restricted Subsidiaries in the ordinary course
of business and consistent with the past practice of the Company or such
Restricted Subsidiary, (w) transactions between or among the Company and/or its
Restricted Subsidiaries, (x) transactions pursuant to or performance of the
Affiliate Agreements on the terms in effect on the date of the Indenture, (y)
transactions between a Person and an Affiliate existing at the time such Person
is merged with or into or becomes a Restricted Subsidiary, except to the extent
such transaction was entered into in connection with, or in contemplation of,
such Person merging with or into or becoming a Restricted Subsidiary and (z)
transactions between the Company or any Restricted Subsidiary and Atria in
accordance with agreements (I) in existence on the date of the Indenture or (II)
entered into after the date of the Indenture on terms no more favorable to Atria
than those in the agreements referred to in (I) above, in each case, shall not
be deemed to be Affiliate Transactions.
Notwithstanding the foregoing, any Investment in Affiliates permitted by the
provisions of Section 3.08 shall not be prohibited by the foregoing limitations
on Affiliate Transactions.
Section 3.16. Limitation on Issuance of Guarantees of Indebtedness by
Restricted Subsidiaries. The Company will not permit any Restricted Subsidiary,
directly or indirectly, to Guarantee or secure the payment of any other
Indebtedness of the Company or any of its Restricted Subsidiaries (except
Indebtedness of a Restricted Subsidiary of such Restricted Subsidiary) unless
such Restricted Subsidiary
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simultaneously executes and delivers a supplemental indenture to the Indenture
providing for the Guarantee of the payment of the Securities by such Restricted
Subsidiary, which Guarantee shall be senior to or pari passu with such
Restricted Subsidiary's Guarantee of or pledge to secure such other
Indebtedness. Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary of the Securities shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon a sale or other
disposition, by way of merger or otherwise, to any Person not an Affiliate of
the Company, of the Company's stock in, or the assets of, such Restricted
Subsidiary, which sale or other disposition results in such Restricted
Subsidiary ceasing to be a Restricted Subsidiary and such sale or other
disposition is made in compliance with, and the Net Proceeds therefrom are
applied in accordance with, the applicable provisions of the Indenture. The form
of such supplemental indenture will be attached as an exhibit to the Indenture.
The foregoing provisions will not be applicable to (i) Guarantees by Restricted
Subsidiaries of the Company's Indebtedness under the Credit Agreement and with
respect to Hedging Obligations related to the Credit Agreement, (ii) Guarantees
by Restricted Subsidiaries of the Company's Guarantee of (x) Atria's bank credit
facility up to an aggregate amount of $100 million through August 26, 1998,
declining to $75 million, $50 million and $25 million in each respective one-
year period thereafter, and (y) Hedging Obligations related to Atria's bank
credit facility for so long as the Company is permitted to Guarantee amounts
under Atria's bank credit facility, (iii) Guarantees of Indebtedness of a Person
by its subsidiaries in effect prior to the time such Person is merged with or
into or became a Restricted Subsidiary, provided that such Guarantees do not
extend to any other Indebtedness of such Person or any other Person and (iv) any
one or more Guarantees of up to $10 million in aggregate principal amount of
Indebtedness of the Company or any Restricted Subsidiary at any time
outstanding.
Section 3.17. Change of Control. Upon the occurrence of a Change of
Control, each Holder of Securities will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Securities pursuant to the offer described below (the "CHANGE OF
CONTROL OFFER") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon to the date of
purchase (the "CHANGE OF CONTROL PAYMENT") on a date that is not more than 90
days after the occurrence of such Change of Control (the "CHANGE OF CONTROL
PAYMENT DATE"). Prior to the mailing of notice to Holders provided for in the
succeeding paragraph, but in any event within 30 days following any Change of
Control, the Company covenants to (i) repay in full all Senior Debt that would
prohibit the repurchase of the Securities as provided for in the succeeding
paragraph or (ii) obtain any requisite consents under instruments governing any
such Senior Debt to permit the repurchase of the Securities as provided for in
the succeeding paragraph. The Company shall first comply with the
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covenant in the preceding sentence before it shall be required to repurchase
Securities pursuant to this Section 3.17.
Within 30 days following any Change of Control, the Company will mail, or at
the Company's request the Trustee will mail, a notice of a Change of Control to
each Holder (at its last registered address with a copy to the Trustee and the
paying agent) offering to repurchase the Securities held by such Holder pursuant
to the procedure specified in such notice. The Change of Control Offer shall
remain open from the time of mailing until the close of business on the Business
Day next preceding the Change of Control Payment Date. The notice, which shall
govern the terms of the Change of Control Offer, shall contain all instructions
and materials necessary to enable the Holders to tender Securities pursuant to
the Change of Control Offer and shall state:
(1) that the Change of Control Offer is being made
pursuant to this Section 3.17 and that all Securities tendered
will be accepted for payment;
(2) the Change of Control Payment and the Change of
Control Payment Date, which date shall be no earlier than 30
days nor later than 60 days from the date such notice is
mailed;
(3) that any Security not tendered will continue to
accrue interest in accordance with the terms of this Indenture;
(4) that, unless the Company defaults in the payment of
the Change of Control Payment, all Securities accepted for
payment pursuant to the Change of Control Offer will cease to
accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased
pursuant to any Change of Control Offer will be required to
surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security
completed, to the Company, a depositary, if appointed by the
Company, or a paying agent at the address specified in the
notice prior to the close of business on the Business Day next
preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Company, depositary or paying agent, as the
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case may be, receives, not later than the close of business on
the Business Day next preceding the Change of Control Payment
Date, a facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Security the Holder
delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are being purchased
only in part will be issued new Securities equal in principal
amount to the unpurchased portion of the Securities
surrendered, which unpurchased portion must be equal to $1,000
in principal amount or an integral multiple thereof; and
(8) the circumstances and relevant facts regarding such
Change of Control (including, but not limited to, information
with respect to pro forma historical financial information
after giving effect to such Change of Control, information
regarding the Person or Persons acquiring control and such
Person's or Persons' business plans going forward) and any
other information that would be material to a decision as to
whether to tender a Security pursuant to the Change of Control
Offer.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Securities or portions thereof properly
tendered and not withdrawn pursuant to the Change of Control Offer, (ii) deposit
with the paying agent an amount equal to the Change of Control Payment in
respect of all Securities or portions thereof so tendered and (iii) deliver or
cause to be delivered to the Trustee the Securities so accepted together with an
Officers' Certificate stating the aggregate principal amount of Securities or
portions thereof being purchased by the Company. The paying agent will promptly
mail to each Holder of Securities so tendered the Change of Control Payment for
such Securities, and the Trustee will promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Security equal in
principal amount to any unpurchased portion of the Securities surrendered, if
any; provided that each such new Security will be in a principal amount of
$1,000 or an integral multiple thereof. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent
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such laws and regulations are applicable in connection with the repurchase of
Securities as a result of a Change of Control.
Section 3.18. Termination of Certain Covenants if Securities Rated Invest
ment Grade. Notwithstanding the foregoing, the Company's obligation to comply
with the provisions of Sections 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15 and
3.16 will terminate if and when the Securities become Investment Grade Rated.
Section 3.19. Reports. (i) So long as any of the Securities remain
outstanding, the Company will furnish to the Holders of Securities within 15
days after the filing thereof with the Commission copies of the annual reports
and of the information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may by rules and regulations
prescribe) that the Company is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. All obligors on the Securities shall
comply with the provisions of the Trust Indenture Act Section 314(a).
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on
an annual and quarterly basis on forms provided for such annual and quarterly
reporting pursuant to rules and regulations promulgated by the Commission, the
Company shall file with the Commission and provide to the Trustee (a) within 90
days after the end of each fiscal year, annual reports on Form 10-K (or any
successor or comparable form) containing the information required to be
contained therein (or required in such successor or comparable form), including
a "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and a report thereon by the Company's certified public accountants;
(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year, reports on Form 10-Q (or any successor or comparable form)
containing the information required to be contained therein (or required in any
successor or comparable form), including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations"; and (c) promptly from time to
time after the occurrence of an event required to be therein reported, such
other reports on Form 8-K (or any successor or comparable form) containing the
information required to be contained therein (or required in any successor or
comparable form); provided, however, that the Company shall not be in default of
the provisions of this Section 3.19(i) for any failure to file reports with the
Commission solely by the refusal of the Commission to accept the same for
filing. Each of the financial statements contained in such reports shall be
prepared in accordance with GAAP.
(ii) The Trustee, at the Company's expense, shall promptly mail
copies of all such annual reports, information, documents and other reports
provided to the Trustee pursuant to Section 3.19(i) hereof to the Holders
at
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their addresses appearing in the register of Securities maintained by
the Registrar.
(iii) Whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability and make such information
available to securities analysts and prospective investors upon request.
(iv) The Company shall provide the Trustee with a sufficient number
of copies of all reports and other documents and information that the Trustee
may be required to deliver to the Holders under this Section 3.19.
(v) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 3.20. Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not (i) at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law that would
prohibit or forgive the Company from paying all or any portion of the principal
of or interest on the Securities as contemplated herein, wherever enacted, now
or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company will expressly waive all benefit
or advantage of any such law and (ii) hinder, delay or impede the execution of
any power granted to the Trustee under this Indenture and will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE 4
Remedies of the Trustee and Holders on Event of Default
Section 4.01. Events of Default. Each of the following constitutes an "EVENT
OF DEFAULT":
(i) default for 30 days in the payment when due of interest on the
Securities (whether or not prohibited by the provisions described in Article
9);
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(ii) default in payment when due of the principal of or premium, if
any, on the Securities (whether or not prohibited by the provisions described
in Article 9);
(iii) failure by the Company to comply with the provisions of
Sections 3.08, 3.09, 3.10, or 3.17 hereof;
(iv) failure by the Company to comply with any other covenant or
agreement in the Indenture or the Securities;
(v) any default that occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the Company or any of its
Significant Subsidiaries (or the payment of which is Guaranteed by the
Company or any of its Significant Subsidiaries), whether such Indebtedness or
Guarantee exists on the date hereof or is created after the date hereof,
which default (a) constitutes a Payment Default or (b) results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or that has been so accelerated, aggregates $25.0 million or
more;
(vi) failure by the Company or any of its Significant Subsidiaries
to pay a final judgment or final judgments aggregating in excess of $25.0
million entered by a court or courts of competent jurisdiction against the
Company or any of its Significant Subsidiaries if such final judgment or
judgments remain unpaid or undischarged for a period (during which execution
shall not be effectively stayed) of 60 days after their entry;
(vii) the Company or any Significant Subsidiary thereof pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case in which it is the debtor,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
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(E) admits in writing its inability generally to pay its debts
as the same become due; and
(viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary thereof in an involuntary case in which it is the debtor,
(B) appoints a Custodian of the Company or any Significant
Subsidiary thereof or for all or substantially all of the property of
the Company or any Significant Subsidiary thereof, or
(C) orders the liquidation of the Company or any Significant
Subsidiary thereof,
and the order or decree remains unstayed and in effect for 60 days.
The term "BANKRUPTCY LAW" means title 11, U.S. Code or any similar federal or
state law for the relief of debtors. The term "CUSTODIAN" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A Default under clause (iv) is not an Event of Default until the Trustee
notifies the Company in writing, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities notify the Company and the
Trustee in writing, of the Default and the Company does not cure the Default
within 30 days after receipt of such notice. The written notice must specify
the Default, demand that it be remedied and state that the notice is a "NOTICE
OF DEFAULT."
Section 4.02. Acceleration. If any Event of Default (other than an Event of
Default specified in clause (vii) or (viii) of Section 4.01 hereof) occurs and
is continuing, the Trustee by notice to the Company, or the Holders of at least
25% in aggregate principal amount of the then outstanding Securities by written
notice to the Company and the Trustee, may declare the unpaid principal of,
premium, if any, and any accrued and unpaid interest on all the Securities to be
due and payable immediately; provided that for so long as the Credit Agreement
is in effect, such declaration shall not become effective until the earlier of
(i) five Business Days after receipt of the written notice declaring the
Securities to be due and payable immediately by the Administrative Agent and the
Documentation Agent under the Credit Agreement or (ii) acceleration of the
Indebtedness under the Credit Agreement. Except as set forth above, upon such
declaration the principal of, premium, if any, and
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interest shall be due and payable immediately. If an Event of Default specified
in clause (vii) or (viii) of Section 4.01 hereof occurs with respect to the
Company or any Significant Subsidiary thereof, the unpaid principal of, premium,
if any, and any accrued and unpaid interest on all the Securities shall ipso
facto become and be immediately due and payable without further action or notice
on the part of the Trustee or any Holder.
Section 4.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal or interest on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the
Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquies cence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 4.04. Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Securities then outstanding by
written notice to the Trustee may on behalf of the Holders of all of the
Securities waive any existing Default or Event of Default and its consequences
under this Indenture except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on any Security. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 4.05. Control by Majority. Holders of a majority in aggregate
principal amount of the then outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture that
the Trustee determines may be unduly prejudicial to the rights of other Holders
or that may involve the Trustee in personal liability. The Trustee may take any
other action which it deems proper which is not inconsistent with any such
direction.
Section 4.06. Limitation on Suits. A Holder may pursue a remedy with respect
to this Indenture or the Securities only if:
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(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of the
then outstanding Securities make a written request to the Trustee to pursue
the remedy;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(v) during such 60-day period the Holders of a majority in aggregate
principal amount of the then outstanding Securities do not give the Trustee a
direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder
or to obtain a preference or priority over another Holder.
Section 4.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal, premium, if any, and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
Section 4.08. Collection Suit by Trustee. If an Event of Default specified
in Section 4.01(i) or (ii) hereof occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor for the whole amount of
principal, premium, if any, and interest remaining unpaid on the Securities and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover amounts due the Trustee under
Section 5.07 hereof, including the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
Section 4.09. Trustee May File Proofs of Claim. The Trustee is authorized to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Securities), its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 5.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 5.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties which the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 4.10. Priorities. If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 5.07, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts due and unpaid on the Securities for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal, premium, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction
shall direct.
The Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 4.10 upon five Business Days prior notice to the
Company.
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Section 4.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 4.07 hereof, or a
suit by Holders of more than 10% in aggregate principal amount of the then
outstanding Securities.
ARTICLE 5
Concerning the Trustee
Section 5.01. Duties and Responsibilities of the Trustee; During Default;
Prior to Default. The Trustee, prior to the occurrence of an Event of Default
and after the curing or waiving of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived) the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default of which the Trustee has
actual notice and after the curing or waiving of all such Events of Default
which may have occurred:
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of
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the opinions expressed therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such statements, certificates or opinions
which by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
holders of not less than a majority in principal amount of the Securities at the
time outstanding relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of its rights
or powers, if there shall be reasonable ground for believing that the repayment
of such funds or adequate indemnity against such liability is not reasonably
assured to it.
This Section 5.01 is in furtherance of and subject to Sections 315 and 316 of
the Trust Indenture Act of 1939.
Section 5.02. Certain Rights of the Trustee. In furtherance of and subject
to the Trust Indenture Act of 1939, and subject to Section 5.01:
(a) the Trustee may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Company;
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(c) the Trustee may consult with counsel of its selection and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized or within the discretion, rights
or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder, of which the
Trustee has actual notice, and after the curing or waiving of all Events of
Default, the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless requested
in writing so to do by the holders of not less than a majority in aggregate
principal amount of the Securities then outstanding; provided that, if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such examination shall be paid by
the Company or, if paid by the Trustee or any predecessor trustee, shall be
repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys not
regularly in its employ and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney appointed
with due care by it hereunder; and
(h) The Trustee shall not be deemed to have notice of any Default or Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
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Section 5.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of any of the Securities or of the proceeds thereof.
Section 5.04. Trustee and Agents May Hold Securities; Collections, etc. The
Trustee or any agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and may otherwise
deal with the Company and receive, collect, hold and retain collections from the
Company with the same rights it would have if it were not the Trustee or such
agent.
Section 5.05. Moneys Held by Trustee. Subject to the provisions of Section
11.06 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Company or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.
Section 5.06. Notice of Default. If any Default or any Event of Default
occurs and is continuing and if such Default or Event of Default is actually
known to a responsible officer of the Trustee, the Trustee shall mail to each
Holder in the manner and to the extent provided in Trust Indenture Act Section
313(c) notice of the Default or Event of Default within 45 days after it occurs,
unless such Default or Event of Default has been cured; provided, however, that,
except in the case of a default in the payment of the principal of, premium, if
any, or interest on any Security, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interest of
the Holders.
Section 5.07. Compensation and Indemnification of Trustee and Its Prior
Claim. The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as shall be agreed
in writing between the Company and the Trustee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust) and the Company covenants and agrees to pay or reimburse the Trustee and
each predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or
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made by or on behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against, any
and all loss, liability, damage, claim or expense, including taxes (other than
taxes based on the income of the Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim of liability in the premises. The obligations of the
Company under this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture. Such additional indebtedness shall be a senior claim to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Securities, and the Securities are hereby subordinated to such senior claim.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 4.01(vii) or Section 4.01(viii), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
Section 5.08. Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 5.01 and 5.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
Section 5.09. Persons Eligible for Appointment as Trustee. The Trustee
hereunder shall at all times be a corporation having a combined capital and
surplus of at least $100,000,000, and which is eligible in accordance with the
provisions of Section 310(a) of the Trust Indenture Act of 1939. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of a
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Federal, State or District of Columbia supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
Section 5.10. Resignation and Removal; Appointment of Successor Trustee. (a)
The Trustee may at any time resign by giving written notice of resignation to
the Company. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument in duplicate,
executed by authority of the Board of Directors, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the
resigning trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide holder of a Security or Securities for
at least six months may, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act of 1939, after written request therefor by
the Company or by any Securityholder who has been a bona fide holder of a
Security or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 5.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to Section 315(e) of the Trust Indenture Act of 1939, any Securityholder
who has been a bona fide holder of
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a Security or Securities for at least six months may on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee and
appoint a successor trustee by delivering to the Trustee so removed, to the
successor trustee so appointed and to the Company the evidence provided for in
Section 6.01 of the action in that regard taken by the Securityholders.
If no successor trustee shall have been so appointed and have accepted
appointment 30 days after the mailing of such notice of removal, the trustee
being removed may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 5.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 5.11.
Section 5.11. Acceptance of Appointment by Successor Trustee. Any successor
trustee appointed as provided in Section 5.10 shall execute and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, upon payment of its charges then unpaid,
the trustee ceasing to act shall, subject to Section 11.06, pay over to the
successor trustee all moneys at the time held by it hereunder and shall execute
and deliver an instrument transferring to such successor trustee all such
rights, powers, duties and obligations. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 5.07.
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Upon acceptance of appointment by a successor trustee as provided in this
Section 5.11, the Company shall mail notice thereof by first-class mail to the
holders of Securities at their last addresses as they shall appear in the
Security register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 5.10.
If the Company fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
Section 5.12. Merger, Conversion, Consolidation or Succession to Business of
Trustee. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or to which the Trustee's assets may be sold,
or any corporation resulting from any merger, conversion, consolidation or sale
to which the Trustee shall be a party or by which the Trustee's property may be
bound, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
5.09, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time such successor to the Trustee shall succeed to the trusts
created by this Indenture any of the Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor Trustee and deliver such Securities so
authenticated; and, in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor Trustee; and in all such cases such certificate shall have the full
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have; provided, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
Section 5.13. Preferential Collection of Claims. Reference is made to
Section 311 of the Trust Indenture Act. For purposes of Section 311(b) (4) and
(6) of such Act, the following terms shall mean:
(a) "CASH TRANSACTION" means any transaction in which full payment for goods
or securities sold is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon banks or bankers
and payable upon demand; and
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(b) "SELF-LIQUIDATING PAPER" means any draft, bill of exchange, acceptance
or obligation which is made, drawn, negotiated or incurred by the Company for
the purpose of financing the purchase, processing, manufacturing, shipment,
storage or sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation.
ARTICLE 6
Concerning the Holders
Section 6.01. Evidence of Action Taken by Holders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders in person or by agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
5.01 and 5.02) conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Article.
Section 6.02. Proof of Execution of Instruments and of Holding of
Securities; Record Date. Subject to Sections 5.01 and 5.02, the execution of any
instrument by a Securityholder or his agent or proxy may be proved in accordance
with such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee. The holding of
Securities shall be proved by the Security register or by a certificate of the
Registrar thereof. The Company may set a record date for purposes of determining
the identity of holders of Securities entitled to vote or consent to any action
referred to in Section 6.01, which record date may be set at any time or from
time to time by notice to the Trustee, for any date or dates (in the case of any
adjournment or resolicitation) not more than 60 days nor less than five days
prior to the proposed date of such vote or consent, and thereafter,
notwithstanding any other provisions hereof, only holders of Securities of
record on such record date shall be entitled to so vote or give such consent or
to withdraw such vote or consent.
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Section 6.03. Securities Owned by Company Deemed Not Outstanding. In
determining whether the holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Company or any other obligor on the
Securities or by any person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any other obligor
on the Securities shall be disregarded and deemed not to be outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, consent
or waiver only Securities which the Trustee actually knows are so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance with
such advice. Upon request of the Trustee, the Company shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Company to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 5.01 and
5.02, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are outstanding for the purpose of any such
determination.
Section 6.04. Right of Revocation of Action Taken. At any time prior to (but
not after) the evidencing to the Trustee, as provided in Section 6.01, of the
taking of any action by the holders of the percentage in aggregate principal
amount of the Securities specified in this Indenture in connection with such
action, any holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities the Holders
of which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Security. Except as aforesaid any
such action taken by the holder of any Security shall be conclusive and binding
upon such holder and upon all future holders and owners of such Security and of
any Securities issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the holders of the percentage in aggregate principal amount
of the Securities specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and the holders of
all the Securities.
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ARTICLE 7
Supplemental Indentures
Section 7.01. Supplemental Indentures Without Consent of Holders. The
Company and the Trustee may amend or supplement this Indenture or the Securities
without the consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(iii) to provide for any supplemental indenture required pursuant to
Section 3.16 hereof;
(iv) to provide for the assumption of the Company's obligations to
the Holders of the Securities in the case of a merger, consolidation or
sale of assets pursuant to Article 8 hereof;
(v) to make any change that would provide any additional rights or
benefits to the Holders of the Securities or that does not adversely affect
the legal rights hereunder of any such Holder; or
(vi) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture
Act.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such supplemental indenture, and upon
receipt by the Trustee of the documents described in Section 7.04 hereof, the
Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations which may be therein contained,
but the Trustee shall not be obligated to enter into such supplemental indenture
which affects its own rights, duties or immunities under this Indenture or
otherwise.
Section 7.02. With Consent of Holders. Except as provided in the next
succeeding paragraphs, this Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the Securities then outstanding (including consents obtained
in connection with a tender offer or exchange offer for such Securities), and
any existing default or compliance with any provision of this Indenture or the
Securities may be waived with the consent of the Holders of a majority in
aggregate principal amount
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of the then outstanding Securities (including consents obtained in connection
with a tender offer or exchange offer for such Securities).
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 7.04 hereof, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section
7.02 to approve the particular form of any proposed amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
Subject to Sections 4.04 and 4.07 hereof, the Holders of a majority in aggregate
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities. Without the consent of each Holder affected, however, an amendment
or waiver may not (with respect to any Security held by a non-consenting
Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Security (other than provisions relating to the covenants described under
3.10 and 3.17);
(iii) reduce the rate of or change the time for payment of interest on
any Security;
(iv) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate
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principal amount thereof and a waiver of the payment default that resulted
from such acceleration);
(v) make any Security payable in money other than that stated in
the Securities;
(vi) make any change in Section 4.04 or 4.07 hereof;
(vii) waive a redemption payment with respect to any Security (other
than a payment described by Section 3.10 or 3.17);
(viii) modify the ranking or priority of the Securities or modify the
definition of Senior Debt or Designated Senior Debt or amend or modify
Article 9 in any manner adverse to the Holders; or
(ix) make any change in this sentence of this Section 7.02.
Section 7.03. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Securities
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 7.04. Documents to Be Given to Trustee; Compliance with TIA. The
Trustee, subject to the provisions of Sections 5.01 and 5.02, may receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
such supplemental indenture complies with the applicable provisions of this
Indenture. Every such supplemental indenture shall comply with the TIA.
Section 7.05. Notation on Securities in Respect of Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article may bear a notation
approved by the Trustee as to form (but not as to substance) as to any matter
provided for by such supplemental indenture or as to any action taken at any
such meeting. If the Company or the Trustee shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the
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Company, authenticated by the Trustee and delivered in exchange for the
Securities then outstanding.
ARTICLE 8
Consolidation, Merger or Sale of Assets
Section 8.01. When Issuer May Merge, Etc. The Company will not consolidate
or merge with or into (whether or not the Company is the surviving corporation),
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another corporation, Person or entity unless (i) the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (the "Surviving Entity") is a corporation organized or existing under the
laws of the United States, any state thereof or the District of Columbia; (ii)
the Surviving Entity assumes all the obligations of the Company under the
Securities and the Indenture pursuant to a supplemental Indenture in form
reasonably satisfactory to the Trustee; (iii) immediately before and after
giving effect to such transaction and treating any Indebtedness which becomes an
obligation of the Company as a result of such transaction as having been
incurred by the Company at the time of the transaction, no Default or Event of
Default shall have occurred and be continuing; and (iv) the Company or the
Surviving Entity (A) will have Consolidated Net Worth immediately after the
transaction and prior to any purchase accounting adjustments equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the
transaction and (B) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 3.09.
Section 8.02. Successor Corporation Substituted. Upon any consolidation or
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 8.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "COMPANY" shall
refer instead to the successor corporation), and may exercise every
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right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein.
Section 8.03. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 5.01 and 5.02, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, conveyance, sale,
transfer, lease, exchange or other disposition complies with the applicable
provisions of this Indenture.
ARTICLE 9
Subordination
Section 9.01. Agreement to Subordinate. The Company agrees, and each Holder
by accepting a Security agrees, any provision of this Indenture or the
Securities to the contrary notwithstanding, that all Obligations owed under and
in respect of the Securities are subordinated in right of payment, to the extent
and in the manner provided in this Article 9, to the prior payment in full in
cash of all Obligations owed under and in respect of all Senior Debt of the
Company, and that the subordination of the Securities pursuant to this Article
9 is for the benefit of all holders of all Senior Debt of the Company, whether
outstanding on the Closing Date or incurred thereafter.
Section 9.02. Liquidation; Dissolution; Bankruptcy. (a) Upon any
distribution of cash, securities or other property of the Company to creditors
upon any Insolvency or Liquidation Proceeding with respect to the Company, the
holders of any Senior Debt of the Company will be entitled to receive payment in
full, in cash or Cash Equivalents, of all Obligations due in respect of such
Senior Debt (including Post-Petition Interest and, in the case of all Designated
Senior Debt, all Obligations with respect thereto) before the Holders will be
entitled to receive any payment or distribution with respect to the Securities
(including payment for the repurchase of Securities upon a Change of Control),
and until all Obligations with respect to such Senior Debt of the Company are
paid in full, in cash or Cash Equivalents, any payment or distribution to which
the Holders would be entitled shall be made to the holders of the Company's
Senior Debt on a pro rata basis (except payments made from the trust described
in Section 11.04 and except that Holders of the Securities may receive
Reorganization Securities).
Upon any Insolvency or Liquidation Proceeding with respect to the Company,
any payment or distribution of assets of the Company of any kind or character,
whether in cash, securities or other property, to which the Holders or the
Trustee would be entitled except for the provisions of this Indenture shall be
paid by the
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Company, any paying agent or other Person making such payment or distribution,
or by the Holders or by the Trustee if received by them, directly to the holders
of the Company's Senior Debt (pro rata to such holders on the basis of the
amounts of the Obligations due in respect of the Senior Debt held by them) or
their representatives, as their interests may appear, for application to the
payment of all Obligations due in respect of such Senior Debt (including Post-
Petition Interest and, in the case of all Designated Senior Debt, all
Obligations with respect thereto) until all such Obligations have been paid in
full in cash, after giving effect to all other payments or distributions to, or
provisions made for, holders of the Company's Senior Debt.
(b) A distribution may consist of cash, securities or other property, by
set-off or otherwise. For purposes of this Article 9, the words "cash,
securities or other property" shall not include any distribution of securities
of the Company or any other corporation provided for in any reorganization
proceeding under any Bankruptcy Law if (i) such securities constitute
Reorganization Securities, (ii) such distribution was authorized by an order or
decree of a court of competent jurisdiction, and (iii) such order gives effect
to (and states in such order or decree that effect has been given to) the
subordination of such securities to all Senior Debt of the Company not paid in
full in connection with such reorganization; provided that (a) all such Senior
Debt is assumed by the reorganized corporation, and (b) the rights of the
holders of any such Senior Debt are not, without the consent of such holders,
altered by such reorganization, which consent shall be deemed to have been given
if the holders of such Senior Debt (or their representative), individually or as
a class, shall have approved such reorganization.
(c) Notwithstanding anything to the contrary in Section 9.02, Holders of
Securities may continue to receive payments from the trust established pursuant
to Section 11.04.
Section 9.0. Default on Designated Senior Debt. The Company also may not
make any payment upon or in respect of the Securities (except in such
subordinated securities as described in Section 9.02(b) or from the trust
established pursuant to Section 11.04) if (i) a default in the payment of the
principal of, premium, if any, or interest on Designated Senior Debt occurs and
is continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Debt that permits
holders of the Designated Senior Debt as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default (a
"PAYMENT BLOCKAGE NOTICE") from the Company or any Representative of any
Designated Senior Debt. Payments on the Securities may and will be resumed and
all past due amounts on the Securities shall be paid (a) in the case of a
payment default, upon the date on which such default is cured or waived and (b)
in case of a nonpayment default, upon the earlier of (1) the date on which such
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nonpayment default is cured or waived or (2) 179 days after the date on which
the applicable Payment Blockage Notice is received, in each case, unless the
maturity of any Designated Senior Debt has been accelerated and the Company has
defaulted with respect to the payment of such Designated Senior Debt. No new
period of payment blockage may be commenced unless and until 360 days have
elapsed since the effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date any
Payment Blockage Notice was given shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
Section 9.04. When Distributions Must Be Paid Over. If the Company shall
make any payment to the Trustee on account of the principal of, or premium, if
any, or interest on, the Securities, or any other Obligation in respect of the
Securities, or the Holders shall receive from any source any payment on account
of the principal of, premium, if any, or interest on, the Securities or any
Obligation in respect of the Securities, at a time when such payment is
prohibited by this Article 9, the Trustee or such Holders shall hold such
payment in trust for the benefit of, and shall pay over and deliver to, the
holders of the Company's Senior Debt (pro rata as to each of such holders on the
basis of the respective amounts of such Senior Debt held by them) or their
representative, as their respective interests may appear, for application to the
payment of all outstanding Senior Debt of the Company until all such Senior Debt
has been paid in full in cash, after giving effect to all other payments or
distributions to, or provisions made for, the holders of the Company's Senior
Debt.
With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform only such obligations on its part as are specifically set
forth in this Article 9, and no implied covenants or obligations with respect
to any holders of the Company's Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of the Company's Senior Debt, and shall not be liable to any
holders of such Senior Debt if the Trustee shall pay over or distribute to, or
on behalf of, Holders or the Company or any other Person, money or assets to
which any holders of such Senior Debt are entitled pursuant to this Article 9,
except if such payment is made at a time when a Trust Officer has actual
knowledge that the terms of this Article 9 prohibit such payment.
Section 9.05. Notice. Neither the Trustee nor the paying agent shall at any
time be charged with the knowledge of the existence of any facts that would
prohibit the making of any payment to or by the Trustee or paying agent under
this Article 9 unless and until the Trustee or paying agent shall have received
written notice thereof from the Company or one or more holders of the Company's
Senior Debt or a Representative of any holders of such Senior Debt; and, prior
to the receipt of any such written notice, the Trustee or paying agent shall be
entitled to assume
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conclusively that no such facts exist. The Trustee shall be entitled to rely on
the delivery to it of written notice by a Person representing itself to be a
holder of the Company's Senior Debt (or a Representative thereof) to establish
that such notice has been given.
The Company shall promptly notify the Trustee and the paying agent in writing
of any facts it knows that would cause a payment of principal of, premium, if
any, or interest on, the Securities or any other Obligation in respect of the
Securities to violate this Article 9, but failure to give such notice shall not
affect the subordination of the Securities to the Senior Debt of the Company
provided in this Article 9 or the rights of holders of such Senior Debt under
this Article 9.
Section 9.06. Subrogation. After all Senior Debt of the Company has been
paid in full in cash and until the Securities are paid in full, Holders shall be
subrogated (equally and ratably with all other Indebtedness pari-passu with the
Securities) to the rights of holders of such Senior Debt to receive
distributions applicable to such Senior Debt to the extent that distributions
otherwise payable to the Holders have been applied to the payment of such Senior
Debt. A distribution made under this Article 9 to holders of the Company's
Senior Debt that otherwise would have been made to Holders is not, as between
the Company and Holders, a payment by the Company on its Senior Debt.
Section 9.07. Relative Rights. This Article 9 defines the relative rights
of Holders and holders of the Company's Senior Debt. Nothing in this Indenture
shall: (1) impair, as between the Company and Holders, the Company's
Obligations, which are absolute and unconditional, to pay principal of, premium,
if any, and interest on the Securities in accordance with their terms; (2)
affect the relative rights of Holders and the Company's creditors other than
their rights in relation to holders of the Company's Senior Debt; or (3) prevent
the Trustee or any Holder from exercising its available remedies upon a Default
or Event of Default, subject to the rights of holders of the Company's Senior
Debt to receive distributions and payments otherwise payable to Holders.
The failure to make a payment on account of principal of or interest on the
Securities by reason of any provision of this Article 9 shall not be construed
as preventing the occurrence of an Event of Default under Section 4.01.
Section 9.08. The Company and Holders May Not Impair Subordination. (a) No
right of any holder of the Company's Senior Debt to enforce the subordination as
provided in this Article 9 shall at any time or in any way be prejudiced or
impaired by any act or failure to act by the Company or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture or the
Securities or any other agreement regardless of any knowledge thereof with which
any such holder may have or be otherwise charged.
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(b) Without in any way limiting Section 9.08(a), the holders of any Senior
Debt of the Company may, at any time and from time to time to the extent not
otherwise prohibited by this Indenture, without the consent of or notice to any
Holders, without incurring any liabilities to any Holder and without impairing
or releasing the subordination and other benefits provided in this Indenture or
the Holders' obligations to the holders of such Senior Debt, even if any
Holder's right of reimbursement or subrogation or other right or remedy is
affected, impaired or extinguished thereby, do any one or more of the following:
(i) amend, renew, exchange, extend, modify, increase or supplement in any manner
such Senior Debt or any instrument evidencing or guaranteeing or securing such
Senior Debt or any agreement under which such Senior Debt is outstanding
(including, but not limited to, changing the manner, place or terms of payment
or changing or extending the time of payment of, or renewing, exchanging,
amending, increasing or altering, (1) the terms of such Senior Debt, (2) any
security for, or any Guarantee of, such Senior Debt, (3) any liability of any
obligor on such Senior Debt (including any guarantor) or any liability incurred
in respect of such Senior Debt) (ii) sell, exchange, release, surrender, realize
upon, enforce or otherwise deal with in any manner and in any order any property
pledged, mortgaged or otherwise securing such Senior Debt or any liability of
any obligor thereon, to such holder, or any liability incurred in respect
thereof; (iii) settle or compromise any such Senior Debt or any other liability
of any obligor of such Senior Debt to such holder or any security therefor or
any liability incurred in respect thereof and apply any sums by whomsoever paid
and however realized to any liability (including, without limitation, payment of
any of the Company's Senior Debt) in any manner or order; and (iv) fail to take
or to record or otherwise perfect, for any reason or for no reason, any lien or
security interest securing such Senior Debt by whomsoever granted, exercise or
delay in or refrain from exercising any right or remedy against any obligor or
any guarantor or any other Person, elect any remedy and otherwise deal freely
with any obligor and any security for such Senior Debt or any liability of any
obligor to the holders of such Senior Debt or any liability incurred in respect
of such Senior Debt.
(c) Each Holder by accepting a Security agrees not to compromise, release,
forgive or otherwise discharge the Company's Obligations with respect to such
Holder's Security unless holders of a majority of the outstanding amount of each
class of Senior Debt consent to such compromise, release, forgiveness or
discharge.
Section 9.09. Distribution or Notice to Representative. Whenever a
distribution is to be made, or a notice given, to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative,
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if any. If any payment or distribution of the Company's assets is required to be
made to holders of any of the Company's Senior Debt pursuant to this Article 9,
the Trustee and the Holders shall be entitled to rely upon any order or decree
of any court of competent jurisdiction, or upon any certificate of a
Representative of such Senior Debt or a Custodian, in ascertaining the holders
of such Senior Debt entitled to participate in any such payment or distribution,
the amount to be paid or distributed to holders of such Senior Debt and all
other facts pertinent to such payment or distribution or to this Article 9.
Section 9.10. Rights of Trustee and Paying Agent. The Trustee or paying
agent may continue to make payments on the Securities unless prior to any
payment date it has received written notice of facts that would cause a payment
of principal of, or premium, if any, or interest on, the Securities to violate
this Article 9. Only the Company, a representative of Senior Debt, or a holder
of Senior Debt that has no representative may give such notice.
To the extent permitted by the TIA, the Trustee in its individual or any
other capacity may hold Indebtedness of the Company (including Senior Debt) with
the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights.
Nothing in this Article 9 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 5.07.
Section 9.11. Authorization to Effect Subordination. Each Holder of a
Security by its acceptance thereof authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 9, and appoints the Trustee as such
Holder's attorney-in-fact for any and all such purposes (including, without
limitation, the timely filing of a claim for the unpaid balance of the Security
that such Holder holds in the form required in any Insolvency or Liquidation
Proceeding and causing such claim to be approved).
If a proper claim or proof of debt in the form required in such proceeding is
not filed by or on behalf of all Holders prior to 30 days before the expiration
of the time to file such claims or proofs, then the holders or a representative
of any Senior Debt of the Company are hereby authorized, and shall have the
right (without any duty), to file an appropriate claim for and on behalf of the
Holders.
Section 9.12. Payment. A payment on account of or with respect to any
Security shall include, without limitation, any Additional Interest or, in the
case of any payment after July 15, 2002, principal, premium or interest with
respect to or in
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connection with any optional redemption or purchase provisions, any direct or
indirect payment payable by reason of any other Indebtedness or Obligation being
subordinated to the Securities, and any direct or indirect payment or recovery
on any claim as a Holder relating to or arising out of this Indenture or any
Security, or the issuance of any Security, or the transactions contemplated by
this Indenture or referred to herein.
ARTICLE 10
Redemption of Securities
Section 10.01. Right of Optional Redemption; Prices. On or after July 15,
2002, the Company at its option may, at any time, redeem all, or from time to
time any part of, the Securities upon payment of the optional redemption prices
set forth in the form of Security hereinabove recited, together with accrued and
unpaid interest to the date fixed for redemption.
Section 10.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the holders of Securities to be redeemed as a whole or in part
shall be given by mailing notice of such redemption by first class mail, postage
prepaid, at least 30 days and not more than 60 days prior to the date fixed for
redemption to such holders of Securities at their last addresses as they shall
appear upon the registry books. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
The notice of redemption to each such Holder shall identify the Securities to
be redeemed (including CUSIP numbers) and shall specify the principal amount of
each Security held by such Holder to be redeemed, the date fixed for redemption,
the redemption price, the place or places of payment, that payment will be made
upon presentation and surrender of such Securities, that interest accrued to the
date fixed for redemption will be paid as specified in said notice and that on
and after said date interest thereon or on the portions thereof to be redeemed
will cease to accrue. In case any Security is to be redeemed in part only the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion thereof will be issued.
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The notice of redemption of Securities to be redeemed at the option of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
No later than 10:00 a.m. on the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.04) an amount of money sufficient to redeem on the redemption date all the
Securities so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption. The Company
will deliver to the Trustee at least 70 days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal amount of
Securities to be redeemed.
If less than all the Securities are to be redeemed, the Trustee shall select,
either pro rata, by lot or by any other method it shall deem fair and
reasonable, Securities to be redeemed in whole or in part. Securities may be
redeemed in part in multiples of $1,000 only. The Trustee shall promptly notify
the Company in writing of the Securities selected for redemption and, in the
case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
Section 10.03. Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Company shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue and, except as provided in Sections 5.05 and 11.06, such Securities shall
cease from and after the date fixed for redemption to be entitled to any benefit
or security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
said Securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that any semi-annual payment
of interest becoming due on the date fixed for redemption shall be payable to
the holders of such Securities registered as such on the relevant Interest
Record Date subject to the terms and provisions of Section 2.04 hereof.
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If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate borne by the
Security.
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to or
on the order of the Holder thereof, at the expense of the Company, a new
Security or Securities, of authorized denominations, in principal amount equal
to the unredeemed portion of the Security so presented.
Section 10.04. Exclusion of Certain Securities from Eligibility for Selection
for Redemption. Securities shall be excluded from eligibility for selection for
redemption if they are identified by registration and certificate number in a
written statement signed by an authorized officer of the Company and delivered
to the Trustee at least 40 days prior to the last date on which notice of
redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Company or (b) an entity specifically
identified in such written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
ARTICLE 11
Defeasance and Covenant Defeasance
Section 11.01. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may at its option by resolution of the Board of Directors, at any
time, elect to have either Section 11.02 or Section 11.03 applied to the
outstanding Securities upon compliance with the conditions set forth below in
this Article Twelve.
Section 11.02. Legal Defeasance and Discharge. Upon the Company's exercise
under Section 11.01 hereof of the option applicable to this Section 11.02, the
Company shall be deemed to have been discharged from its Obligations with
respect to all outstanding Securities on the date the conditions set forth below
are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 11.05
hereof and the other Sections
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of this Indenture referred to in clauses (i) and (ii) of this Section 11.02, and
to have satisfied all its other obligations under such Securities and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 11.04 hereof, and as
more fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest on such Securities when such payments are due,
(ii) the Company's obligations with respect to such Securities under Sections
2.01, 2.02, 2.05, 2.06, 2.07, 2.08, 2.09, 2.11, 3.01, 3.04 and 11.05 hereof,
(iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee's rights under Section
5.07 hereof, and the Company's obligations in connection therewith and with this
Article 11. Subject to compliance with this Article 11, the Company may
exercise its option under this Section 11.02 notwithstanding the prior exercise
of its option under Section 11.03 hereof with respect to the Securities.
Section 11.03. Covenant Defeasance. Upon the Company's exercise under Section
11.01 hereof of the option applicable to this Section 11.03, the Company shall
be released from its obligations under the covenants contained in Sections 3.08
through 3.17 and clause (iv) of Section 8.01 hereof with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Securities shall
thereafter be deemed not outstanding for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed outstanding
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 4.01(iii) or (iv) hereof, but, except as specified
above, the remainder of this Indenture and such Securities shall be unaffected
thereby. In addition, upon the Company's exercise under Section 11.01 hereof of
the option applicable to this Section 11.03, Sections 4.01(v) and 4.01(vi)
hereof shall not constitute Events of Default.
Section 11.04. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to application of either Section 11.02 or Section 11.03
hereof to the outstanding Securities:
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(i) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section
5.10 who shall agree to comply with the provisions of this Article 11
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities, (a) cash in U.S.
Dollars in an amount, or (b) non-callable Government Securities that through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, cash in U.S. Dollars in an amount, or (c) a
combination thereof, in such amounts as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge
and which shall be applied by the Trustee (or other qualifying trustee) to
pay and discharge the principal of, premium, if any, and interest on such
outstanding Securities on the stated maturity date of such principal or
installment of principal, premium, if any, or interest.
(ii) In the case of an election under Section 11.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming that (a)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (b) since the date hereof, there has been a
change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Securities will not recognize income, gain or loss
for Federal income tax purposes as a result of such Legal Defeasance and will
be subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had
not occurred.
(iii) In the case of an election under Section 11.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding Securities will not recognize income, gain or loss
for Federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance
had not occurred.
(iv) No Default or Event of Default with respect to the Securities shall
have occurred and be continuing on the date of such deposit or, insofar as
Section 4.01(vii) or 4.01(viii) hereof is concerned, at any time in the
period ending on the 91st day after the date of such deposit (it being
understood that
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this condition shall not be deemed satisfied until the expiration of such
period).
(v) Such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound (other than a breach, violation or default resulting
from the borrowing of funds to be applied to such deposit).
(vi) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
(vii) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Company pursuant to its
election under Section 11.02 or 11.03 hereof was not made by the Company
with the intent of preferring the Holders of the Securities over the other
creditors of the Company with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others.
(viii) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under
Section 11.02 hereof or the Covenant Defeasance under Section 11.03 hereof
(as the case may be) have been complied with as contemplated by this
Section 11.04.
Section 11.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 11.06 hereof, all
money and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee pursuant to Section 11.04 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any paying agent (including the Company
acting as paying agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal of,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities
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deposited pursuant to Section 11.04 hereof or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Securities.
Anything in this Article 11 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the Company's request
any money or non-callable Government Securities held by it as provided in
Section 11.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
11.04(i) hereof), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 11.06. Repayment to Company. Any money deposited with the Trustee
or any paying agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest on any Security and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall be paid to the Company on its written request or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such paying agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such paying agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 11.07. Reinstatement. If the Trustee or paying agent is unable to
apply any U.S. Dollars or non-callable Government Securities in accordance with
Section 11.02 or 11.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 11.02 or 11.03 hereof until such time
as the Trustee or paying agent is permitted to apply all such money in
accordance with Section 11.02 or 11.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Security following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Security to
receive such payment from the money held by the Trustee or paying agent.
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ARTICLE 12
Miscellaneous Provisions
Section 12.01. Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Company or of any successor, either
directly or through the Company or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise, all such liability being expressly
waived and released by the acceptance of the Securities by the holders thereof
and as part of the consideration for the issue of the Securities.
Section 12.02. Provisions of Indenture for the Sole Benefit of Parties and
Holders. Except as set forth in Section 12.09, nothing in this Indenture or in
the Securities, expressed or implied, shall give or be construed to give to any
person, firm or corporation, other than the parties hereto and their successors
and the holders of the Securities, any legal or equitable right, remedy or claim
under this Indenture or under any covenant or provision herein contained, all
such covenants and provisions being for the sole benefit of the parties hereto
and their successors and of the holders of the Securities.
Section 12.03. Successors and Assigns of Company Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or in behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
Section 12.04. Notices and Demands on Company, Trustee and Holders. Any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Securities
to or on the Company may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Company is filed by the Company with the Trustee)
to Vencor, Inc., 3300 Providian Center, 400 West Market Street, Louisville,
Kentucky 40202, Attention: Secretary, with a copy to the Director of Finance.
Any notice, direction, request or demand by the Company or any Securityholder to
or upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made at the Corporate Trust Office.
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Where this Indenture provides for notice to Holders, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder entitled thereto, at his
last address as it appears in the Security register. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. The Trustee may waive notice
to it of any provision herein, and such waiver shall be deemed to be for its
convenience and discretion. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Company and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
Section 12.05. Officers' Certificates and Opinions of Counsel; Statements
to Be Contained Therein. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
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Any certificate, statement or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information which is in the possession of the Company,
upon the certificate, statement or opinion of or representations by an officer
or officers of the Company, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with the Trustee shall contain a statement that such firm is independent.
Section 12.06. Payments Due on Saturdays, Sundays and Holidays. If the date
of maturity of interest on or principal of the Securities or the date fixed for
redemption of any Security shall not be a Business Day, then payment of interest
or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
Section 12.07. Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture by
operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939
(an "INCORPORATED PROVISION"), such incorporated provision shall control.
Section 12.08. New York Law to Govern. This Indenture and each Security
shall be deemed to be a contract under the laws of the State of New York, and
for all purposes shall be construed in accordance with the laws of said State,
except as may otherwise be required by mandatory provisions of law.
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Section 12.09. Third Party Beneficiaries. Holders of Senior Debt of the
Company are third party beneficiaries of this Indenture, and any of them (or
their representative) shall have the right to enforce the provisions of this
Indenture that benefit such holders.
Section 12.10. Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 12.11. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of July 21, 1997.
VENCOR, INC.
as Issuer
By
--------------------------------------
Title:
THE BANK OF NEW YORK,
as Trustee
By
--------------------------------------
Title:
<PAGE>
EXHIBIT A
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
______, ____
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Department
Re: Vencor, Inc. (the "Company")
% Senior Subordinated Notes due 2007 (the "Securities")
---------------------------------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S.$________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the Securities Act of 1933, as
amended, and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
<PAGE>
By:
------------------------------------
Authorized Signature
A-2
<PAGE>
EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into as of July 21, 1997 by and among Vencor, Inc., a Delaware corporation (the
"COMPANY"), and J.P. Morgan Securities Inc., NationsBanc Capital Markets, Inc.,
Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement dated July 16,
1997, among the Company and the Initial Purchasers (the "PURCHASE AGREEMENT"),
which provides for the sale by the Company to the Initial Purchasers of
$750,000,000 principal amount of its 8 5/8% Senior Subordinated Notes due 2007
of the Company (the "SECURITIES"). The Securities are to be issued by the
Company pursuant to the provisions of an Indenture dated as of July 21, 1997 (as
amended, supplemented or otherwise modified from time to time, the "INDENTURE")
between the Company and The Bank of New York, as trustee (the "TRUSTEE").
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide to the Initial Purchasers and its
direct and indirect transferees the registration rights with respect to the
Securities set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
-----------
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time to
time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
<PAGE>
"CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble and shall also
include the Company's successors.
"EXCHANGE DATE" shall have the meaning set forth in Section 2(a)(ii).
"EXCHANGE OFFER" shall mean the exchange offer by the Company of Exchange
Securities for all Securities that are Registrable Securities pursuant to
Section 2(a).
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933 Act
effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on an appropriate form and all amendments and supplements
to such registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"EXCHANGE SECURITIES" shall mean securities issued by the Company under the
Indenture and containing terms identical to the Securities (except that (i)
interest thereon shall accrue from the last date on which interest was paid on
the Securities or, if no such interest has been paid, from July 21, 1997 and
(ii) the Exchange Securities will not provide for additional interest accruing
thereon following a failure to register such Exchange Securities under the 1933
Act and will not contain terms with respect to transfer restrictions) and to be
offered to Holders of Securities in exchange for Securities pursuant to the
Exchange Offer.
"HOLDERS" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture; provided that for purposes of Sections 4 and 5
of this Agreement, the term "HOLDERS" shall include Participating Broker-
Dealers.
"INDENTURE" shall have the meaning set forth in the preamble.
"INITIAL PURCHASERS" shall have the meaning set forth in the preamble.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities; provided that, for
purposes of Section 6(b), whenever the consent or approval of Holders of a
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<PAGE>
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or any of its affiliates (as such
term is defined in Rule 405 under the 1933 Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage or amount.
"OFFER TERMINATION DATE" shall have the meaning set forth in Section
2(a)(iv).
"PARTICIPATING BROKER-DEALER" shall have the meaning set forth in Section
4(a) hereof.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.
"REGISTRABLE SECURITIES" shall mean the Securities; provided, however, that
the Securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to such Securities shall have been declared effective
under the 1933 Act and such Securities shall have been disposed of pursuant to
such Registration Statement, (ii) such Securities have been sold pursuant to
Rule 144(k) (or any similar provision then in force, but not Rule 144A) under
the 1933 Act, (iii) such Securities shall have ceased to be outstanding or (iv)
such Securities have been exchanged for Exchange Securities upon consummation of
the Exchange Offer.
"REGISTRATION EXPENSES" shall mean any and all expense incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws, (iii) all expenses of any Person in preparing or assisting in
preparing, word processing, printing and distributing, at the request of the
Company, any Registration
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<PAGE>
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all fees
and disbursements relating to the qualification of the Indenture under
applicable securities laws, (v) the fees and disbursements of the Trustee and
its counsel, (vi) the fees and disbursements of counsel for the Company and for
the Initial Purchasers and, in the case of a Shelf Registration Statement, the
fees and disbursements of one counsel for the Holders incurred on or before the
initial effectiveness of the Shelf Registration Statement, which counsel shall
be counsel for the Initial Purchasers or other counsel selected by the Majority
Holders and satisfactory to the Company ("counsel for the Holders"), (vii) the
fees and disbursements of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, but excluding underwriting
discounts, if any, and commissions and transfer taxes, if any, relating to the
sale or disposition of Registrable Securities by the Holders and (viii) the fees
and expenses of listing the Registrable Securities on any securities exchange or
quotation system in accordance with Section 3(o) hereof.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company that covers any of the Exchange Securities or the Registrable Securities
pursuant to the provisions of this Agreement and all amendments and supplements
to any such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected pursuant to Section
2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 2(b) of this Agreement
which covers all of the Registrable Securities (except Registrable Securities
that the Holders have elected not to include in such Shelf Registration
Statement) or Securities that represent an unsold allotment for the original
offering thereof on an appropriate form under Rule 415 under the 1933 Act, or
any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
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<PAGE>
"TRUSTEE" shall have the meaning set forth in the preamble.
"UNDERWRITERS" shall have the meaning set forth in Section 3 hereof.
"UNDERWRITTEN OFFERING" shall mean a registration in which Registrable
Securities are sold to an Underwriter for reoffering to the public.
2. Registration under the 1933 Act.
-------------------------------
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company shall use its best
efforts to cause to be filed an Exchange Offer Registration Statement
covering the offer by the Company to the Holders to exchange all of the
Registrable Securities for Exchange Securities on or prior to the date that
is 60 days after the Closing Date, to have such Registration Statement
declared effective by the SEC on or prior to the date that is 120 days
after the Closing Date and remain effective until the closing of the
Exchange Offer and to consummate the Exchange Offer on or prior to the date
that is 150 days after the Closing Date. For purposes hereof, "CONSUMMATE"
shall mean that the Exchange Offer Registration Statement shall have been
declared effective, subject to Section (b)2, the period of the Exchange
Offer provided in accordance with clause 2(a)(ii) below shall have expired
and all Registrable Securities validly tendered in connection with such
Exchange Offer shall have been exchanged for Exchange Securities. The
Company shall commence the Exchange Offer by mailing the related exchange
offer Prospectus and accompanying documents to each Holder stating, in
addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Registration Rights Agreement and that all Registrable Securities
validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a
period of at least 30 days from the date such notice is mailed) (each
such date being an "EXCHANGE DATE");
(iii) that any Registrable Note not tendered will remain
outstanding and continue to accrue interest, but will not retain any
rights under this Agreement, other than Securities that represent an
unsold allotment for the original offering thereof;
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<PAGE>
(iv) that Holders electing to have a Registrable Note exchanged
pursuant to the Exchange Offer will be required to surrender such
Registrable Note, together with the enclosed letters of transmittal,
to the institution and at the address specified in the notice prior to
the close of business on the last Exchange Date (the "OFFER
TERMINATION DATE"); and
(v) that Holders will be entitled to withdraw their election,
not later than the close of business on the Offer Termination Date, by
sending to the institution and at the address specified in the notice
a telegram, telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of Registrable Securities
delivered for exchange and a statement that such Holder is withdrawing
his election to have such Registrable Securities exchanged.
As soon as practicable after the Offer Termination Date, the Company shall:
(A) accept for exchange Registrable Securities or portions
thereof tendered and not validly withdrawn pursuant to the
Exchange Offer; and
(B) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so
accepted for exchange by the Company and issue, and cause the
Trustee to promptly authenticate and mail to each Holder, an
Exchange Note equal in aggregate principal amount to the
aggregate principal amount of the Registrable Securities
surrendered by such Holder.
The Company shall use its best efforts to complete the Exchange Offer as
provided above and shall comply with the applicable requirements of the 1933
Act, the 1934 Act and other applicable laws and regulations in connection with
the Exchange Offer. The Exchange Offer shall not be subject to any conditions,
other than that the Exchange Offer does not violate applicable law or any
applicable interpretation of the Staff of the SEC.
(b) In the event that (i) the Company determines that the Exchange
Offer Registration provided for in Section 2(a) above is not available or
may not be consummated as soon as practicable after the Offer Termination
Date because it would violate applicable law or the applicable
interpretations of the Staff of the SEC, (ii) the Exchange Offer is not for
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<PAGE>
any other reason consummated within 150 days after the Closing Date or
(iii) in the opinion of counsel for the Initial Purchasers a Registration
Statement must be filed and a Prospectus must be delivered by the Initial
Purchasers in connection with any offering or sale of Registrable
Securities because such Registrable Securities represent an unsold
allotment for the original offering thereof, the Company shall use its best
efforts to cause to be filed as soon as practicable after such
determination, date or notice of such opinion of counsel is given to the
Company, as the case may be, a Shelf Registration Statement providing for
the sale of such Registrable Securities and to have such Shelf Registration
Statement declared effective by the SEC. In the event the Company is
required to file a Shelf Registration Statement solely as a result of the
matters referred to in clause (iii) of the preceding sentence, the Company
shall file and have declared effective by the SEC both an Exchange Offer
Registration Statement pursuant to Section 2(a) with respect to all
Registrable Securities and a Shelf Registration Statement (which may be a
combined Registration Statement with the Exchange Offer Registration
Statement) with respect to offers and sales of Registrable Securities held
by the Initial Purchasers after completion of the Exchange Offer. The
Company agrees to use its best efforts to keep the Shelf Registration
Statement continuously effective until 180 days from the effective date
thereof or such shorter period that will terminate when all of the
Registrable Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement. The Company further
agrees to supplement or amend the Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration
form used by the Company for such Shelf Registration Statement or by the
1933 Act or by any other rules and regulations thereunder for shelf
registration or if reasonably requested by a Holder with respect to
information relating to such Holder, and to use their best efforts to cause
any such amendment to become effective and such Shelf Registration
Statement to become usable as soon as practicable thereafter. The Company
agrees to furnish to the Holders of Registrable Securities copies of any
such supplement or amendment promptly after its being used or filed with
the SEC.
(c) The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2(a) or Section 2(b). Each Holder
shall pay all underwriting discounts, if any, and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a Shelf Registration Statement.
(d) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Shelf Registration Statement pursuant to Section
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2(b) hereof will not be deemed to have become effective unless it has been
declared effective by the SEC; provided, however, that, if, after it has
been declared effective, the offering of Registrable Securities pursuant to
a Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed
not to be effective during the period of such interference until the
offering of Registrable Securities pursuant to such Registration Statement
may legally resume.
(e) In the event that (i) the Exchange Offer Registration Statement
relating to the Exchange Offer is not filed with the Commission on or prior
to the date that is 60 days after the Closing Date, (ii) the Exchange Offer
Registration Statement is not declared effective on or prior to the date
that is 120 days after the Closing Date, or (iii) the Exchange Offer is not
consummated or a Shelf Registration Statement with respect to resale of the
Securities is not declared effective on or prior to the date that is 150
days after the Closing Date (each such event referred to in clauses (i)
through (iii), a "Registration Default"), then the Company will pay
additional interest (in addition to the interest otherwise due on the
Securities) to each Holder of Securities during the first 90-day period
immediately following the occurrence of each such Registration Default in
an amount equal to 0.25% per annum. The amount of interest will increase by
an additional 0.25% per annum for each subsequent 90-day period until such
Registration Default is cured, up to a maximum amount of additional
interest of 1.00% per annum. Such additional interest will cease accruing
on such Securities with respect to any Registration Default when such
Registration Default has been cured.
(f) Without limiting the remedies available to the Initial Purchasers
and the Holders, the Company acknowledges that any failure by the Company
to comply with its obligations under Section 2(a) and Section 2(b) hereof
may result in material irreparable injury to the Initial Purchasers or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damage for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain
such relief as may be required to specifically enforce the Company's
obligations under Section 2(a) and Section 2(b) hereof.
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<PAGE>
3. Registration Procedures.
-----------------------
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall reasonably promptly:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the 1933 Act, which form shall (x) be selected by
the Company, (y) in the case of a Shelf Registration, be available for the
sale of the Registrable Securities by the selling Holders thereof and (z)
comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to
be filed therewith, and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period and cause each
Prospectus to be supplemented by any required prospectus supplement and, as
so supplemented, to be filed pursuant to Rule 424 under the 1933 Act; and
keep each Prospectus current during the period described under Section 4(3)
and Rule 174 under the 1933 Act that is applicable to transactions by
brokers or dealers with respect to the Registrable Securities or Exchange
Securities;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Holders and for the Initial
Purchasers (or, if applicable, separate counsel for the Holders) and to
each Underwriter of an Underwritten Offering of Registrable Securities, if
any, without charge, as many copies of each Prospectus, including each
preliminary Prospectus and any amendment or supplement thereto and such
other documents as such Holder or Underwriter may reasonably request, in
order to facilitate the public sale or other disposition of the Registrable
Securities; and the Company consents to the use of such Prospectus and any
amendment or supplement thereto in accordance with applicable law by each
of the selling Holders of Registrable Securities and any such Underwriters
in connection with the offering and sale of the Registrable Securities
covered by and in the manner described in such Prospectus or any amendment
or supplement thereto in accordance with applicable law;
(d) use its best efforts (i) to register or qualify the Registrable
Securities under all applicable state securities or blue sky laws of such
jurisdictions as any Holder of Registrable Securities covered by a
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Registration Statement shall reasonably request in writing by the time the
applicable Registration Statement is declared effective by the SEC and (ii)
to cooperate with such Holders in connection with any filings required to
be made with the National Association of Securities Dealers, Inc. and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder; provided,
however, that the Company shall not be required to (A) register or qualify
as a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to register or qualify but for
this Section, (B) file any general consent to service of process or (C)
subject itself to taxation in any such jurisdiction if it is not so
subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities, counsel for the Holders and for the Initial
Purchasers (or, if applicable, separate counsel for the Holders) and, if
requested by such Persons, confirm such advice in writing, (i) when a
Registration Statement has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (ii) of any request
by the SEC or any state securities authority for amendments and supplements
to a Registration Statement and Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation
of any proceedings for that purpose, (iv) if, between the effective date of
a Registration Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and warranties of the
Company contained in any underwriting agreement, securities sales agreement
or other similar agreement, if any, relating to the offering cease to be
true and correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, (v) of the happening of any event during
the period a Shelf Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus
untrue in any material respect or which requires the making of any changes
in such Registration Statement or Prospectus in order to make the
statements therein not misleading and (vi) of any determination by the
Company that a post-effective amendment to a Registration Statement would
be appropriate;
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(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment and provide prompt notice to each Holder of the
withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends (unless required by applicable
securities laws) and enable such Registrable Securities to be in such
denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders may reasonably request at
least two business days prior to the closing of any sale of Registrable
Securities;
(i) in the case of a Shelf Registration, upon the occurrence of any
event contemplated by Section 3(e) hereof, use its best efforts to prepare
a supplement or post-effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, such Prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company agrees to notify
the Holders to suspend use of the Prospectus as promptly as practicable
after the occurrence of such an event, and the Holders hereby agree to
suspend use of the Prospectus until the Company has amended or supplemented
the Prospectus to correct such misstatement or omission;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus, or any document which is to be
incorporated by reference into a Registration Statement or Prospectus after
the initial filing of a Registration Statement, provide copies of such
document to the Initial Purchasers and their counsel (and, in the case of a
Shelf Registration Statement, counsel for the Holders) and make such of the
representatives of the Company as shall be reasonably requested by the
Initial Purchasers or its counsel (and, in the case of a Shelf Registration
Statement, counsel for the Holders) available for discussion of such
11
<PAGE>
document, and shall not at any time file or make any amendment to the
Registration Statement, any Prospectus or any amendment of or supplement to
a Registration Statement or a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus, of
which the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, counsel for the Holders) shall not have previously
been advised and furnished a copy or to which the Initial Purchasers or
their counsel (and, in the case of a Shelf Registration Statement, counsel
for the Holders) shall reasonably object;
(k) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement;
(l) cause the Indenture to be qualified under the Trust Indenture Act
of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Securities or Registrable Securities, as the case may be, and
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts
to cause the Trustee to execute, all documents as may be required to effect
such changes and all other forms and documents required to be filed with
the SEC to enable the Indenture to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for
inspection by a representative of the Holders of the Registrable
Securities, any Underwriter participating in any disposition pursuant to
such Shelf Registration Statement, and counsel for the Holders, at
reasonable times and in a reasonable manner, all financial and other
records, pertinent documents and properties of the Company, and cause the
respective officers, directors and employees of the Company to supply all
information reasonably requested by any such representative, Underwriter,
attorney or accountant in connection with a Shelf Registration Statement,
in each case that would customarily be reviewed or examined in connection
with "DUE DILIGENCE" review of the Company;
(n) if reasonably requested by any Holder of Registrable Securities
covered by a Registration Statement, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information with
respect to such Holder as such Holder reasonably requests to be included
therein and (ii) make all required filings of such Prospectus supplement or
such post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such filing;
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<PAGE>
(o) cause all Registrable Securities covered by a Registration
Statement to be (i) listed on each securities exchange or quotation system
on which similar securities issued by the Company are then listed, if so
requested by the Majority Holders and (ii) rated with the appropriate
rating agencies, if so requested by the Majority Holders; and
(p) in the case of an Underwritten Offering pursuant to a Shelf
Registration, enter into such customary agreements and take all such other
customary actions in connection therewith (including, those reasonably
requested by counsel for the Holders) in order to expedite or facilitate
the disposition of such Registrable Securities and in such connection, (i)
to the extent possible, make such representations and warranties to the
Holders and any Underwriters of such Registrable Securities with respect to
the business of the Company and its subsidiaries, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same if and when requested, (ii) obtain opinions
of counsel to the Company (which counsel and opinions, in form, scope and
substance, shall be reasonably satisfactory to the Holders and such
Underwriters and their respective counsel) addressed to each selling Holder
and Underwriter of Registrable Securities, covering the matters customarily
covered in opinions requested in underwritten offerings, (iii) obtain "cold
comfort" letters from the independent certified public accountants of the
Company (and, if necessary, any other certified public accountant of any
subsidiary of the Company, or any business acquired by the Company for
which financial statements and financial data are or are required to be
included in the Registration Statement) addressed to each selling Holder
and Underwriter of Registrable Securities, such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings, and (iv) deliver such
documents and certificates as may be reasonably requested by counsel for
the Holders to evidence the continued validity of the representations and
warranties of the Company made pursuant to clause (i) above and to evidence
compliance with any customary conditions in an underwriting agreement. In
the case of any Underwritten Offering, the Company shall provide written
notice to the Holders of all Registrable Securities of such Underwritten
Offering at least 30 days prior to the filing of a prospectus supplement
for such Underwritten Offering. Such notice shall (x) offer each such
Holder the right to participate in such Underwritten Offering, (y) specify
a date, which shall be no earlier than 10 days following the date of such
notice, by which such Holder must inform the Company of its intent to
participate in such Underwritten Offering and (z) include the instructions
such Holder must follow in order to participate in such Underwritten
Offering.
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<PAGE>
In the case of a Shelf Registration Statement, the Company may require each
Holder of Registrable Securities to promptly furnish to the Company such
information regarding the Holders and the proposed distribution by such Holder
of such Registration Securities as the Company may from time to time reasonably
request in writing.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 3(e) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registration Securities current at the time of
receipt of such notice.
If the Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to a Registration Statement, the Company shall
extend the period during which the Registration Statement shall be maintained
effective pursuant to this Agreement by the number of days during the period
from and including the date of the giving of such notice to and including the
date when the Holders shall have received copies of the supplemented or amended
Prospectus necessary to resume such dispositions.
The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "UNDERWRITERS") that will
administer the offering will be selected by the Holders of a majority in
principal amount of the Registrable Securities included in such offering.
4. Participation of Broker-Dealers in Exchange Offer.
-------------------------------------------------
(a) The Company understands that the Staff of the SEC has taken the
position that any broker-dealer that receives Exchange Securities for its
own account in the Exchange Offer in exchange for Securities that were
acquired by such broker-dealer as a result of market-making or other
trading activities (a "PARTICIPATING BROKER-DEALER"), may be deemed to be
an "underwriter" within the meaning of the 1933 Act in connection with any
resale of such Exchange Securities.
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<PAGE>
The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the Exchange Securities, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the 1933
Act in connection with resales of Exchange Securities for their own accounts, so
long as the Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other provisions of
this Agreement, the Company agrees that the provisions of this Agreement as
they relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such reasonable modifications thereto
as may be reasonably requested by the Initial Purchasers or by one or more
Participating Broker-Dealers, in each case as provided in clause 4(b)(ii)
below, in order to expedite or facilitate the disposition of any Exchange
Securities by Participating Broker-Dealers consistent with the positions of
the Staff recited in Section 4(a) above; provided that:
(i) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement,
as would otherwise be contemplated by Section 3(i), for a period
exceeding 180 days after the Offer Termination Date (as such period
may be extended pursuant to the penultimate paragraph of Section 3)
and Participating Broker-Dealers shall not be authorized by the
Company to deliver and shall not deliver such Prospectus after such
period in connection with the resales contemplated by this Section;
and
(ii) the application of the Shelf Registration procedures set
forth in Section 3 of this Agreement to an Exchange Offer
Registration, to the extent not required by the positions of the Staff
of the SEC or the 1933 Act and the rules and regulations thereunder,
will be in conformity with the reasonable request to the Company by
the Initial Purchasers or with the reasonable request in writing to
the Company by one or more broker-dealers who certify to the Initial
Purchasers and the Company in writing that they anticipate that they
will be Participating Broker-Dealers; and provided further that, in
connection with such application of the
15
<PAGE>
Shelf Registration procedures set forth in Section 3 to an Exchange
Offer Registration, the Company shall be obligated (x) to deal only
with only the entity representing the Participating Broker-Dealers,
which shall be J.P. Morgan Securities Inc. unless it elects not to act
as such representative, (y) to pay the fees and expenses of only one
counsel representing the Participating Broker-Dealers, which shall be
counsel to the Initial Purchasers unless such counsel elects not to so
act and (z) to cause to be delivered only one, if any, "cold comfort"
letter with respect to the Prospectus in the form existing on the
Offer Termination Date.
(c) The Initial Purchasers shall have no liability to the Company or
any Holder with respect to any request that they make pursuant to Section
4(b) above.
5. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder and each Person, if any who controls the Initial
Purchasers or any Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, or is under common control with, or
is controlled by, the Initial Purchasers or any Holder, from and against
any and all losses, claims, damages and liabilities (including without
limitation the reasonable legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) and
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or
any amendment thereto pursuant to which Exchange Securities or Registrable
Securities were registered under the 1933 Act, including all documents
incorporated therein by reference), or arising out of or based upon any
omissions or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto, including all documents incorporated therein by
reference), or arising out of or based upon any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information
16
<PAGE>
relating to such Initial Purchasers or Holder furnished in writing to the
Company by or on behalf of any Initial Purchaser or Holder expressly for
use in connection therewith. In connection with any Underwritten Offering
permitted by Section 3 hereof, the Company will also indemnify the
Underwriters, if any, selling brokers, dealers and similar securities
industry professionals participating in the distribution, their officers
and directors and each Person who controls such Persons within the meaning
of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the
same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.
(b) Each of the Initial Purchasers and Holders agree, severally and
not jointly, to indemnify and hold harmless the Company, its directors and
officers, and any Person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to the Initial Purchasers and
Holders, but only with respect to information relating to each Initial
Purchaser or Holder furnished in writing by or on behalf of such Initial
Purchaser or Holder expressly for use in any Registration Statement (or any
amendment thereto) or any prospectus (or any amendment or supplement
thereto).
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "INDEMNIFIED
PERSON") shall promptly notify the Person against whom such indemnity may
be sought (the "INDEMNIFYING PERSON") in writing, and the Indemnifying
Person, upon request of the Indemnified Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in
such proceeding and shall pay the reasonable fees and expenses of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed
within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and
the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the
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<PAGE>
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for (a) the fees and
expenses of more than one separate firm (in addition to any local counsel)
for the Initial Purchasers and all Persons, if any, who control the Initial
Purchasers within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act, (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each
Person, if any, who controls the Company within the meaning of either such
Section and (c) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Holders and all Persons, if any, who
control any Holders within the meaning of either such Section. Any such
separate firm for the Initial Purchasers and such control Persons of
Initial Purchasers shall be designated in writing by J.P. Morgan Securities
Inc., any such separate firm for the Holders and such Persons who control
Holders shall be designated in writing by the Majority Holders and any such
separate firm for the Company, its directors, its officers and such control
Persons of the Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss
or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for
reasonable fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the Indemnifying Person agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 90 days
after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person
in accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been
a party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such
Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section is
unavailable to an Indemnified Person under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages or liabilities referred to therein,
18
<PAGE>
then an Indemnifying Person, in lieu of indemnifying such Indemnified
Person, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the Company
on the one hand and the Initial Purchasers or Holders on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and the
Initial Purchasers or Holders on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one
hand or by Initial Purchasers or the Holders on the other hand and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The Company, the Initial Purchasers and each Holder agree that it
would not be just or equitable if contribution pursuant to this Section
were determined by pro rata allocation (even if the Initial Purchasers and
the Holders were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in paragraph 5(d) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages
and liabilities referred to in paragraph 5(d) above shall be deemed to
include, subject to the limitations set forth above, any reasonable legal
or other expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section, no Initial Purchaser or Holder shall be
required to indemnify or contribute any amount in excess of the amount by
which the total price at which Registrable Securities were sold by such
Initial Purchaser or Holder exceeds the amount of any damages that such
Initial Purchaser or Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section are several in
proportion to the aggregate principal amount of Registrable Securities sold
by them pursuant to such Registration Statement.
19
<PAGE>
(f) Any losses, claims, damages or liabilities for which an
Indemnified Person is entitled to indemnification or contribution under
this Section shall be paid by the Indemnifying Person to the Indemnified
Person as such losses, claims, damages or liabilities are incurred. The
indemnity and contribution agreements contained in this Section and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Initial Purchaser, any Holder or
any Person controlling any Initial Purchaser, any Holder, the Company's
directors or officers or any Person controlling the Company, (ii)
acceptance of any Exchange Securities (iii) any termination of this
Agreement and (iv) any sale of Registrable Securities pursuant to a Shelf
Registration Statement.
6. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not entered into, and
--------------------------
on or after the date of this Agreement will not enter into, any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities under any
such agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the Company has obtained the written consent
of Holders of at least a majority in aggregate principal amount of the
outstanding Registrable Securities affected by such amendment,
modification, supplement, waiver or consent; provided, however, that no
amendment, modification, supplement, waiver or consent to any departure
from the provisions of Section 5 hereof shall be effective as against any
Holder of Registrable Securities unless consented to in writing by such
Holder.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such
Holder to the Company by means of a notice given in accordance with the
provisions of this Section, which address initially is, with respect to the
Initial Purchasers, the address set forth in the Purchase Agreement; and
(ii) if to the Company, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section.
20
<PAGE>
All such notices and communications shall be deemed to have been duly given
at the time delivered, if personally delivered; five business days after being
deposited in the mail, postage pre-paid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the next business
day if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of
the parties, including, without limitation and without the need for an
express assignment or assumption, subsequent Holders; provided that nothing
herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the
Purchase Agreement. The Initial Purchasers shall have no liability or
obligation to the Company with respect to any failure by a Holder to comply
with, or any breach by any Holder of, the obligations of such Holder under
this Agreement.
(e) Purchases and Sales of Securities. The Company shall not, and
---------------------------------
shall cause its affiliates (as defined in rule 405 under the 1993 Act) not
to, purchase and then resell or otherwise transfer any Securities (other
than Exchange Securities) other than to the Company or its affiliates.
(f) Third Party Beneficiary. Each Holder shall be a third party
-----------------------
beneficiary to the agreements made hereunder between the Company, on the
one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
21
<PAGE>
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by laws of the
-------------
State of New York.
(j) Severability. In the event that one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable the validity, legality and enforceability
of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
22
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
VENCOR, INC.
By
-------------------------------------
Name:
Title:
J.P. MORGAN SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: J.P. MORGAN SECURITIES INC.
By
-------------------------------------
Name:
Title:
23
