EXHIBIT 4.1
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MEDQUEST, INC.,
MQ ASSOCIATES, INC., AS GUARANTOR,
THE SUBSIDIARY GUARANTORS PARTIES HERETO,
AND
WACHOVIA BANK, NATIONAL ASSOCIATION,
AS TRUSTEE
11 7/8% Senior Subordinated Notes due 2012
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INDENTURE
Dated as of August 15, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions...............................................................................1
SECTION 1.2. Other Definitions........................................................................35
SECTION 1.3. Incorporation by Reference of Trust Indenture Act........................................37
SECTION 1.4. Rules of Construction....................................................................38
ARTICLE II
The Securities
SECTION 2.1. Form, Dating and Terms...................................................................38
SECTION 2.2. Execution and Authentication.............................................................46
SECTION 2.3. Registrar and Paying Agent...............................................................47
SECTION 2.4. Paying Agent to Hold Money in Trust......................................................48
SECTION 2.5. Securityholder Lists.....................................................................48
SECTION 2.6. Transfer and Exchange....................................................................48
SECTION 2.7. Form of Certificate to be Delivered upon Termination of Restricted Period................51
SECTION 2.8. Form of Certificate to be Delivered in Connection with Transfers to Institutional
Accredited Investors....................................................................52
SECTION 2.9. Form of Certificate to be Delivered in Connection with Transfers Pursuant to
Regulation S............................................................................54
SECTION 2.10. Mutilated, Destroyed, Lost or Stolen Securities..........................................55
SECTION 2.11. Outstanding Securities...................................................................56
SECTION 2.12. Temporary Securities.....................................................................56
SECTION 2.13. Cancellation.............................................................................56
SECTION 2.14. Payment of Interest; Defaulted Interest..................................................57
SECTION 2.15. Computation of Interest..................................................................58
SECTION 2.16. CUSIP and ISIN Numbers...................................................................58
ARTICLE III
Covenants
SECTION 3.1. Payment of Securities....................................................................58
SECTION 3.2. SEC Reports..............................................................................58
SECTION 3.3. Limitation on Indebtedness...............................................................59
SECTION 3.4. Limitation on Restricted Payments........................................................63
SECTION 3.5. Limitation on Liens......................................................................70
SECTION 3.6. Limitation on Restrictions on Distributions from Restricted Subsidiaries.................70
SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock.......................................73
SECTION 3.8. Limitation on Affiliate Transactions.....................................................76
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SECTION 3.9. Change of Control........................................................................78
SECTION 3.10. Limitation on Sale of Capital Stock of Restricted Subsidiaries...........................80
SECTION 3.11. Limitation on Layering...................................................................81
SECTION 3.12. Future Subsidiary Guarantors.............................................................81
SECTION 3.13. Limitation on Lines of Business..........................................................81
SECTION 3.14. Maintenance of Office or Agency..........................................................81
SECTION 3.15. Corporate Existence......................................................................82
SECTION 3.16. Payment of Taxes and Other Claims........................................................82
SECTION 3.17. Payments for Consent.....................................................................82
SECTION 3.18. Compliance Certificate...................................................................82
SECTION 3.19. Further Instruments and Acts.............................................................83
SECTION 3.20. Statement by Officers as to Default......................................................83
ARTICLE IV
Successor Company
SECTION 4.1. Merger and Consolidation.................................................................83
ARTICLE V
Redemption of Securities
SECTION 5.1. Optional Redemption......................................................................85
SECTION 5.2. Applicability of Article.................................................................85
SECTION 5.3. Election to Redeem; Notice to Trustee....................................................85
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed........................................86
SECTION 5.5. Notice of Redemption.....................................................................86
SECTION 5.6. Deposit of Redemption Price..............................................................87
SECTION 5.7. Securities Payable on Redemption Date....................................................87
SECTION 5.8. Securities Redeemed in Part..............................................................88
ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default........................................................................88
SECTION 6.2. Acceleration.............................................................................91
SECTION 6.3. Other Remedies...........................................................................92
SECTION 6.4. Waiver of Past Defaults..................................................................92
SECTION 6.5. Control by Majority......................................................................92
SECTION 6.6. Limitation on Suits......................................................................93
SECTION 6.7. Rights of Holders to Receive Payment.....................................................93
SECTION 6.8. Collection Suit by Trustee...............................................................93
SECTION 6.9. Trustee May File Proofs of Claim.........................................................93
SECTION 6.10. Priorities...............................................................................94
SECTION 6.11. Undertaking for Costs....................................................................94
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ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee........................................................................94
SECTION 7.2. Rights of Trustee........................................................................96
SECTION 7.3. Individual Rights of Trustee.............................................................96
SECTION 7.4. Trustee's Disclaimer.....................................................................96
SECTION 7.5. Notice of Defaults.......................................................................97
SECTION 7.6. Reports by Trustee to Holders............................................................97
SECTION 7.7. Compensation and Indemnity...............................................................97
SECTION 7.8. Replacement of Trustee...................................................................98
SECTION 7.9. Successor Trustee by Merger..............................................................99
SECTION 7.10. Eligibility; Disqualification............................................................99
SECTION 7.11. Preferential Collection of Claims Against Company........................................99
SECTION 7.12. Trustee's Application for Instruction from the Company...................................99
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance........................................100
SECTION 8.2. Conditions to Defeasance................................................................101
SECTION 8.3. Application of Trust Money..............................................................102
SECTION 8.4. Repayment to Company....................................................................103
SECTION 8.5. Indemnity for U.S. Government Obligations...............................................103
SECTION 8.6. Reinstatement...........................................................................103
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders..............................................................103
SECTION 9.2. With Consent of Holders.................................................................104
SECTION 9.3. Compliance with Trust Indenture Act.....................................................105
SECTION 9.4. Revocation and Effect of Consents and Waivers...........................................105
SECTION 9.5. Notation on or Exchange of Securities...................................................106
SECTION 9.6. Trustee To Sign Amendments..............................................................106
ARTICLE X
Subordination
SECTION 10.1. Agreement To Subordinate................................................................106
SECTION 10.2. Liquidation, Dissolution, Bankruptcy....................................................106
SECTION 10.3. Default on Senior Indebtedness..........................................................107
SECTION 10.4. Acceleration of Payment of Securities...................................................108
SECTION 10.5. When Distribution Must Be Paid Over.....................................................108
SECTION 10.6. Subrogation.............................................................................108
SECTION 10.7. Relative Rights.........................................................................108
SECTION 10.8. Subordination May Not Be Impaired by Company............................................109
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SECTION 10.9. Rights of Trustee and Paying Agent......................................................109
SECTION 10.10. Distribution or Notice to Representative...............................................109
SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right To Accelerate................109
SECTION 10.12. Trust Moneys Not Subordinated..........................................................109
SECTION 10.13. Trustee Entitled To Rely...............................................................109
SECTION 10.14. Trustee To Effectuate Subordination....................................................110
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness...............................110
SECTION 10.16. Reliance by Holders of Senior Indebtedness on Indebtedness on Subordination Provisions.110
ARTICLE XI
Notes Guarantee
SECTION 11.1. Notes Guarantee.........................................................................110
SECTION 11.2. Limitation on Liability; Termination, Release and Discharge.............................112
SECTION 11.3. Right of Contribution...................................................................113
SECTION 11.4. No Subrogation..........................................................................113
ARTICLE XII
Subordination of Notes Guarantees
SECTION 12.1. Agreement To Subordinate................................................................113
SECTION 12.2. Liquidation, Dissolution, Bankruptcy....................................................114
SECTION 12.3. Default on Guarantor Senior Indebtedness................................................114
SECTION 12.4. Acceleration of Payment of Securities...................................................115
SECTION 12.5. When Distribution Must Be Paid Over.....................................................116
SECTION 12.6. Subrogation.............................................................................116
SECTION 12.7. Relative Rights.........................................................................116
SECTION 12.8. Subordination May Not Be Impaired by Company............................................116
SECTION 12.9. Rights of Trustee and Paying Agent......................................................116
SECTION 12.10. Distribution or Notice to Representative...............................................117
SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right To Accelerate..............117
SECTION 12.12. Trust Moneys Not Subordinated..........................................................117
SECTION 12.13. Trustee Entitled To Rely...............................................................117
SECTION 12.14. Trustee To Effectuate Subordination....................................................117
SECTION 12.15. Trustee Not Fiduciary for Holders of Guarantor Senior Indebtedness.....................117
SECTION 12.16. Reliance by Holders of Guarantor Senior Indebtedness on Indebtedness on Subordination
Provisions...........................................................................118
ARTICLE XIII
Miscellaneous
SECTION 13.1. Trust Indenture Act Controls............................................................118
SECTION 13.2. Notices.................................................................................118
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SECTION 13.3. Communication by Holders with other Holders.............................................119
SECTION 13.4. Certificate and Opinion as to Conditions Precedent......................................119
SECTION 13.5. Statements Required in Certificate or Opinion...........................................119
SECTION 13.6. When Securities Disregarded.............................................................120
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar............................................120
SECTION 13.8. Legal Holidays..........................................................................120
SECTION 13.9. GOVERNING LAW...........................................................................120
SECTION 13.10. No Recourse Against Others.............................................................120
SECTION 13.11. Successors.............................................................................120
SECTION 13.12. Multiple Originals.....................................................................120
SECTION 13.13. Qualification of Indenture.............................................................121
SECTION 13.14. Table of Contents; Headings............................................................121
EXHIBIT A Form of the Series A Note
EXHIBIT B Form of the Series B Note
EXHIBIT C Form of Supplemental Indenture
Schedule 3.6 Existing Restrictions on Distributions
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) ...................................... 7.10
(a)(2) ...................................... 7.10
(a)(3) ...................................... N.A.
(a)(4) ...................................... N.A.
(b) ...................................... 7.8; 7.10
(c) ...................................... N.A.
311(a) ...................................... 7.11
(b) ...................................... 7.11
(c) ...................................... N.A.
312(a) ...................................... 2.5
(b) ...................................... 13.3
(c) ...................................... 13.3
313(a) ...................................... 7.6
(b)(1) ...................................... N.A.
(b)(2) ...................................... 7.6
(c) ...................................... 7.6
(d) ...................................... 7.6
314(a) ...................................... 3.2; 3.20; 13.2
(b) ...................................... N.A.
(c)(1) ...................................... 13.4
(c)(2) ...................................... 13.4
(c)(3) ...................................... N.A.
(d) ...................................... N.A.
(e) ...................................... 13.5
315(a) ...................................... 7.1
(b) ...................................... 7.5; 13.2
(c) ...................................... 7.1
(d) ...................................... 7.1
(e) ...................................... 6.11
316(a)(last sentence) ...................................... 13.6
(a)(1)(A) ...................................... 6.5
(a)(1)(B) ...................................... 6.4
(a)(2) ...................................... N.A.
(b) ...................................... 6.7
317(a)(1) ...................................... 6.8
(a)(2) ...................................... 6.9
(b) ...................................... 2.4
318(a) ...................................... 13.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
INDENTURE dated as of August 15, 2002, among MEDQUEST, INC., a
Delaware corporation (the "COMPANY"), MQ ASSOCIATES, INC., a Delaware
corporation ("HOLDINGS"), THE SUBSIDIARY GUARANTORS (as defined) and WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association (the "TRUSTEE") as
Trustee.
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) the Company's 11
7/8% Senior Subordinated Notes, Series A, due 2012, issued on the date hereof
(the "INITIAL SECURITIES"), (ii) if and when issued, an unlimited principal
amount of additional 11 7/8% Senior Subordinated Notes, Series A, due 2012 in a
non-registered offering or 11 7/8% Senior Subordinated Notes, Series B, due 2012
in a registered offering of the Company that may be offered from time to time
subsequent to the Issue Date (the "ADDITIONAL SECURITIES") and (iii) if and when
issued, the Company's 11 7/8% Senior Subordinated Notes, Series B, due 2012 that
may be issued from time to time in exchange for Initial Securities or any
Additional Securities in an offer registered under the Securities Act as
provided in the Registration Rights Agreement (as hereinafter defined the
"EXCHANGE SECURITIES," and together with the Initial Securities and Additional
Securities, the "SECURITIES").
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness (i) of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or (ii) assumed in connection with the acquisition of assets from
such Person, in each case whether or not Incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such acquisition. Acquired Indebtedness shall be
deemed to have been Incurred, with respect to clause (i) of the preceding
sentence, on the date such Person becomes a Restricted Subsidiary and, with
respect to clause (ii) of the preceding sentence, on the date of consummation of
such acquisition of assets.
"ADDITIONAL ASSETS" means:
(1) any property or assets (other than Indebtedness and Capital
Stock) to be used by the Company or a Restricted Subsidiary
in a Related Business or any improvement, maintenance,
development, upgrade or repair, in each case, to the extent
such improvement, maintenance, development, upgrade or
repair is capitalized on the balance sheet of the Company,
to any property or assets that are used by the Company or a
Restricted Subsidiary in a Related Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary of the
Company; or
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(3) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary of the
Company;
PROVIDED, HOWEVER, that, in the case of clauses (2) and (3), such Restricted
Subsidiary is primarily engaged in a Related Business.
"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 the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the provisions described in SECTIONS 3.7 AND 3.8 only, "Affiliate"
shall also mean any beneficial owner of shares representing 10% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the Company
or of rights or warrants to purchase such Voting Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"APPLICABLE PREMIUM" means, with respect to a Security, the greater
of (i) 1.0% of the then outstanding principal amount of such Security and (ii)
(a) the present value of all remaining required interest and principal payments
due on such Security and all premium payments relating thereto assuming a
redemption date of August 15, 2007, computed using a discount rate equal to the
Treasury Rate plus 50 basis points minus (b) the then outstanding principal
amount of such Security minus (c) accrued interest paid on the redemption date.
"ASSET DISPOSITION" means any direct or indirect sale, lease (other
than an operating lease entered into in the ordinary course of business),
transfer, issuance or other disposition, or a series of related sales, leases,
transfers, issuances or dispositions that are part of a common plan, of shares
of Capital Stock of a Subsidiary (other than directors' qualifying shares or
shares required by applicable healthcare laws to be held by Persons other than
the Company), property or other assets (each referred to for the purposes of
this definition as a "disposition") by the Company or any of its Restricted
Subsidiaries, including any disposition by means of a merger, consolidation or
similar transaction.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Dispositions:
(1) a disposition by a Restricted Subsidiary to the Company or
by the Company or a Restricted Subsidiary to a Restricted
Subsidiary of the Company (other than a Receivables
Entity);
(2) the sale of Cash Equivalents in the ordinary course of
business;
(3) a disposition of inventory and supplies in the ordinary
course of business;
(4) a disposition of obsolete or worn out equipment or
equipment that is no longer useful in the conduct of the
business of the Company and its
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Restricted Subsidiaries and that is disposed of in each
case in the ordinary course of business;
(5) transactions permitted under SECTION 4.1;
(6) an issuance of Capital Stock by a Restricted Subsidiary of
the Company to the Company or to a Restricted Subsidiary
(other than a Receivables Entity);
(7) for purposes of SECTION 3.7 only, the making of a Permitted
Investment or a disposition subject to SECTION 3.4;
(8) sales of accounts receivable and related assets or an
interest therein of the type specified in the definition of
"Qualified Receivables Transaction" to a Receivables
Entity;
(9) dispositions of assets with an aggregate fair market value,
as determined conclusively by senior management of the
Company acting in good faith, in an amount not to exceed
$1.0 million in any calendar year (with unused amounts in
any calendar year being carried over to succeeding calendar
years);
(10) dispositions in connection with Permitted Liens;
(11) the licensing or sublicensing of intellectual property or
other general intangibles and licenses, leases or subleases
of other property in the ordinary course of business which
do not materially interfere with the business of the
Company and its Restricted Subsidiaries
(12) dispositions of receivables in connection with the
compromise, settlement or collection thereof in the
ordinary course of business or in bankruptcy or similar
proceedings and exclusive of factoring or similar
arrangements;
(13) the disposition of any Capital Stock or other ownership
interest in or assets or property of an Unrestricted
Subsidiary; and
(14) foreclosure on assets.
"AVERAGE LIFE" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1)
the sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or scheduled redemption or similar payment with respect to such Preferred Stock
multiplied by the amount of such payment by (2) the sum of all such payments.
"BANK INDEBTEDNESS" means any and all amounts, whether outstanding
on the Issue Date or Incurred after the Issue Date, payable by the Company under
or in respect of the Senior Credit Agreement and any related notes, collateral
documents, letters of credit and
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guarantees and any Interest Rate Agreement entered into in connection with the
Senior Credit Agreement, including principal, premium, if any, interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company at the rate specified
therein whether or not a claim for post filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof.
"BANKRUPTCY LAW" means Xxxxx 00, XXXXXX XXXXXX CODE or any similar
Federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"BUSINESS DAY" means each day that is not a Saturday, Sunday or
other day on which banking institutions in New York, New York are authorized or
required by law to close.
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"CAPITALIZED LEASE OBLIGATIONS" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation will be the capitalized amount of such obligation
at the time any determination thereof is to be made as determined in accordance
with GAAP, and the Stated Maturity thereof will be the date of the last payment
of rent or any other amount due under such lease prior to the first date such
lease may be terminated without penalty.
"CASH EQUIVALENTS" means:
(1) securities issued or directly and fully guaranteed or
insured by the United States Government or any agency or
instrumentality of the United States (PROVIDED that the
full faith and credit of the United States is pledged in
support thereof), having maturities of not more than one
year from the date of acquisition;
(2) marketable general obligations issued by any state of the
United States of America or any political subdivision of
any such state or any public instrumentality thereof
maturing within one year from the date of acquisition of
the United States (PROVIDED that the full faith and credit
of the United States is pledged in support thereof) and, at
the time of acquisition, having a credit rating of "A" or
better from either Standard & Poor's Ratings Services or
Xxxxx'x Investors Service, Inc.;
(3) certificates of deposit, time deposits, eurodollar time
deposits, overnight bank deposits or bankers' acceptances
having maturities of not more than one year from the date
of acquisition thereof issued by any commercial
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bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof
by Standard & Poor's Ratings Services, or "A" or the
equivalent thereof by Xxxxx'x Investors Service, Inc., and
having combined capital and surplus in excess of $500
million;
(4) repurchase obligations with a term of not more than six
months for underlying securities of the types described in
clauses (1), (2) and (3) entered into with any bank meeting
the qualifications specified in clause (3) above;
(5) commercial paper rated at the time of acquisition thereof
at least "A-2" or the equivalent thereof by Standard &
Poor's Ratings Services or "P-2" or the equivalent thereof
by Xxxxx'x Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency,
if both of the two named rating agencies cease publishing
ratings of investments, and in any case maturing within one
year after the date of acquisition thereof; and
(6) interests in any investment company or money market fund
which invests 95% or more of its assets in instruments of
the type specified in clauses (1) through (5) above.
"CHANGE OF CONTROL" means:
(1) prior to the first public offering of Common Stock of the
Company or Holdings, the Permitted Holders cease to be the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of a
majority in the aggregate of the total voting power of the
Voting Stock of the Company or Holdings, whether as a
result of the issuance of securities of the Company or
Holdings, any merger, consolidation, liquidation or
dissolution of the Company or Holdings, any direct or
indirect transfer of securities by any Permitted Holder or
otherwise (for purposes of this clause (1) and clause (2)
below, the Permitted Holders shall be deemed to
beneficially own any Voting Stock of an entity (the
"specified entity") held by any other entity (the "parent
entity") so long as the Permitted Holders beneficially own
(as so defined), directly or indirectly, in the aggregate a
majority of the voting power of the Voting Stock of the
parent entity); or
(2) on the date of or after the first public offering of Common
Stock referred to in clause (1), (A) any "person" or
"group" of related persons (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than
one or more Permitted Holders, is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that such person or group shall be
deemed to have "beneficial ownership" of all shares that
any such person or group has the right to acquire, whether
such right is exercisable immediately or only after the
passage of time),
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directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company or Holdings
(or a successor to either of such entities by merger,
consolidation or purchase of all or substantially all of
its assets) (for the purposes of this clause, such person
or group shall be deemed to beneficially own any Voting
Stock of the Company or Holdings held by a parent entity,
if such person or group "beneficially owns" (as defined
above), directly or indirectly, more than 35% of the voting
power of the Voting Stock of such parent entity); and (B)
the Permitted Holders "beneficially own" (as defined in
Rules 13d-3 and 13d-5 of the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the
total voting power of the Voting Stock of the Company or
Holdings, as the case may be, (or a successor to the
relevant entity by merger, consolidation or purchase of all
or substantially all of its assets) than such other person
or group and do not have the right or ability by voting
power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the
Company or Holdings or such successor (for the purposes of
this clause, such other person or group shall be deemed to
beneficially own any Voting Stock of a specified entity
held by a parent entity, if such other person or group
"beneficially owns" directly or indirectly, more than 35%
of the voting power of the Voting Stock of such parent
entity and the Permitted Holders "beneficially own"
directly or indirectly, in the aggregate a lesser
percentage of the voting power of the Voting Stock of such
parent entity and do not have the right or ability by
voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of such
parent entity); or
(3) the first day on which a majority of the members of the
Board of Directors of the Company or Holdings are not
Continuing Directors; or
(4) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all
of the assets of Holdings or the Company and its Restricted
Subsidiaries taken as a whole to any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act)
other than a Permitted Holder; or
(5) the adoption by the stockholders of the Company or Holdings
of a plan or proposal for the liquidation or dissolution of
the Company or Holdings.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means with respect to any Person, any and all shares,
interest or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of such Person's common stock whether or not
outstanding on the Issue Date, and includes, without limitation, all series and
classes of such common stock.
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"CONSOLIDATED COVERAGE RATIO" means as of any date of determination,
with respect to any Person, the ratio of (x) the aggregate amount of
Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination for
which financial statements are in existence to (y) Consolidated Interest Expense
for such four fiscal quarters, PROVIDED, HOWEVER, that:
(1) if the Company or any Restricted Subsidiary:
(a) has Incurred any Indebtedness since the beginning of
such period that remains outstanding on such date of
determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage
Ratio is an Incurrence of Indebtedness, Consolidated
EBITDA and Consolidated Interest Expense for such
period will be calculated after giving effect on a
pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of
such period (except that in making such computation,
the amount of Indebtedness under any revolving
credit facility outstanding on the date of such
calculation will be deemed to be (i) the average
daily balance of such Indebtedness during such four
fiscal quarters or such shorter period for which
such facility was outstanding or (ii) if such
facility was created after the end of such four
fiscal quarters, the average daily balance of such
Indebtedness during the period from the date of
creation of such facility to the date of such
calculation) and the discharge of any other
Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on
the first day of such period; or
(b) has repaid, repurchased, defeased or otherwise
discharged any Indebtedness since the beginning of
the period that is no longer outstanding on such
date of determination or if the transaction giving
rise to the need to calculate the Consolidated
Coverage Ratio involves a discharge of Indebtedness
(in each case other than Indebtedness Incurred under
any revolving credit facility unless such
Indebtedness has been permanently repaid and the
related commitment terminated), Consolidated EBITDA
and Consolidated Interest Expense for such period
will be calculated after giving effect on a pro
forma basis to such discharge of such Indebtedness,
including with the proceeds of such new
Indebtedness, as if such discharge had occurred on
the first day of such period;
(2) if since the beginning of such period the Company or any
Restricted Subsidiary will have disposed of any company,
division, diagnostic imaging center, operating unit,
segment, business, group of related assets or line of
business or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is such an Asset
Disposition:
8
(a) the Consolidated EBITDA for such period will be
reduced by an amount equal to the Consolidated
EBITDA (if positive) directly attributable to the
assets which are the subject of such Asset
Disposition for such period or increased by an
amount equal to the Consolidated EBITDA (if
negative) directly attributable thereto for such
period; and
(b) Consolidated Interest Expense for such period will
be reduced by an amount equal to the Consolidated
Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted
Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection
with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is
sold, the Consolidated Interest Expense for such
period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company
and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such
sale);
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) will have
made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary or is merged
with or into the Company) or an acquisition of assets,
including any acquisition of assets occurring in connection
with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of
any company, division, diagnostic imaging center, operating
unit, segment, business, group of related assets or line of
business, Consolidated EBITDA and Consolidated Interest
Expense for such period will be calculated after giving pro
forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred
on the first day of such period; and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged
with or into the Company or any Restricted Subsidiary since
the beginning of such period) will have Incurred any
Indebtedness or discharged any Indebtedness, made any Asset
Disposition or any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (2) or
(3) above if made by the Company or a Restricted Subsidiary
during such period, Consolidated EBITDA and Consolidated
Interest Expense for such period will be calculated after
giving pro forma effect thereto as if such Incurrence,
discharge, Asset Disposition or Investment or acquisition
of assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations will
be determined in good faith by a responsible financial or accounting officer of
the Company. Any such pro forma calculations
9
may include operating expense reductions for such period resulting from the
acquisition which is being given pro forma effect that (a) would be permitted
pursuant to Article 11 of Regulation S-X under the Securities Act or (b) have
been realized or for which the steps necessary for realization have been taken
or are reasonably expected to be taken within six months following any such
acquisition, including, but not limited to, the execution or termination of any
contracts, the termination of any personnel or the closing (or approval by the
Board of Directors of any closing) of any diagnostic imaging center or facility,
as applicable, PROVIDED that such adjustments are set forth in an Officers'
Certificate signed by the Company's Chief Financial Officer and another Officer
which states (i) the amount of such adjustment or adjustments, (ii) that such
adjustment or adjustments are based on the reasonable good faith beliefs of the
Officers executing such Officers' Certificate at the time of such execution and
(iii) that any related Incurrence of Indebtedness is permitted pursuant to this
Indenture. In addition, to the extent not covered by the foregoing, if the
Transactions have occurred in the four quarter period used to determine the
Consolidated Coverage Ratio, then the Consolidated Coverage Ratio shall be
determined giving pro forma effect on the basis given in the Offering Memorandum
to the Transactions, with all calculations relating thereto to be made at the
date of determination by the Company's Chief Financial Officer, and set forth in
an Officers' Certificate signed by the Chief Financial Officer and another
Officer of the Company and meeting the requirements for the Officers'
Certificate described in the preceding sentence. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness will be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months). If any
Indebtedness that is being given pro forma effect bears an interest rate at the
option of the Company, the interest rate shall be calculated by applying such
optional rate chosen by the Company.
"CONSOLIDATED EBITDA" for any period means, without duplication, the
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income:
(1) Consolidated Interest Expense;
(2) Consolidated Income Taxes;
(3) consolidated depreciation expense;
(4) consolidated amortization of goodwill and other
intangibles;
(5) impairment charges recorded in connection with the
application of Financial Accounting Standards No. 142
"Goodwill and Other Intangibles";
(6) other non-cash charges reducing Consolidated Net Income
(excluding any such non-cash charge to the extent it
represents an accrual of or reserve for cash charges in any
future period or amortization of a prepaid cash expense
that was paid in a prior period not included in the
calculation);
10
(7) charges in an aggregate amount not to exceed $2.1 million
for litigation and other related expenses Incurred in
connection with INMED DIAGNOSTIC SERVICE, L.L.C. V.
MEDQUEST ASSOCIATES, INC., SIEMENS MEDICAL SYSTEMS, INC.,
PALMETTO IMAGING, INC. AND OPEN MRI OF XXXXXXXX, INC. as
more fully described in the Offering Memorandum, PROVIDED
that this clause (7) shall only be included in the
definition of "Consolidated EBITDA" until December 31,
2002; and
(8) charges in an aggregate amount not to exceed $2.9 million
for success fees to be paid to certain executive officers
and other employees of the Company in connection with the
Transactions; PROVIDED that this clause (8) shall only be
included in the definition of "Consolidated EBITDA" until
September 30, 2003.
Notwithstanding the preceding sentence, clauses (2) through (6) relating to
amounts of a Restricted Subsidiary of a Person will be added to Consolidated Net
Income to compute Consolidated EBITDA of such Person only to the extent (and in
the same proportion) that the net income (loss) of such Restricted Subsidiary
was included in calculating the Consolidated Net Income of such Person and, to
the extent the amounts set forth in clauses (2) through (6) are in excess of
those necessary to offset a net loss of such Restricted Subsidiary or if such
Restricted Subsidiary has net income for such period included in Consolidated
Net Income, 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.
"CONSOLIDATED INCOME TAXES" means, with respect to any Person for
any period, taxes imposed upon such Person or other payments required to be made
by such Person by any governmental authority which taxes or other payments are
calculated by reference to the income or profits of such Person or such Person
and its Restricted Subsidiaries (to the extent such income or profits were
included in computing Consolidated Net Income for such period), regardless of
whether such taxes or payments are required to be remitted to any governmental
authority.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, without
duplication, the total interest expense of the Company and its consolidated
Restricted Subsidiaries, whether paid or accrued, plus, to the extent not
included in such interest expense:
(1) interest expense attributable to Capitalized Lease
Obligations, determined as if such lease were a capitalized
lease in accordance with GAAP and the interest component of
any deferred payment obligations;
(2) amortization of debt discount and debt issuance cost
(PROVIDED that any amortization of bond premium will be
credited to reduce Consolidated Interest Expense unless,
pursuant to GAAP, such amortization of bond premium has
otherwise reduced Consolidated Interest Expense);
11
(3) non-cash interest expense;
(4) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance
financing;
(5) the 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;
(6) net costs associated with Hedging Obligations (including
amortization of fees), PROVIDED, HOWEVER, that if Hedging
Obligations result in net benefits rather than costs, such
benefits shall be credited to reduce Consolidated Interest
Expense unless, pursuant to GAAP, such net benefits are
otherwise reflected in Consolidated Net Income;
(7) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such
period;
(8) all dividends paid or declared to be paid in cash, Cash
Equivalents or Indebtedness on any series of Disqualified
Stock of the Company or on Preferred Stock of its
Restricted Subsidiaries that are not Subsidiary Guarantors
payable to a party other than the Company or a Wholly Owned
Subsidiary;
(9) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used
by such plan or trust to pay interest or fees to any Person
(other than the Company) in connection with Indebtedness
Incurred by such plan or trust; PROVIDED, HOWEVER, that
there will be excluded therefrom any such interest expense
of any Unrestricted Subsidiary to the extent the related
Indebtedness is not Guaranteed or paid by the Company or
any Restricted Subsidiary; and
(10) Receivables Fees.
For purposes of the foregoing, total interest expense will be determined after
giving effect to any net payments made or received by the Company and its
Subsidiaries with respect to Interest Rate Agreements. Notwithstanding anything
to the contrary contained herein, commissions, discounts, yield and other fees
and charges Incurred in connection with any transaction pursuant to which the
Company or any Subsidiary of the Company may sell, convey or otherwise transfer
or grant a security interest in any accounts receivable or related assets shall
be included in Consolidated Interest Expense.
"CONSOLIDATED NET INCOME" means, for any period, the net income
(loss) of the Company and its consolidated Restricted Subsidiaries determined in
accordance with GAAP; PROVIDED, HOWEVER, that there will not be included in such
Consolidated Net Income:
(1) any net income (loss) of any Person (other than the
Company) if such Person is not a Restricted Subsidiary,
except that:
12
(a) subject to the limitations contained in clauses (3),
(4) and (5) below, the Company's equity in the net
income of any such Person for such period will be
included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by
such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or
other distribution to a Restricted Subsidiary, to
the limitations contained in clause (2) below); and
(b) the Company's equity in a net loss of any such
Person (other than an Unrestricted Subsidiary) for
such period will be included in determining such
Consolidated Net Income to the extent such loss has
been funded with cash from the Company or a
Restricted Subsidiary;
(2) any net income (but not loss) of any Restricted Subsidiary
if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that:
(a) subject to the limitations contained in clauses (3),
(4) and (5) below, the Company's equity in the net
income of any such Restricted Subsidiary for such
period will be included in such Consolidated Net
Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary
during such period to the Company or another
Restricted Subsidiary as a dividend (subject, in the
case of a dividend to another Restricted Subsidiary,
to the limitation contained in this clause); and
(b) the Company's equity in a net loss of any such
Restricted Subsidiary for such period will be
included in determining such Consolidated Net
Income;
(3) any gain (loss) realized upon the sale or other disposition
of any property, plant or equipment of the Company or its
consolidated Restricted Subsidiaries (including pursuant to
any Sale/Leaseback Transaction) which is not sold or
otherwise disposed of in the ordinary course of business
and any gain (loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(4) any extraordinary gain or loss; and
(5) the cumulative effect of a change in accounting principles.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company or Holdings, as the case may be,
who (1) was a member of such Board of Directors on the date of this Indenture;
(2) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors
13
who were members of the relevant Board at the time of such nomination or
election; or (3) was elected to such Board of Directors in accordance with the
terms of the Stockholders' Agreement.
"CURRENCY AGREEMENT" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"DEFAULT" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"DEFINITIVE SECURITIES" means certificated Securities.
"DESIGNATED GUARANTOR SENIOR INDEBTEDNESS" means (1) the Bank
Indebtedness (to the extent such Bank Indebtedness constitutes Guarantor Senior
Indebtedness) and (2) any other Guarantor Senior Indebtedness which, at the date
of determination, has an aggregate principal amount outstanding of, or under
which, at the date of determination, the holders thereof are committed to lend
up to, at least $15.0 million and is specifically designated in the instrument
evidencing or governing such Guarantor Senior Indebtedness as "Designated
Guarantor Senior Indebtedness" for purposes of this Indenture.
"DESIGNATED SENIOR INDEBTEDNESS" means (1) the Bank Indebtedness (to
the extent such Bank Indebtedness constitutes Senior Indebtedness) and (2) any
other Senior Indebtedness which, at the date of determination, has an aggregate
principal amount outstanding of, or under which, at the date of determination,
the holders thereof are committed to lend up to, at least $15.0 million and is
specifically designated in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock of such Person which 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:
(1) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is
convertible or exchangeable solely at the option of the
Company or a Restricted Subsidiary); or
(3) is redeemable at the option of the holder of the Capital
Stock thereof, in whole or in part,
in each case on or prior to the date that is 91 days after the earlier of the
date (a) of the Stated Maturity of the Securities or (b) on which there are no
Securities outstanding, PROVIDED that only the portion of Capital Stock which so
matures or is mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such date will be
14
deemed to be Disqualified Stock; PROVIDED, FURTHER, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or asset sale (each defined in a substantially
identical manner to the corresponding definitions in this Indenture) shall not
constitute Disqualified Stock if the terms of such Capital Stock (and all such
securities into which it is convertible or for which it is ratable or
exchangeable) provide that the Company may not repurchase or redeem any such
Capital Stock (and all such securities into which it is convertible or for which
it is ratable or exchangeable) pursuant to such provision prior to compliance by
the Company with the provisions of this Indenture described under SECTIONS 3.7
AND 3.9 and such repurchase or redemption complies with SECTION 3.4.
"DOMESTIC RESTRICTED SUBSIDIARY" means a Restricted Subsidiary of
the Company organized and existing under the laws of the United States of
America, any state of the United States of America or the District of Columbia.
"DTC" means The Depository Trust Company, its nominees and their
respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"EQUITY OFFERING" means any public or private offering for cash by
the Company or Holdings, as the case may be, of its common stock, or options,
warrants or rights with respect to its common stock (other than a registered
offering on Form S-4 or S-8).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" shall have the meaning set forth in the
Registration Rights Agreement.
"EXCLUDED CONTRIBUTION" means Net Cash Proceeds received by the
Company from (a) contributions to its common equity capital and (b) the sale
(other than to a Subsidiary of the Company or to any Company or Subsidiary
management equity plan or stock option plan or any other management or employee
benefit plan or agreement) of Capital Stock (other than Disqualified Stock) of
the Company, in each case designated as Excluded Contributions pursuant to an
Officers' Certificate executed on the date such capital contributions are made
or the date such Capital Stock is sold, as the case may be, which are excluded
from the calculation set forth in clause (c)(ii) of SECTION 3.4(a).
"EXISTING MANAGEMENT STOCKHOLDERS" means each of Xxxx Xxxxxxx, X.X.
(Xxx) Xxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxx.
"FAIR MARKET VALUE" means the price that could be negotiated in an
arm's-length free market transaction, for cash, between a willing seller and a
willing and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction. Unless otherwise expressly required in this Indenture,
fair market value shall be determined conclusively by the Board of Directors of
the Company acting reasonably and in good faith.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in the opinions and
15
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession. All ratios and
computations based on GAAP contained in this Indenture will be computed in
conformity with GAAP.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such other
Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise);
or
(2) entered into for purposes of assuring in any other manner
the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in
whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" will not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"GUARANTOR" means each of Holdings and the Subsidiary Guarantors.
"GUARANTOR SENIOR INDEBTEDNESS" means, with respect to a Guarantor,
the following obligations, whether outstanding on the date of this Indenture or
thereafter issued, created, Incurred or assumed, without duplication:
(1) any Guarantee of the Bank Indebtedness by such Guarantor
and all other Guarantees by such Guarantor of Senior
Indebtedness of the Company or Guarantor Senior
Indebtedness of any other Guarantor; and
(2) all obligations consisting of principal of and premium, if
any, accrued and unpaid interest on, and fees and other
amounts relating to, all other Indebtedness of the
Guarantor. Guarantor Senior Indebtedness includes interest
accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor
regardless of whether postfiling interest is allowed in
such proceeding.
Notwithstanding anything to the contrary in the preceding paragraph, Guarantor
Senior Indebtedness will not include:
(1) any Indebtedness Incurred in violation of this Indenture,
unless such Indebtedness was Incurred based on an Officers'
Certificate (delivered in good faith after reasonable
investigation) to the effect that the Incurrence of such
Indebtedness did not violate the provisions of this
Indenture;
16
(2) any obligations of such Guarantor to another Subsidiary or
the Company;
(3) any liability for Federal, state, local, foreign or other
taxes owed or owing by such Guarantor;
(4) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such
liabilities);
(5) any Indebtedness, Guarantee or obligation of such Guarantor
that is expressly subordinate or junior in right of payment
to any other Indebtedness, Guarantee or obligation of such
Guarantor, including, without limitation, any Guarantor
Senior Subordinated Indebtedness and Guarantor Subordinated
Obligations of such Guarantor; or
(6) any Capital Stock.
"GUARANTOR SENIOR SUBORDINATED INDEBTEDNESS" means, with respect to
a Guarantor, the obligations of such Guarantor under the Notes Guarantee and any
other Indebtedness of such Guarantor (whether outstanding on the Issue Date or
thereafter Incurred) that specifically provides that such Indebtedness is to
rank equally in right of payment with the obligations of such Guarantor under
the Notes Guarantee and is not expressly subordinated by its terms in right of
payment to any Indebtedness of such Guarantor which is not Guarantor Senior
Indebtedness of such Guarantor.
"GUARANTOR SUBORDINATED OBLIGATION" means, with respect to a
Guarantor, any Indebtedness of such Guarantor (whether outstanding on the Issue
Date or thereafter Incurred) which is expressly subordinate in right of payment
to the obligations of such Guarantor under its Notes Guarantee pursuant to a
written agreement.
"HEDGING OBLIGATIONS" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"HOLDINGS" means MQ Associates, Inc., a Delaware corporation, and
its successors.
"INCUR" means issue, create, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) will be deemed to
be Incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary; and the terms "Incurred" and "Incurrence" have meanings correlative
to the foregoing.
"INDEBTEDNESS" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
17
(2) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) the principal component of all obligations of such Person
in respect of letters of credit, bankers' acceptances or
other similar instruments (including reimbursement
obligations with respect thereto except to the extent such
reimbursement obligation relates to a trade payable and
such obligation is satisfied within 30 days of Incurrence);
(4) the principal component of all obligations of such Person
to pay the deferred and unpaid purchase price of property
(except trade payables and healthcare fees owed to
physicians), which purchase price is due more than six
months after the date of placing such property in service
or taking delivery and title thereto;
(5) Capitalized Lease Obligations of such Person;
(6) the principal component or liquidation preference of all
obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary that is not a Subsidiary
Guarantor, any Preferred Stock (but excluding, in each
case, any accrued dividends);
(7) the principal component of all Indebtedness of other
Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person;
PROVIDED, HOWEVER, that the amount of such Indebtedness
will be the lesser of (a) the fair market value of such
asset at such date of determination and (b) the amount of
such Indebtedness of such other Persons;
(8) the principal component of Indebtedness of other Persons to
the extent Guaranteed by such Person;
(9) to the extent not otherwise included in this definition,
net obligations of such Person under Currency Agreements
and Interest Rate Agreements (the amount of any such
obligations to be equal at any time to the termination
value of such agreement or arrangement giving rise to such
obligation that would be payable by such Person at such
time); and
(10) to the extent not otherwise included, the amount then
outstanding (i.e., advanced, and received by, and available
for use by such Person) under any receivables financing (as
set forth in the books and records of such Person and
confirmed by the agent, trustee or other representative of
the institution or group providing such receivables
financing).
Notwithstanding the foregoing, "Indebtedness" shall not include unsecured
indebtedness of the Company and its Restricted Subsidiaries Incurred to finance
insurance premiums in a principal amount not in excess of the insurance premiums
to be paid by the Company and its Restricted
18
Subsidiaries for a three-year period beginning on the date of Incurrence of any
such Indebtedness.
The amount of Indebtedness of any Person at any date will be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
In addition, "Indebtedness" of any Person shall include Indebtedness
described in the preceding paragraph that would not appear as a liability on the
balance sheet of such Person if:
(1) such Indebtedness is the obligation of a partnership or
joint venture that is not a Restricted Subsidiary (a "Joint
Venture");
(2) such Person or a Restricted Subsidiary of such Person is a
general partner of the Joint Venture (a "General Partner");
and
(3) there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or
assets of such Person or a Restricted Subsidiary of such
Person; and then such Indebtedness shall be included in an
amount not to exceed:
(a) the lesser of (i) the net assets of the General
Partner and (ii) the amount of such obligations to
the extent that there is recourse, by contract or
operation of law, to the property or assets of such
Person or a Restricted Subsidiary of such Person; or
(b) if less than the amount determined pursuant to
clause (a) immediately above, the actual amount of
such Indebtedness that is recourse to such Person or
a Restricted Subsidiary of such Person, if the
Indebtedness is evidenced by a writing and is for a
determinable amount and the related interest expense
shall be included in Consolidated Interest Expense
to the extent actually paid by the Company or its
Restricted Subsidiaries.
"INDENTURE" means this Indenture as amended or supplemented from
time to time.
"INITIAL SECURITIES" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
"INTANGIBLE ASSETS" means goodwill, patents, trademarks and other
intangibles as determined in accordance with GAAP.
"INTEREST RATE AGREEMENT" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge
19
agreement or other similar agreement or arrangement as to which such Person is
party or a beneficiary.
"INVESTMENT" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of any direct or
indirect advance, loan (other than advances or extensions of credit to customers
in the ordinary course of business) or other extension of credit (including by
way of Guarantee or similar arrangement, but excluding any debt or extension of
credit represented by a bank deposit other than a time deposit) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar
instruments issued by, such Person and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
PROVIDED that none of the following will be deemed to be an Investment:
(1) Hedging Obligations entered into in the ordinary course of
business and in compliance with this Indenture;
(2) endorsements of negotiable instruments and documents in the
ordinary course of business; and
(3) an acquisition of assets, Capital Stock or other securities
by the Company or a Subsidiary for consideration to the
extent such consideration consists of common equity
securities of the Company.
For purposes of SECTION 3.4:
(1) "Investment" will include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair
market value of the net assets of such Restricted
Subsidiary of the Company at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary;
PROVIDED, HOWEVER, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company will be
deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary in an amount (if positive) equal to
(a) the Company's "Investment" in such Subsidiary at the
time of such redesignation less (b) the portion
(proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets (as
conclusively determined by the Board of Directors of the
Company in good faith) of such Subsidiary at the time that
such Subsidiary is so re-designated a Restricted
Subsidiary; and
(2) any property transferred to or from an Unrestricted
Subsidiary will 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. If the
Company or any Restricted Subsidiary of the Company sells
or otherwise disposes of any Voting Stock of any Restricted
Subsidiary of the Company such that, after giving effect to
any such sale or disposition,
20
such entity is no longer a Subsidiary of the Company, the
Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair
market value (as conclusively determined in good faith by
(a) the senior management of the Company if the amount
thereof is less than $2.0 million and (b) the Board of
Directors of the Company if in excess thereof) of the
Capital Stock of such Subsidiary not sold or disposed of.
"ISSUE DATE" means the date on which the Initial Securities are
originally issued.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"NET AVAILABLE CASH" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and net
proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring person of
Indebtedness or other obligations relating to the properties or assets that are
the subject of such Asset Disposition or received in any other noncash form)
therefrom, in each case net of:
(1) all legal, accounting, investment banking, title and
recording tax expenses, commissions and other fees and
expenses Incurred, and all Federal, state, provincial,
foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any
available tax credits or deductions and any tax sharing
agreements), as a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by
any assets subject to such Asset Disposition, in accordance
with the terms of any Lien upon such assets, or which must
by its terms, or in order to obtain a necessary consent to
such Asset Disposition, or by applicable law be repaid out
of the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures
as a result of such Asset Disposition; and
(4) the deduction of appropriate amounts to be provided by the
seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such
Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"NET CASH PROCEEDS", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, listing fees,
discounts or commissions and brokerage, consultant and other fees and charges
actually Incurred in connection with such issuance or sale and net of taxes
21
paid or payable as a result of such issuance or sale (after taking into account
any available tax credit or deductions and any tax sharing arrangements).
"NON-RECOURSE DEBT" means Indebtedness of a Person:
(1) as to which neither the Company nor any Restricted
Subsidiary (a) provides any Guarantee or credit support of
any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness)
or (b) is directly or indirectly liable (as a guarantor or
otherwise);
(2) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action
against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to
declare a default under such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to
its stated maturity; and
(3) the explicit terms of which provide there is no recourse
against any of the assets of the Company or its Restricted
Subsidiaries (other than recourse against a pledge of the
Capital Stock of such Person to the extent such Capital
Stock constitutes an asset of the Company or any of its
Restricted Subsidiaries).
"NON-U.S. PERSON" means a person who is not a U.S. person, as
defined in Regulation S.
"NOTES GUARANTEE" means, individually, any Guarantee of payment of
the Securities by Holdings or a Subsidiary Guarantor pursuant to the terms of
this Indenture and any supplemental indenture thereto, and, collectively, all
such Guarantees. Each such Notes Guarantee will be in the form prescribed by
this Indenture.
"NOTE REGISTER" means the register of Securities, maintained by the
Trustee, pursuant to SECTION 2.3.
"OFFERING MEMORANDUM" means the offering memorandum, dated August 8,
2002, relating to the offering by the Company of $180.0 million of the 11 7/8%
Senior Subordinated Notes due 2012.
"OFFICER" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary of the Company. The term Officer of any Guarantor has
a correlative meaning.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company.
22
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"PERMITTED HOLDERS" means each of X.X. Xxxxxx Partners, LLC, the
Existing Management Stockholders and each of their respective Affiliates and
Related Persons.
"PERMITTED INVESTMENT" means an Investment by the Company or any
Restricted Subsidiary in:
(1) a Restricted Subsidiary (other than a Receivables Entity)
or a Person which will, upon the making of such Investment,
become a Restricted Subsidiary (other than a Receivables
Entity); PROVIDED, HOWEVER, that the primary business of
such Restricted Subsidiary is a Related Business;
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers
or conveys all or substantially all its assets to, the
Company or a Restricted Subsidiary (other than a
Receivables Entity); PROVIDED, HOWEVER, that such Person's
primary business is a Related Business;
(3) cash and Cash Equivalents;
(4) receivables owing to the Company or any Restricted
Subsidiary created or acquired, and other extensions of
trade credit and other advances to customers and suppliers,
in each case, in the ordinary course of business and
payable or dischargeable in accordance with customary trade
terms (including, without limitation, receivables owing to
the Company or any Restricted Subsidiary by physicians on
account of prior advances made by the Company); PROVIDED,
HOWEVER, that such trade terms may include such
concessionary trade terms as the Company or any such
Restricted Subsidiary deems reasonable under the
circumstances;
(5) pledges, deposits and similar arrangements with respect to
leases and utilities in the ordinary course of business;
(6) payroll, travel and similar advances or loans to cover
matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of
business;
(7) loans or advances to officers, directors, consultants and
employees made (a) in the ordinary course of business of
the Company or such Restricted Subsidiary and not exceeding
$3.0 million at any one time outstanding and (b) to fund
purchases of stock under the stock option plan of Holdings
to be adopted following the Issue Date and any similar
stock ownership plans or under employment arrangements;
23
(8) Capital Stock, obligations or securities received in
settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments or pursuant to
any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of a debtor;
(9) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to
and in compliance with SECTION 3.7;
(10) Investments in existence on the Issue Date;
(11) Currency Agreements, Interest Rate Agreements and related
Hedging Obligations, which transactions or obligations are
Incurred in compliance with SECTION 3.3;
(12) Investments by the Company or any of its Restricted
Subsidiaries, together with all other Investments pursuant
to this clause (12), in an aggregate amount at the time of
such Investment not to exceed $10.0 million outstanding at
any one time;
(13) Guarantees issued in accordance with SECTION 3.3;
(14) Investments by the Company or a Restricted Subsidiary in a
Receivables Entity or any Investment by a Receivables
Entity in any other Person, in each case, in connection
with a Qualified Receivables Transaction, PROVIDED,
HOWEVER, that any Investment in any such Person is in the
form of a Purchase Money Note, or any equity interest or
interests in accounts receivable and related assets
generated by the Company or a Restricted Subsidiary and
transferred to any Person in connection with a Qualified
Receivables Transaction or any such Person owning such
accounts receivable;
(15) Investments of a Person or any of its Subsidiaries existing
at the time such Person becomes a Restricted Subsidiary of
the Company or at the time such Person merges or
consolidates with the Company or any of its Restricted
Subsidiaries, in either case in compliance with this
Indenture, PROVIDED that such Investments were not made by
such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such merger or consolidation;
(16) Investments in Unrestricted Subsidiaries not to exceed $5.0
million since the Issue Date, plus (a) the aggregate net
after-tax amount returned since the Issue Date to the
Company or any Restricted Subsidiary in cash on or with
respect to any Investments made since the Issue Date in
Unrestricted Subsidiaries whether through interest
payments, principal payments, dividends or other
distributions or payments (including such dividends,
24
distributions or payments made concurrently with such
Investment), (b) the net after-tax cash proceeds received
since the Issue Date by the Company or any Restricted
Subsidiary from the disposition of all or any portion of
such Investments (other than to the Company or a Subsidiary
of the Company) and (c) upon redesignation since the Issue
Date of an Unrestricted Subsidiary as a Restricted
Subsidiary, the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market
value of the net assets (as conclusively determined by the
Board of Directors of the Company in good faith) of such
Subsidiary at the time that such Subsidiary is so
re-designated a Restricted Subsidiary; and
(17) Investments by the Company or any of its Restricted
Subsidiaries in a Permitted Joint Venture, together with
all other Investments pursuant to this clause (17) in an
aggregate amount at the time of such Investment not to
exceed $2.5 million outstanding at any one time, so long as
(a) such Permitted Joint Venture does not have any
Indebtedness for borrowed money at any time on or after the
date of such Investment (other than Indebtedness owing to
the equity holders of such Permitted Joint Venture, the
Company or any Restricted Subsidiary of the Company), (b)
the documentation governing such Permitted Joint Venture
does not contain a restriction on distributions to the
Company or its Restricted Subsidiaries, (c) such Permitted
Joint Venture is engaged only in a Related Business and (d)
after giving pro forma effect to such Investment, the
Company would be permitted to Incur $1.00 of additional
Indebtedness under the first paragraph of SECTION 3.3.
"PERMITTED JOINT VENTURE" means, with respect to any Person, (1) any
corporation, association, or other business entity (other than a partnership) of
which 50% or less 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 of determination owned or
controlled, directly or indirectly, by such Person or one or more of the
Restricted Subsidiaries of that Person or a combination thereof and (2) any
partnership, joint venture, limited liability company or similar entity of which
50% or less of the capital accounts, distribution rights, total equity and
voting interests or general or limited partnership interests, as applicable, are
owned or controlled, directly or indirectly, by such Person or one or more of
the other Restricted Subsidiaries of that Person or a combination thereof
whether in the form of membership, general, special or limited partnership
interests or otherwise.
"PERMITTED LIENS" means, with respect to any Person:
(1) Liens securing Indebtedness and other obligations of the
Company under the Senior Credit Agreement and related
Interest Rate Agreements and other Senior Indebtedness and
liens on assets of Restricted Subsidiaries securing
Guarantees of Indebtedness and other obligations of the
Company under the Senior Credit Agreement and other
Guarantor Senior Indebtedness permitted to be Incurred
under this Indenture;
25
(2) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such
Person or deposits or cash or United States government
bonds to secure surety or appeal bonds to which such Person
is a party, or deposits as security for contested taxes or
import or customs duties or for the payment of rent, in
each case Incurred in the ordinary course of business;
(3) Liens imposed by law, including carriers', warehousemen's
and mechanics' Liens, in each case for sums not yet due or
being contested in good faith by appropriate proceedings if
a reserve or other appropriate provisions, if any, as shall
be required by GAAP shall have been made in respect
thereof;
(4) Liens for taxes, assessments or other governmental charges
not yet subject to penalties for non-payment or which are
being contested in good faith by appropriate proceedings
PROVIDED that appropriate reserves required pursuant to
GAAP have been made in respect thereof;
(5) Liens in favor of issuers of surety or performance bonds or
letters of credit or bankers' acceptances issued pursuant
to the request of and for the account of such Person in the
ordinary course of its business; PROVIDED, HOWEVER, that
such letters of credit do not constitute Indebtedness;
(6) encumbrances, easements or reservations of, or rights of
others for, licenses, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of
real properties or liens incidental to the conduct of the
business of such Person or to the ownership of its
properties which do not in the aggregate materially
adversely affect the value of said properties or materially
impair their use in the operation of the business of such
Person;
(7) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under this
Indenture, secured by a Lien on the same property securing
such Hedging Obligation;
(8) leases, licenses, subleases and sublicenses of assets
(including, without limitation, real property and
intellectual property rights) which do not materially
interfere with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries;
(9) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for
the review of such judgment have not been
26
finally terminated or the period within which such
proceedings may be initiated has not expired;
(10) Liens for the purpose of securing the payment of all or a
part of the purchase price of, or Capitalized Lease
Obligations with respect to, assets or property acquired or
constructed in the ordinary course of business, PROVIDED
that:
(a) the aggregate principal amount of Indebtedness
secured by such Liens is otherwise permitted to be
Incurred under this Indenture and does not exceed
the cost of the assets or property so acquired or
constructed; and
(b) such Liens are created within six months of
construction or acquisition of such assets or
property and do not encumber any other assets or
property of the Company or any Restricted Subsidiary
other than such assets or property and assets
affixed or appurtenant thereto and such other assets
financed by, and a Lien permitted hereunder granted
in favor of, the same financing source;
(11) Liens arising solely by virtue of any statutory or common
law provisions relating to banker's Liens, rights of
set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depositary
institution; PROVIDED that:
(a) such deposit account is not a dedicated cash
collateral account and is not subject to
restrictions against access by the Company in excess
of those set forth by regulations promulgated by the
Federal Reserve Board; and
(b) such deposit account is not intended by the Company
or any Restricted Subsidiary to provide collateral
to the depository institution;
(12) Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into
by the Company and its Restricted Subsidiaries in the
ordinary course of business;
(13) Liens existing on the Issue Date;
(14) Liens on property or shares of stock of a Person at the
time such Person becomes a Restricted Subsidiary; PROVIDED,
HOWEVER, that such Liens are not created, Incurred or
assumed in connection with, or in contemplation of, such
other Person becoming a Restricted Subsidiary; PROVIDED,
FURTHER, HOWEVER, that any such Lien may not extend to any
other property owned by the Company or any Restricted
Subsidiary;
27
(15) Liens on property at the time the Company or a Restricted
Subsidiary acquired the property, including any acquisition
by means of a merger or consolidation with or into the
Company or any Restricted Subsidiary; PROVIDED, HOWEVER,
that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such acquisition;
PROVIDED, FURTHER, HOWEVER, that such Liens may not extend
to any other property owned by the Company or any
Restricted Subsidiary except assets financed by, and a Lien
permitted hereunder granted in favor of, the same financing
source;
(16) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or a Wholly
Owned Subsidiary (other than a Receivable Entity);
(17) Liens securing the Securities and Notes Guarantees;
(18) Liens securing Refinancing Indebtedness Incurred to
refinance Indebtedness (including, without limitation,
Acquired Indebtedness) that was previously so secured,
PROVIDED that any such Lien is limited to all or part of
the same property or assets (plus improvements, accessions,
proceeds or dividends or distributions in respect thereof)
that secured (or, under the written arrangements under
which the original Lien arose, could secure) the
Indebtedness being refinanced or is in respect of property
that is the security for a Permitted Lien hereunder;
(19) any interest or title of a lessor under any Capitalized
Lease Obligation or operating lease; and
(20) Liens on assets transferred to a Receivables Entity or on
assets of a Receivables Entity, in either case Incurred in
connection with a Qualified Receivables Transaction.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, government or any agency or political subdivision
hereof or any other entity.
"PREFERRED STOCK", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"PURCHASE MONEY NOTE" means a promissory note of a Receivables
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Restricted Subsidiary of the Company in connection with a Qualified
Receivables Transaction to a Receivables Entity, which note is repayable from
cash available to the Receivables Entity, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts
28
owing to such investors and amounts paid in connection with the purchase of
newly generated accounts receivable.
"QUALIFIED PUBLIC OFFERING" means the first firm commitment
underwritten public offering pursuant to an effective registration statement
filed on Form S-1 (or its successor form) under the Securities Act underwritten
by a nationally-recognized underwriter satisfactory to the holders of a majority
of the shares of Holdings' Common Stock, par value $0.001 per share, and
Holdings' Class A Common Stock, par value $0.001 per share, (voting together as
a single class) resulting in aggregate proceeds (net of underwriting discounts
and commissions) to Holdings of not less than $50.0 million.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or series
of transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (1) a Receivables Entity (in the case
of a transfer by the Company or any of its Restricted Subsidiaries) and (2) any
other Person (in the case of a transfer by a Receivables Entity), or may grant a
security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, the proceeds of such receivables and
other assets which are customarily transferred, or in respect of which security
interests are customarily granted in connection with asset securitization
involving accounts receivable.
"QUALIFIED STOCK" means any Capital Stock that is not Disqualified
Stock.
"RECAPITALIZATION AGREEMENT" means the Recapitalization Agreement,
dated as of July 16, 2002, as amended as of August 8, 2002, among MQ Investment
Holdings, LLC, Holdings, the stockholders of Holdings signatory thereto and
Xxxxx Xxxx and Xxxx Xxxxxxx, as the stockholders' representatives.
"RECEIVABLE" means a right to receive payment arising from a sale or
lease of goods or services by a Person pursuant to an arrangement with another
Person pursuant to which such other Person is obligated to pay for goods or
services under terms that permit the purchase of such goods and services on
credit.
"RECEIVABLES ENTITY" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Restricted Subsidiary of the
Company makes an Investment and to which the Company or any Restricted
Subsidiary of the Company transfers accounts receivable and related assets)
which engages in no activities other than in connection with the financing of
accounts receivable and which is designated by the Board of Directors of the
Company (as provided below) as a Receivables Entity:
(1) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which:
(a) is guaranteed by the Company or any Restricted
Subsidiary of the Company (excluding guarantees of
obligations (other than the
29
principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings);
(b) is recourse to or obligates the Company or any
Restricted Subsidiary of the Company in any way
other than pursuant to Standard Securitization
Undertakings; or
(c) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;
(2) with which neither the Company nor any Restricted
Subsidiary of the Company has any material contract,
agreement, arrangement or understanding (except in
connection with a Purchase Money Note or Qualified
Receivables Transaction) other than on terms no less
favorable to the Company or such Restricted Subsidiary than
those that might be obtained at the time from Persons that
are not Affiliates of the Company, other than fees payable
in the ordinary course of business in connection with
servicing accounts receivable; and
(3) to which neither the Company nor any Restricted Subsidiary
of the Company has any obligation to maintain or preserve
such entity's financial condition or cause such entity to
achieve certain levels of operating results.
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
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"RECEIVABLES FEES" means any discount from the face amount of
Receivables or participations therein transferred in connection with a Qualified
Receivables Transaction, factoring agreement or other similar arrangement.
"REFINANCING INDEBTEDNESS" means Indebtedness that is Incurred to
refund, refinance, replace, exchange, renew, repay, retire or extend (including
pursuant to any defeasance or discharge mechanism) (collectively, "refinance,"
"refinances," and "refinanced" shall have a correlative meaning) any
Indebtedness existing on the date of this Indenture or Incurred in compliance
with this Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Refinancing Indebtedness, PROVIDED,
HOWEVER, that:
(1) (a) if the Stated Maturity of the Indebtedness being
refinanced is earlier than the Stated Maturity of the
Securities, the Refinancing Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the
30
Indebtedness being refinanced or (b) if the Stated Maturity
of the Indebtedness being refinanced is later than the
Stated Maturity of the Securities, the Refinancing
Indebtedness has a Stated Maturity at least 91 days later
than the Stated Maturity of the Securities;
(2) the Refinancing Indebtedness has an Average Life at the
time such Refinancing Indebtedness is Incurred that is
equal to or greater than the Average Life of the
Indebtedness being refinanced;
(3) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or
less than the sum of the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted
value) then outstanding of Indebtedness being refinanced
(plus, without duplication, any additional Indebtedness
Incurred to pay interest or premiums required by the
instruments governing such existing Indebtedness and fees,
commissions and other issuance costs Incurred in connection
therewith); and
(4) if the Indebtedness being refinanced is subordinated in
right of payment to the Securities or the Notes Guarantee,
such Refinancing Indebtedness is subordinated in right of
payment to the Securities or the Notes Guarantee 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.
"REGISTRATION RIGHTS AGREEMENT" means that certain registration
rights agreement dated as of the date of this Indenture by and among the
Company, the Guarantors and the initial purchasers set forth therein and future
registration rights agreements with respect to Additional Securities.
"RELATED BUSINESS" means any business which is the same as or
related, ancillary or complementary to or a reasonable extension of any of the
businesses of the Company and its Restricted Subsidiaries on the date of this
Indenture, in each case, as determined conclusively and in good faith by the
Company's Board of Directors.
"RELATED PERSON" with respect to any Permitted Holder means:
(1) any controlling stockholder or a majority (or more) owned
Subsidiary of such Permitted Holder or, in the case of an
individual, any spouse or immediate family member of such
Permitted Holder, any trust created for the benefit of such
individual or such individual's estate, executor,
administrator, committee or beneficiaries; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons
beneficially holding a majority (or more) controlling
interest of which consist of such Permitted Holder and/or
such other Persons referred to in the immediately preceding
clause (1).
31
"REPRESENTATIVE" means any trustee, agent or representative (if any)
of an issue of Senior Indebtedness or Guarantor Senior Indebtedness; PROVIDED
that when used in connection with the Senior Credit Agreement, the term
"Representative" shall refer to the administrative agent under the Senior Credit
Agreement.
"RESTRICTED INVESTMENT" means any Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"SALE/LEASEBACK TRANSACTION" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person, other than leases between the Company and
a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES CUSTODIAN" means the custodian with respect to the
Global Security (as appointed by DTC), or any successor Person thereto and shall
initially be the Trustee.
"SECURITYHOLDER" or "HOLDER" means the Person in whose name a
Security is registered in the Note Register.
"SENIOR CREDIT AGREEMENT" means, with respect to the Company, one or
more debt facilities (including, without limitation, the Credit Agreement to be
entered into among the Company, Holdings, Wachovia Bank, National Association,
as Administrative Agent, and the lenders parties thereto from time to time) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time (and whether or not with the original
administrative agent and lenders or one or more other representatives or other
lenders, investors or other providers of funds or otherwise and whether provided
under the original Senior Secured Credit Agreement or any other credit or other
agreement or indenture).
"SENIOR INDEBTEDNESS" means, whether outstanding on the Issue Date
or thereafter issued, created, Incurred or assumed, the Bank Indebtedness and
all amounts payable by the Company under or in respect of all other Indebtedness
of the Company, including premiums and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company at the rate specified in the
documentation with respect thereto whether or not a claim for post filing
interest is allowed in such proceeding), fees, charges, expenses, reimbursement
obligations and guarantees relating thereto; PROVIDED, HOWEVER, that Senior
Indebtedness will not include:
32
(1) any Indebtedness Incurred in violation of this Indenture,
unless such Indebtedness was Incurred based on an Officers'
Certificate of the Company (delivered in good faith after
reasonable investigation) to the effect that the Incurrence
of such Indebtedness did not violate the provisions of this
Indenture;
(2) any obligation of the Company to any Subsidiary;
(3) any liability for Federal, state, foreign, local or other
taxes owed or owing by the Company;
(4) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such
liabilities);
(5) any Indebtedness, Guarantee or obligation of the Company
that is expressly subordinate or junior in right of payment
to any other Indebtedness, Guarantee or obligation of the
Company, including, without limitation, any Senior
Subordinated Indebtedness and any Subordinated Obligations;
or
(6) any Capital Stock.
"SENIOR SUBORDINATED INDEBTEDNESS" means the Securities and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank equally with the Securities in right of payment and is
not expressly subordinated or junior by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior Indebtedness
of the Company.
"SERIES A PREFERRED STOCK" means the new series of Series A
Redeemable Preferred Stock, par value $0.001 per share, of Holdings to be issued
pursuant to the Transactions.
"SERIES B PREFERRED STOCK" means the new series of Series B
Redeemable Preferred Stock, par value $0.001 per share, of Holdings to be issued
pursuant to the Transactions.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably customary in
securitization of accounts receivable transactions.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision, but shall not include any contingent
33
obligations to repay, redeem or repurchase any such principal prior to the date
originally scheduled for the payment thereof.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement, dated
as of the Issue Date, among Holdings and each of the stockholders parties
thereto, as in effect on the Issue Date and as further amended and modified from
time to time so long as the Permitted Holders beneficially own a majority of the
Capital Stock of the Company.
"SUBORDINATED OBLIGATION" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
expressly subordinated or junior in right of payment to the Securities pursuant
to a written agreement.
"SUBSIDIARY" of any Person means any corporation, association,
partnership, joint venture, limited liability company or other business entity
of which more than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership and joint venture interests) 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 (1) such Person, (2) such Person and one or more
Subsidiaries of such Person or (3) one or more Subsidiaries of such Person.
Unless otherwise specified herein, each reference to a Subsidiary will refer to
a Subsidiary of the Company.
"SUBSIDIARY GUARANTOR" means each Subsidiary of the Company in
existence on the Issue Date and any Restricted Subsidiary created or acquired by
the Company after the Issue Date other than a Receivables Entity.
"TANGIBLE ASSETS" means Total Assets less Intangible Assets.
"TOTAL ASSETS" means the total consolidated assets of the Company
and its Restricted Subsidiaries, as shown on the most recent balance sheet of
the Company.
"TIA" or "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb), as in effect on the date of this Indenture.
"TRANSACTIONS" means collectively, the offering of the Securities,
the recapitalization pursuant to the Recapitalization Agreement and the
borrowings under the Senior Credit Agreement, each as described in the Offering
Memorandum.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TRUST OFFICER" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.
34
"UNRESTRICTED SUBSIDIARY" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted
Subsidiary by the Board of Directors of the Company in the
manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary or a
Person becoming a Subsidiary through merger or consolidation or Investment
therein) to be an Unrestricted Subsidiary only if:
(1) such Subsidiary or any of its Subsidiaries does not own any
Capital Stock or Indebtedness of or have any Investment in,
or own or hold any Lien on any property of, any other
Subsidiary of the Company which is not a Subsidiary of the
Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary;
(2) all the Indebtedness of such Subsidiary and its
Subsidiaries shall, at the date of designation, and will at
all times thereafter, consist of Non-Recourse Debt;
(3) such designation and the Investment of the Company in such
Subsidiary complies with SECTION 3.4;
(4) such Subsidiary, either alone or in the aggregate with all
other Unrestricted Subsidiaries, does not operate, directly
or indirectly, all or substantially all of the business of
the Company and its Subsidiaries;
(5) such Subsidiary is a Person with respect to which neither
the Company nor any of its Restricted Subsidiaries has any
direct or indirect obligation:
(a) to subscribe for additional Capital Stock of such
Person; or
(b) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any
specified levels of operating results; and
(6) on the date such Subsidiary is designated an Unrestricted
Subsidiary, such Subsidiary is not a party to any
agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary with terms
substantially less favorable to the Company than those that
might have been obtained from Persons who are not
Affiliates of the Company.
Any such designation by the Board of Directors of the Company shall
be evidenced to the Trustee by filing with the Trustee a resolution of the Board
of Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complies with the foregoing
conditions. If, at any time, any Unrestricted Subsidiary
35
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
as of such date.
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and the Company could
Incur at least $1.00 of additional Indebtedness under the first paragraph of
SECTION 3.3 on a pro forma basis taking into account such designation.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligations or a specific payment of principal of or interest on any
such U.S. Government Obligations held by such custodian for the account of the
holder of such depository receipt; PROVIDED that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligations or the specific payment
of principal of or interest on the U.S. Government Obligations evidenced by such
depository receipt.
"VOTING STOCK" of a corporation means all classes of Capital Stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
"WHOLLY OWNED SUBSIDIARY" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares or shares required by applicable healthcare laws to be owned by Persons
other than the Company) is owned by the Company or another Wholly Owned
Subsidiary.
SECTION 1.2. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Additional Restricted Securities" ................................ 2.1(b)
"Affiliate Transaction"............................................ 3.8
"Agent Member"..................................................... 2.1(e)
36
"Asset Disposition Offer".......................................... 3.7(b)
"Asset Disposition Offer Amount"................................... 3.7(b)
"Asset Disposition Offer Period"................................... 3.7(b)
"Asset Disposition Purchase Date".................................. 3.7(c)(1)
"Authenticating Agent"............................................. 2.2
"Blockage Notice".................................................. 10.3
"Certificate of Destruction"....................................... 2.13
"Change of Control Offer".......................................... 3.9
"Change of Control Payment"........................................ 3.9
"Change of Control Payment Date"................................... 3.9
"Company Order".................................................... 2.2
"Corporate Trust Office"........................................... 3.14
"covenant defeasance option"....................................... 8.1(b)
"cross acceleration provision"..................................... 6.1(6)(b)
"Defaulted Interest"............................................... 2.14
"Event of Default"................................................. 6.1
"Excess Proceeds".................................................. 3.7(b)
"Exchange Global Note"............................................. 2.1(b)
"Global Securities"................................................ 2.1(b)
"IAI".............................................................. 2.1(b)
"Institutional Accredited Investor Note"........................... 2.1(b)
"Institutional Accredited Investor Global Note".................... 2.1(b)
"judgment default provision"....................................... 6.1(8)
"legal defeasance option".......................................... 8.1(b)
"Note Register".................................................... 2.3
37
"Obligations"...................................................... 11.1
"Pari Passu Notes"................................................. 3.7(b)
"Payment Blockage Period" ......................................... 10.3
"payment default" ................................................. 6.1(6)
"Paying Agent"..................................................... 2.3
"Private Placement Legend"......................................... 2.1(d)
"QIB".............................................................. 2.1(b)
"Registrar"........................................................ 2.3
"Regulation S"..................................................... 2.1(b)
"Regulation S Global Note"......................................... 2.1(b)
"Regulation S Legend".............................................. 2.1(d)
"Regulation S Note"................................................ 2.1(b)
"Resale Restriction Termination Date".............................. 2.6(a)
"Restricted Payment"............................................... 3.4
"Restricted Securities"............................................ 2.1(a)
"Rule 144A"........................................................ 2.1(b)
"Rule 144A Global Note"............................................ 2.1(b)
"Rule 144A Note"................................................... 2.1(b)
"Similar Business"................................................. 3.7(c)(2)
"Special Interest Payment Date".................................... 2.14(a)
"Special Record Date".............................................. 2.14(a)
"Successor Company"................................................ 4.1
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" or "SEC" means the Securities and Exchange Commission.
38
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.4. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(7) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM, DATING AND TERMS.
(a) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Initial
Securities issued on the date hereof will be in an aggregate principal amount of
$180,000,000. In addition, the Company may issue, from time to time in
accordance with the provisions of this Indenture, including, without limitation,
SECTION 3.3 hereof, Additional Securities and Exchange Securities. Furthermore,
Securities may
39
be authenticated and delivered upon registration or transfer, or in lieu of,
other Securities pursuant to SECTION 2.6, 2.10, 2.12 or 9.5 or in connection
with an Asset Disposition Offer pursuant to SECTION 3.7 or a Change of Control
Offer pursuant to SECTION 3.9.
The Initial Securities shall be known and designated as "11 7/8%
Senior Subordinated Notes, Series A, due 2012" of the Company. Additional
Securities issued as securities bearing one of the restrictive legends described
in Section 2.1(d) ("RESTRICTED SECURITIES") shall be known and designated as "11
7/8% Senior Subordinated Notes, Series A, due 2012" of the Company. Additional
Securities issued other than as Restricted Securities shall be known and
designated as "11 7/8% Senior Subordinated Notes, Series B, due 2012" of the
Company, and Exchange Securities shall be known and designated as "11 7/8%
Senior Subordinated Notes, Series B, due 2012" of the Company.
With respect to any Additional Securities, the Company shall set
forth in a Board Resolution and an Officers' Certificate, the following
information:
(1) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture;
(2) the issue price and the issue date of such Additional
Securities, including the date from which interest shall accrue; and
(3) whether such Additional Securities shall be Restricted
Securities issued in the form of Exhibit A hereto and/or shall be issued in
the form of Exhibit B hereto.
The Initial Securities, the Additional Securities and the Exchange
Securities shall be considered collectively as a single class for all purposes
of this Indenture. Holders of the Initial Securities, the Additional Securities
and the Exchange Securities will vote and consent together on all matters to
which such Holders are entitled to vote or consent as one class, and none of the
Holders of the Initial Securities, the Additional Securities or the Exchange
Securities shall have the right to vote or consent as a separate class on any
matter to which such Holders are entitled to vote or consent.
(b) The Initial Securities are being offered and sold by the Company
pursuant to a Purchase Agreement, dated August 8, 2002, among the Company,
Holdings, the Subsidiary Guarantors, X.X. Xxxxxx Securities Inc. and the other
initial purchasers named therein. The Initial Securities and any Additional
Securities (if issued as Restricted Securities) (the "ADDITIONAL RESTRICTED
SECURITIES") will be resold initially only to (A) qualified institutional buyers
(as defined in Rule 144A under the Securities Act ("RULE 144A")) in reliance on
Rule 144A ("QIBs") and (B) Persons other than U.S. Persons (as defined in
Regulation S under the Securities Act ("REGULATION S")) in reliance on
Regulation S. Such Initial Securities and Additional Restricted Securities may
thereafter be transferred to, among others, QIBs, purchasers in reliance on
Regulation S and institutional "accredited investors" (as defined in Rules
501(a)(1), (2), (3) and (7) under the Securities Act) who are not QIBs ("IAIS")
in accordance with Rule 501 of the Securities Act, in each case, in accordance
with the procedure described herein.
40
Initial Securities and Additional Restricted Securities offered and
sold to QIBs in the United States of America in reliance on Rule 144A (the "RULE
144A NOTES") shall be issued in the form of a permanent global Security, without
interest coupons, substantially in the form of EXHIBIT A, which is hereby
incorporated by reference and made a part of this Indenture, including
appropriate legends as set forth in SECTION 2.1(d) (the "RULE 144A GLOBAL
NOTE"), deposited with the Trustee, as custodian for DTC, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The Rule 144A
Global Note may be represented by more than one certificate, if so required by
DTC's rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Rule 144A Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.
Initial Securities and Additional Securities offered and sold
outside the United States of America (the "REGULATION S NOTES") in reliance on
Regulation S shall initially be issued in the form of a temporary global
Security (the "TEMPORARY REGULATION S GLOBAL NOTE"), without interest coupons.
Beneficial interest in the Temporary Regulation S Global Note will be exchanged
for beneficial interests in a corresponding permanent global Security, without
interest coupons, substantially in the form of EXHIBIT A including appropriate
legends as set forth in SECTION 2.1(d) (the "PERMANENT REGULATION S GLOBAL NOTE"
and, together with the Temporary Regulation S Global Note, each a "REGULATION S
GLOBAL NOTE") within a reasonable period after the expiration of the Restricted
Period (as defined below) upon delivery of the certification contemplated by
SECTION 2.7. Each Regulation S Global Note will be deposited upon issuance with,
or on behalf of, the Trustee as custodian for DTC in the manner described in
this ARTICLE II for credit to the respective accounts of the purchasers (or to
such other accounts as they may direct) at Euroclear Bank S.A./N.V.
("EUROCLEAR") or Clearstream Banking, societe anonyme ("CLEARSTREAM"). Prior to
the 40th day after the later of the commencement of the offering of the Initial
Securities and the Issue Date (such period through and including such 40th day,
the "RESTRICTED PERIOD"), interests in the Temporary Regulation S Global Note
may only be held through Euroclear or Clearstream (as indirect participants in
DTC) unless exchanged for interests in a Global Security in accordance with the
transfer and certification requirements described herein.
Investors may hold their interests in the Regulation S Global Note
directly through Euroclear or Clearstream, if they are participants in such
systems, or indirectly through organizations which are participants in such
systems. After the expiration of the Restricted Period (but not earlier),
investors may also hold such interests through organizations other than
Euroclear or Clearstream that are participants in DTC's system. Euroclear and
Clearstream will hold such interests in the applicable Regulation S Global Note
on behalf of their participants through customers' securities accounts in their
respective names on the books of their respective depositaries. Such
depositaries, in turn, will hold such interests in the applicable Regulation S
Global Note in customers' securities accounts in the depositaries' names on the
books of DTC.
The Regulation S Global Note may be represented by more than one
certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate. The aggregate principal amount
of the Regulation S Global Note may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for DTC or its
nominee, as hereinafter provided.
41
Initial Securities and Additional Securities resold to IAIs (the
"INSTITUTIONAL ACCREDITED INVESTOR NOTES") in the United States of America shall
be issued in the form of a permanent global Security, without interest coupons,
substantially in the form of EXHIBIT A including appropriate legends as set
forth in SECTION 2.1(d) (the "INSTITUTIONAL ACCREDITED INVESTOR GLOBAL NOTE")
deposited with the Trustee, as custodian for DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The Institutional
Accredited Investor Global Note may be represented by more than one certificate,
if so required by DTC's rules regarding the maximum principal amount to be
represented by a single certificate. The aggregate principal amount of the
Institutional Accredited Investor Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A Notes,
the Regulation S Notes and the Institutional Accredited Investor Notes will be
issued in the form of a permanent global Security, without interest coupons,
substantially in the form of EXHIBIT B, which is hereby incorporated by
reference and made a part of this Indenture, deposited with the Trustee as
hereinafter provided, including the appropriate legend set forth in SECTION
2.1(d) (the "EXCHANGE GLOBAL NOTE"). The Exchange Global Note may be represented
by more than one certificate, if so required by DTC's rules regarding the
maximum principal amount to be represented by a single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the
Institutional Accredited Investor Global Note and the Exchange Global Note are
sometimes collectively herein referred to as the "GLOBAL SECURITIES."
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to SECTION 2.3;
PROVIDED, HOWEVER, that, at the option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
thereto as such addresses shall appear on the Note Register or (ii) wire
transfer to an account located in the United States maintained by the payee.
Payments in respect of Securities represented by a Global Security (including
principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by DTC.
The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage, in addition to those set forth on EXHIBIT
A and EXHIBIT B and in SECTION 2.1(d). The Company and the Trustee shall approve
the forms of the Securities and any notation, endorsement or legend on them.
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in EXHIBIT A and EXHIBIT B are part of the terms of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to be bound by such
terms.
(c) DENOMINATIONS. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
42
(d) RESTRICTIVE LEGENDS. Unless and until (i) an Initial Security is
sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement or a
similar agreement,
(A) the Rule 144A Global Note and the Institutional Accredited
Investor Global Note shall bear the following legend (the "PRIVATE PLACEMENT
LEGEND") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF
AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF
$250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER
43
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
BY ITS ACQUISITION OF THIS SECURITY THE HOLDER THEREOF WILL BE DEEMED TO
HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS
USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES THE
ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OF
PLANS, INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER ARRANGEMENTS THAT ARE
SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") OR PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL,
NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS
OF ERISA OR THE CODE ("SIMILAR LAWS"), OR OF AN ENTITY WHOSE UNDERLYING
ASSETS ARE CONSIDERED TO INCLUDE "PLAN ASSETS" OF SUCH PLANS, ACCOUNTS OR
ARRANGEMENTS, OR (II) THE PURCHASE AND HOLDING OF THIS SECURITY WILL NOT
CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE
SIMILAR LAWS."
(B) the Regulation S Global Note shall bear the following legend
(the "REGULATION S LEGEND") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") THAT IS FORTY DAYS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE
ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
44
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND IN
THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED
AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE
DAY ON WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS
(AS DEFINED IN REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE
ORIGINAL OFFERING. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT."
(C) The Global Securities, whether or not an Initial Security, shall
bear the following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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 IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
45
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC 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 THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(e) BOOK-ENTRY PROVISIONS.
(i) This SECTION 2.1(e) shall apply only to Global Securities
deposited with the Trustee, as custodian for DTC.
(ii) Each Global Security initially shall (x) be registered in the
name of DTC for such Global Security or the nominee of DTC, (y) be delivered to
the Trustee as custodian for DTC and (z) bear legends as set forth in SECTION
2.1(d).
(iii) Members of, or participants in, DTC ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by DTC or by the Trustee as the custodian of DTC or under such
Global Security, and DTC 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 DTC or impair, as between DTC and its Agent Members,
the operation of customary practices of DTC governing the exercise of the rights
of a Holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (f) of this SECTION 2.1 to
beneficial owners who are required to hold Definitive Securities, the Securities
Custodian shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount.
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (f) of this SECTION 2.1, such Global
Security 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 DTC in exchange for its beneficial interest
in such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.
(vi) 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.
(f) DEFINITIVE SECURITIES. (i) Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
Definitive Securities. If required to
46
do so pursuant to any applicable law or regulation, beneficial owners may obtain
Definitive Securities in exchange for their beneficial interests in a Global
Security upon written request in accordance with DTC's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (a) DTC notifies the Company that it is unwilling or unable to
continue as depositary for such Global Security or DTC ceases to be a clearing
agency registered under the Exchange Act, at a time when DTC is required to be
so registered in order to act as depositary, and in each case a successor
depositary is not appointed by the Company within 90 days of such notice or, (b)
the Company in its sole discretion executes and delivers to the Trustee and
Registrar an Officers' Certificate stating that such Global Security shall be so
exchangeable or (c) an Event of Default has occurred and is continuing and the
Registrar has received a request from DTC.
(ii) Any Definitive Security delivered in exchange for an interest
in a Global Security pursuant to SECTION 2.1(e)(iv) or (v) shall, except as
otherwise provided by SECTION 2.6(c), bear the applicable legend regarding
transfer restrictions applicable to the Definitive Security set forth in SECTION
2.1(d).
(iii) In connection with the exchange of a portion of a Definitive
Security for a beneficial interest in a Global Security, the Trustee shall
cancel such Definitive Security, and the Company shall execute, and the Trustee
shall authenticate and deliver, to the transferring Holder a new Definitive
Security representing the principal amount not so transferred.
SECTION 2.2. EXECUTION AND AUTHENTICATION. One Officer shall sign
the Securities for the Company by manual or facsimile signature. If an Officer
whose signature is on a Security no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture. A Security shall be dated
the date of its authentication.
At any time and from time to time after the execution and delivery
of this Indenture, the Trustee shall authenticate and make available for
delivery: (1) Initial Securities for original issue on the Issue Date in an
aggregate principal amount of $180,000,000, (2) Additional Securities for
original issue in an unlimited principal amount and (3) Exchange Securities for
issue only in an Exchange Offer pursuant to the Registration Rights Agreement,
and only in exchange for Initial Securities or Additional Securities of an equal
principal amount, in each case upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company (the "COMPANY ORDER"). Such Company Order shall specify
the amount of the Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated and whether the Securities
are to be Initial Securities, Additional Securities or Exchange Securities.
The Trustee may appoint an agent (the "AUTHENTICATING AGENT")
reasonably acceptable to the Company to authenticate the Securities. Any such
instrument shall be evidenced by an instrument signed by a Trust Officer, a copy
of which shall be furnished to the
47
Company. Unless limited by the terms of such appointment, any such
Authenticating Agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by the Authenticating Agent.
In case the Company or any Guarantor, pursuant to ARTICLE IV or
SECTION 11.2, shall be consolidated or merged with or into any other Person or
shall convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
any Guarantor shall have been merged, or the Person which shall have received a
conveyance, transfer, lease or other disposition as aforesaid, shall have
executed an indenture supplemental hereto with the Trustee pursuant to ARTICLE
IV, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this SECTION 2.2 in exchange
or substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
SECTION 2.3. REGISTRAR AND PAYING AGENT. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "REGISTRAR") and an office or agency where
Securities may be presented for payment (the "PAYING AGENT"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "NOTE
REGISTER"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent and the term "Registrar" includes any co-registrar.
The Company shall enter into an appropriate agency agreement with
any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to SECTION 7.7. The
Company or any of its Restricted Subsidiaries may act as Paying Agent, Registrar
or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities. The Company may remove any Registrar or Paying Agent
upon written notice to such Registrar or Paying Agent and to the Trustee;
PROVIDED, HOWEVER, that no such removal shall become effective until (i)
acceptance of any appointment by a successor as evidenced by an appropriate
agreement entered into by the Company and such successor Registrar or Paying
Agent, as the case may be, and delivered to the Trustee or (ii) notification to
the Trustee that the
48
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to the Company and the Trustee.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST. By no later than
10:00 a.m. (New York City time) on the date on which any principal of or
interest on any Security is due and payable, the Company shall deposit with the
Paying Agent a sum sufficient in immediately available funds to pay such
principal or interest when due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that such Paying Agent shall hold
in trust for the benefit of Securityholders or the Trustee all money held by
such Paying Agent for the payment of principal of or interest on the Securities
and shall notify the Trustee in writing of any default by the Company or any
Guarantor in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.5. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish or cause the Registrar to furnish to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Note or an Institutional Accredited Investor
Note prior to the date which is two years after the later of the date of its
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Securities (or any predecessor thereto) (the
"RESALE RESTRICTION TERMINATION DATE"):
(i) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Note or a beneficial interest therein to a QIB shall be made upon
the representation of the transferee in the form as set forth on the
reverse of the Security that it is purchasing 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, 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 its foregoing representations
in order to claim the exemption from registration provided by Rule 144A;
49
(ii) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Note or a beneficial interest therein to an IAI shall be made upon
receipt by the Trustee or its agent of a certificate substantially in the
form set forth in SECTION 2.8 from the proposed transferee and, if
requested by the Company or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
(iii) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Note or a beneficial interest therein to a Non-U.S. Person shall
be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in SECTION 2.9 from the proposed
transferee and, if requested by the Company or the Trustee, the delivery of
an opinion of counsel, certification and/or other information satisfactory
to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(i) a transfer of a Regulation S Note or a beneficial interest
therein to a QIB shall be made upon the representation of the transferee,
in the form of assignment on the reverse of the certificate, 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 "qualified institutional buyer" 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 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 its foregoing representations in order to claim
the exemption from registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial interest
therein to an IAI shall be made upon receipt by the Trustee or its agent of
a certificate substantially in the form set forth in SECTION 2.8 from the
proposed transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them; and
(iii) a transfer of a Regulation S Note or a beneficial interest
therein to a Non-U.S. Person shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in SECTION
2.9 hereof from the proposed transferee and, if requested by the Company or
the Trustee, receipt by the Trustee or its agent of an opinion of counsel,
certification and/or other information satisfactory to each of them.
After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred in accordance with applicable law without
requiring the certification set forth in SECTION 2.8, SECTION 2.9 or any
additional certification.
(c) RESTRICTED SECURITIES LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing a
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear a Restricted Securities Legend unless (i) Initial Securities are being
exchanged for
50
Exchange Securities in an Exchange Offer in which case the Exchange Securities
shall not bear a Restricted Securities Legend, (ii) an Initial Security is being
transferred pursuant to an effective registration statement or (iii) there is
delivered to the Registrar an Opinion of Counsel 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.
(d) The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to SECTION 2.1 or this SECTION
2.6. 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 prior written notice to the Registrar.
(e) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the Company
shall, subject to the other terms and conditions of this ARTICLE II,
execute and the Trustee shall authenticate Definitive Securities and Global
Securities at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to SECTIONS 3.7, 3.9 or 9.5).
(iii) The Registrar shall not be required to register the transfer
of or exchange of any Security for a period beginning (1) 15 days before
the mailing of a notice of an offer to repurchase or redeem Securities and
ending at the close of business on the day of such mailing or (2) 15 days
before an interest payment date and ending on such interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent or the Registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, including without limitation the transfer or exchange of such
Security, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent or the Registrar shall be affected by notice
to the contrary.
(v) Any Definitive Security delivered in exchange for an interest in
a Global Security pursuant to SECTION 2.1(e) shall, except as otherwise
provided by SECTION 2.6(c), bear the applicable legend regarding transfer
restrictions applicable to the Definitive Security set forth in SECTION
2.1(d).
(vi) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(f) NO OBLIGATION OF THE TRUSTEE.
51
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in, DTC or
other Person with respect to the accuracy of the records of DTC or its nominee
or of any participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than DTC) of any notice (including any
notice of redemption) or the payment of any amount or delivery of any Securities
(or other security or property) under or with respect to such Securities. All
notices and communications to be given to the Holders and all payments to be
made to Holders in respect of the Securities shall be given or made only to or
upon the order of the registered Holders (which shall be DTC or its nominee in
the case of a Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through DTC subject to the applicable rules and
procedures of DTC. The Trustee may rely and shall be fully protected in relying
upon information furnished by DTC with respect to its members, participants and
any beneficial owners.
(ii) 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 DTC
participants, members or beneficial owners 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 2.7. FORM OF CERTIFICATE TO BE DELIVERED UPON TERMINATION OF
RESTRICTED PERIOD.
[Date]
MedQuest, Inc.
c/o Wachovia Bank, National Association
0000 Xxxxx Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Re: MedQuest, Inc. (the "Company")
11 7/8% Senior Subordinated Notes due 2012 (the
"Securities")
Dear Sirs:
This letter relates to Securities represented by a temporary global
note (the "Temporary Regulation S Global Note"). Pursuant to Section 2.1 of the
Indenture dated as of August 15, 2002 relating to the Securities (the
"Indenture"), we hereby certify that the persons who are the beneficial owners
of $[______] principal amount of Securities represented by the Temporary
Regulation S Global Note are persons outside the United States to whom
beneficial interests in such Securities could be transferred in accordance with
Rule 904 of Regulation S promulgated under the Securities Act of 1933, as
amended. Accordingly, you are hereby requested to issue a Permanent Regulation S
Global Note representing the undersigned's interest
52
in the principal amount of Securities represented by the Temporary Regulation S
Global Note, all in the manner provided by the Indenture.
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 Holder]
By:
--------------------
Authorized Signature
SECTION 2.8. FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS.
[Date]
MedQuest, Inc.
c/o Wachovia Bank, National Association
0000 Xxxxx Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Dear Sirs:
This certificate is delivered to request a transfer of $[_________]
principal amount of the 11 7/8% Senior Subordinated Notes due 2012 (the
"SECURITIES") of MedQuest, Inc. (the "COMPANY").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "SECURITIES ACT")) purchasing for our own account or for the account of
such an institutional "accredited investor" at least $250,000 principal amount
of the Securities, and we are acquiring the Securities not with a view to, or
for offer or sale in connection with, any distribution in violation of the
Securities Act. We
53
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Securities
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date that is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "RESALE RESTRICTION TERMINATION DATE") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Securities of $250,000 or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Termination
Date of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
TRANSFEREE:
------------------------------
BY:
------------------------------
54
SECTION 2.9. FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S.
[Date]
MedQuest, Inc.
c/o Wachovia Bank, National Association
0000 Xxxxx Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Re: MedQuest, Inc.
11 7/8% Senior Subordinated Notes due 2012 (the
"Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $[________] aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, we
represent that:
(a) the offer of the Securities was not made to a person in the
United States;
(b) either (i) 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 or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
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.
55
Very truly yours,
[Name of Transferor]
By:
----------------------------
-------------------------------
Authorized Signature
SECTION 2.10. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. If a
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met, such that the Securityholder (a) satisfies the Company or the Trustee
within a reasonable time after such Securityholder has notice of such loss,
destruction or wrongful taking and the Registrar does not register a transfer
prior to receiving such notification, (b) makes such request to the Company or
Trustee prior to the Security being acquired by a protected purchaser as defined
in Section 8-303 of the Uniform Commercial Code (a "protected purchaser") and
(c) satisfies any other reasonable requirements of the Trustee. If required by
the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent and the Registrar from any loss which any
of them may suffer if a Security is replaced, and, in the absence of notice to
the Company, any Guarantor or the Trustee that such Security has been acquired
by a bona fide purchaser, the Company shall execute and upon Company Order the
Trustee shall authenticate and make available for delivery, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount, bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, 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) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Guarantor (if applicable)
and any other obligor upon the Securities, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
56
SECTION 2.11. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those cancelled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding in the
event the Company or a Subsidiary of the Company holds the Security, PROVIDED,
HOWEVER, that (i) for purposes of determining which are outstanding for consent
or voting purposes hereunder, the provisions of SECTION 13.6 shall apply and
(ii) in determining whether the Trustee shall be protected in making a
determination whether the Holders of the requisite principal amount of
outstanding Securities are present at a meeting of Holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which a Trust Officer of the Trustee actually knows to be held by the Company or
an Affiliate of the Company shall not be considered outstanding.
If a Security is replaced pursuant to SECTION 2.10, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.12. TEMPORARY SECURITIES. In the event that Definitive
Securities are to be issued under the terms of this Indenture, until such
Definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Definitive
Securities. After the preparation of Definitive Securities, the temporary
Securities shall be exchangeable for Definitive Securities upon surrender of the
temporary Securities at any office or agency maintained by the Company for that
purpose and such exchange shall be without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities, the Company shall
execute, and the Trustee shall authenticate and make available for delivery in
exchange therefor, one or more Definitive Securities representing an equal
principal amount of Securities. Until so exchanged, the Holder of temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as a Holder of Definitive Securities.
SECTION 2.13. CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and destroy such Securities in accordance with its internal
policies including delivery of a certificate (a "CERTIFICATE OF DESTRUCTION")
describing such
57
Securities disposed (subject to the record retention requirements of the
Exchange Act). The Company may not issue new Securities to replace Securities it
has paid or delivered to the Trustee for cancellation for any reason other than
in connection with a transfer or exchange.
SECTION 2.14. PAYMENT OF INTEREST; DEFAULTED INTEREST. Interest on
any Security which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to the Person in whose name such
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest at the office or agency of
the Company maintained for such purpose pursuant to SECTION 2.3.
Any interest on any Security which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "DEFAULTED INTEREST") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date (not less than 30 days after such
notice) of the proposed payment (the "SPECIAL INTEREST PAYMENT DATE"), and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "SPECIAL RECORD DATE") for the payment of such
Defaulted Interest, which date shall be not more than 15 days and not less
than 10 days prior to the Special Interest Payment Date and not less than
10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date, and in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor to be given in the
manner provided for in SECTION 13.2, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date
therefor having been so given, such Defaulted Interest shall be paid on the
Special Interest Payment Date to the Persons in whose names the Securities
(or their respective predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such
58
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of, transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.15. COMPUTATION OF INTEREST. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.16. CUSIP AND ISIN NUMBERS. The Company in issuing the
Securities may use "CUSIP" and "ISIN" numbers (if then generally in use) and, if
so, the Trustee shall use "CUSIP" and "ISIN" numbers in notices of redemption as
a convenience to Holders; PROVIDED, HOWEVER, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such CUSIP or ISIN numbers. The Company shall promptly notify the
Trustee in writing of any change in the CUSIP and ISIN numbers.
ARTICLE III
COVENANTS
SECTION 3.1. PAYMENT OF SECURITIES. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture immediately available funds
sufficient to pay all principal and interest then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such money to
the Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 3.2. SEC REPORTS. Notwithstanding that the Company may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, to the extent permitted by the Exchange Act, the Company shall file with
the SEC, and make available to the Trustee and the registered Holders of the
Securities, the annual reports and the information,
59
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that are specified in
Sections 13 and 15(d) of the Exchange Act within the time periods specified
therein. In the event that the Company is not permitted to file such reports,
documents and information with the SEC pursuant to the Exchange Act, the Company
will nevertheless make available such Exchange Act information to the Trustee
and the Holders of the Securities as if the Company were subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act within the
time periods specified therein.
If the Unrestricted Subsidiaries of the Company, either individually
or in the aggregate, would constitute a Significant Subsidiary (if such
Subsidiaries were Restricted Subsidiaries), then the quarterly and annual
reports referred to in the preceding paragraph shall include a Management's
Discussion and Analysis of Results of Operations and Financial Condition that
describes, for the relevant period, the financial performance of the Company and
its Restricted Subsidiaries.
Notwithstanding the foregoing, so long as Holdings is a Guarantor,
the reports, documents and information required to be filed and provided as
described above may be those of Holdings, rather than the Company, so long as
such filings would satisfy the requirements of the Exchange Act and regulations
promulgated thereunder.
SECTION 3.3. LIMITATION ON INDEBTEDNESS. (a) The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (including Acquired Indebtedness); PROVIDED, HOWEVER, that the
Company and the Subsidiary Guarantors may Incur Indebtedness if on the date
thereof:
(1) the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries is at least 2.00 to 1.00; and
(2) no Default or Event of Default will have occurred or be
continuing or would occur as a consequence of Incurring the
Indebtedness.
(b) SECTION 3.3(a) will not prohibit the Incurrence of the following
Indebtedness:
(1) Indebtedness of the Company or the Subsidiary Guarantors
Incurred pursuant to the Senior Credit Agreement in an
aggregate amount up to $95.0 million less the aggregate
principal amount of permanent commitment reductions with
the proceeds from Asset Dispositions;
(2) the Notes Guarantees and any other Guarantees by the
Subsidiary Guarantors of Indebtedness Incurred in
accordance with the provisions of this Indenture; PROVIDED
that in the event such Indebtedness that is being
Guaranteed is (a) Senior Subordinated Indebtedness or
Guarantor Senior Subordinated Indebtedness, then the
related Guarantee shall rank equally in right of payment to
the Notes Guarantees hereunder or (b) a Subordinated
Obligation or a Guarantor Subordinated Obligation, then the
related Guarantee shall be subordinated in right of payment
to the Notes Guarantee;
60
(3) Indebtedness of the Company owing to and held by any
Restricted Subsidiary (other than a Receivables Entity) or
Indebtedness of a Restricted Subsidiary owing to and held
by the Company or any Restricted Subsidiary (other than a
Receivables Entity), PROVIDED, HOWEVER;
(a) if the Company is the obligor on such Indebtedness,
such Indebtedness is expressly subordinated to the
prior payment in full in cash of all obligations
with respect to the Securities;
(b) if a Subsidiary Guarantor is the obligor on such
Indebtedness and the Company is not the Obligee,
such Indebtedness is subordinated in right of
payment to the Notes Guarantees of such Subsidiary
Guarantor; and
(c) (i) any subsequent issuance or transfer of Capital
Stock or any other event which results in any such
Indebtedness being beneficially held by a Person
other than the Company or a Restricted Subsidiary
(other than a Receivables Entity) of the Company;
and
(ii) any sale or other transfer of any such
Indebtedness to a Person other than the Company or a
Restricted Subsidiary (other than a Receivables
Entity) of the Company,
shall be deemed, in each case, to constitute an Incurrence
of such Indebtedness by the Company or such Subsidiary, as
the case may be;
(4) Indebtedness represented by (a) the Securities issued on
the Issue Date and the Exchange Securities issued in
exchange therefor in a registered exchange offer pursuant
to the Registration Rights Agreement, (b) any Indebtedness
(other than the Indebtedness described in clauses (1), (2),
(3), (5), (7), (8), (9) and (10)) outstanding on the Issue
Date and (c) any Refinancing Indebtedness Incurred in
respect of any Indebtedness described in this clause (4) or
Incurred pursuant to SECTION 3.3(a);
(5) Indebtedness under Currency Agreements and Interest Rate
Agreements; PROVIDED that in the case of Currency
Agreements, such Currency Agreements are related to
business transactions of the Company or its Restricted
Subsidiaries entered into in the ordinary course of
business or in the case of Currency Agreements and Interest
Rate Agreements, such Currency Agreements and Interest Rate
Agreements are entered into for bona fide hedging purposes
of the Company or its Restricted Subsidiaries (as
determined in good faith by the Board of Directors or
senior management of the Company) and substantially
correspond in terms of notional amount, duration,
currencies and interest rates, as applicable, to
Indebtedness of the Company or its Restricted Subsidiaries
Incurred without violation of this Indenture;
61
(6) Indebtedness (including Capitalized Lease Obligations and
Acquired Indebtedness) Incurred by the Company or any of
the Subsidiary Guarantors to finance the acquisition,
purchase, lease, construction, development, maintenance,
upgrade or improvement, in each case, to the extent such
expenditures are capitalized on the balance sheet of the
Company, of property (real or personal), equipment or other
assets (in each case whether through the direct purchase of
assets or the Capital Stock of any Person owning such
assets) so long as such Indebtedness is created within six
months of the acquisition, purchase, lease, construction,
development, maintenance, upgrade or improvement of the
related asset; PROVIDED that the aggregate principal amount
of all Indebtedness Incurred pursuant to this clause (6)
and all Refinancing Indebtedness to refund, refinance or
replace any Indebtedness Incurred pursuant to this clause
(6) does not exceed the greater of (A) $10.0 million and
(B) 10% of Tangible Assets in an aggregate principal amount
at any one time outstanding;
(7) Indebtedness Incurred in respect of workers' compensation
claims, self-insurance obligations, performance, surety and
similar bonds and completion guarantees provided by the
Company or a Restricted Subsidiary in the ordinary course
of business;
(8) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in
each case, Incurred or assumed in connection with the
disposition of any business, assets or Capital Stock of a
Restricted Subsidiary in accordance with the terms of this
Indenture, other than Guarantees by the Company or any
Restricted Subsidiary of Indebtedness Incurred by any
Person acquiring all or any portion of such business,
assets or a Subsidiary of the Company for the purpose of
financing such acquisition, PROVIDED that the maximum
aggregate liability in respect of all such Indebtedness
shall at no time exceed the gross proceeds, including the
fair market value as determined in good faith by a majority
of the Board of Directors of noncash proceeds (the fair
market value of such noncash proceeds being measured at the
time it is received and without giving effect to any
subsequent changes in value) actually received by the
Company and its Restricted Subsidiaries in connection with
such disposition;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar
instrument (except in the case of daylight overdrafts)
drawn against insufficient funds in the ordinary course of
business, PROVIDED, HOWEVER, that such Indebtedness is
extinguished within five Business Days of Incurrence;
(10) the Incurrence by a Receivables Entity of Indebtedness in a
Qualified Receivables Transaction that is not recourse to
the Company or any
62
Restricted Subsidiary of the Company (except for Standard
Securitization Undertakings); and
(11) in addition to the items referred to in clauses (1) through
(10) above, Indebtedness of the Company and its Subsidiary
Guarantors in an aggregate outstanding principal amount
which, when taken together with the principal amount of all
other Indebtedness Incurred pursuant to this clause (11)
and then outstanding, will not exceed $25.0 million at any
one time outstanding.
(c) The Company will not Incur any Indebtedness under SECTION 3.3(b) if
the proceeds thereof are used, directly or indirectly, to refinance any
Subordinated Obligations of the Company unless such Indebtedness will be
subordinated to the Securities to at least the same extent as such Subordinated
Obligations. No Guarantor will Incur any indebtedness if the proceeds thereof
are used, directly or indirectly, to refinance any Guarantor Subordinated
Obligations of such Guarantor unless such Indebtedness will be subordinated to
the obligations of such Guarantor under its Notes Guarantee to at least the same
extent as such Guarantor Subordinated Obligations. No Restricted Subsidiary that
is not a Subsidiary Guarantor may Incur any Indebtedness if the proceeds are
used to refinance Indebtedness of the Company.
(d) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this SECTION 3.3:
(1) in the event that Indebtedness meets the criteria of more
than one of the types of Indebtedness described in SECTION
3.3(a) OR (b), the Company, in its sole discretion, will
classify such item of Indebtedness on the date of
Incurrence and only be required to include the amount and
type of such Indebtedness in the clause so selected, except
that, following the date of Incurrence, the Company may
later reclassify all or a portion of such item of
Indebtedness in any manner that complies with this SECTION
3.3; PROVIDED that the Indebtedness so reclassified is of
the nature referred to in the clause into which all or a
portion of such Indebtedness is reclassified;
(2) all Indebtedness outstanding on the date of this Indenture
under the Senior Credit Agreement shall be deemed initially
Incurred on the Issue Date under clause (1) of SECTION
3.3(b) and not clause (4) of SECTION 3.3(b);
(3) Guarantees of, or obligations in respect of letters of
credit relating to, Indebtedness which is otherwise
included in the determination of a particular amount of
Indebtedness shall not be included;
(4) if obligations in respect of letters of credit are Incurred
pursuant to the Senior Credit Agreement and are being
treated as Incurred pursuant to clause (1) of SECTION
3.3(b) and the letters of credit relate to other
Indebtedness, then such other Indebtedness shall not be
included;
63
(5) the principal amount of any Disqualified Stock of the
Company or a Restricted Subsidiary or Preferred Stock of a
Restricted Subsidiary that is not a Guarantor will be equal
to the greater of the maximum mandatory redemption or
repurchase price (not including, in either case, any
redemption or repurchase premium) or the liquidation
preference thereof;
(6) Indebtedness permitted by this SECTION 3.3 need not be
permitted solely by reference to one provision permitting
such Indebtedness but may be permitted in part by one such
provision and in part by one or more other provisions of
this SECTION 3.3 permitting such Indebtedness; and
(7) the amount of Indebtedness issued at a price that is less
than the principal amount thereof will be equal to the
amount of the liability in respect thereof determined in
accordance with GAAP.
Accrual of interest, accrual of dividends, the accretion of accreted
value, the payment of interest in the form of additional Indebtedness and the
payment of dividends in the form of additional shares of Preferred Stock or
Disqualified Stock will not be deemed to be an Incurrence of Indebtedness for
purposes of this SECTION 3.3.
(e) In addition, the Company will not permit any of its Unrestricted
Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified
Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary
becomes a Restricted Subsidiary, 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 Indebtedness is not permitted to be Incurred as of such date under
this SECTION 3.3, the Company shall be in Default of this SECTION 3.3).
(f) For purposes of determining compliance with any U.S.
dollar-denominated restriction on the Incurrence of Indebtedness, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was Incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness;
PROVIDED that if such Indebtedness is Incurred to refinance other Indebtedness
denominated in a foreign currency, and such refinancing would cause the
applicable U.S. dollar-denominated restriction to be exceeded if calculated at
the relevant currency exchange rate in effect on the date of such refinancing,
such U.S. dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such refinancing Indebtedness does
not exceed the principal amount of such Indebtedness being refinanced.
Notwithstanding any other provision of this SECTION 3.3, the maximum amount of
Indebtedness that the Company may Incur pursuant to this SECTION 3.3 shall not
be deemed to be exceeded solely as a result of fluctuations in the exchange rate
of currencies. The principal amount of any Indebtedness Incurred to refinance
other Indebtedness, if Incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such Refinancing Indebtedness is
denominated that is in effect on the date of such refinancing.
SECTION 3.4. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall not,
and shall not permit any of its Restricted Subsidiaries, directly or indirectly,
to:
64
(1) declare or pay any dividend or make any distribution on or
in respect of its Capital Stock (including any payment in
connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) except:
(a) dividends or distributions payable in Capital Stock
of the Company (other than Disqualified Stock) or in
options, warrants or other rights to purchase such
Capital Stock; and
(b) dividends or distributions payable to the Company or
a Restricted Subsidiary of the Company or to other
holders of Common Stock of a Restricted Subsidiary
on a pro rata basis;
(2) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of the Company or any direct or indirect
parent of the Company held by Persons other than the
Company or a Restricted Subsidiary of the Company;
(3) purchase, repurchase, redeem, defease or otherwise acquire
or retire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any
Subordinated Obligations or Guarantor Subordinated
Obligations (other than the purchase, repurchase,
redemption, defeasance or other acquisition or retirement
of Subordinated Obligations or Guarantor Subordinated
Obligations purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of
purchase, repurchase, redemption, defeasance or other
acquisition or retirement); or
(4) make any Restricted Investment in any Person;
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Restricted Investment referred to in clauses
(1) through (4) shall be referred to herein as a "RESTRICTED PAYMENT"), if at
the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(a) a Default shall have occurred and be continuing (or would
result therefrom); or
(b) the Company is not able to Incur an additional $1.00 of
Indebtedness pursuant to SECTION 3.3(a) after giving
effect, on a pro forma basis, to such Restricted Payment;
or
(c) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made subsequent to
the Issue Date would exceed the sum of:
(i) 50% of Consolidated Net Income for the period
(treated as one accounting period) from July 1, 2002
to the end of the most recent
65
fiscal quarter ending prior to the date of such
Restricted Payment for which financial statements
are publicly available (or, in case such
Consolidated Net Income is a deficit, minus 100% of
such deficit);
(ii) 100% of the aggregate Net Cash Proceeds (other than
in respect of an Excluded Contribution) received by
the Company from the issue or sale of its Capital
Stock (other than Disqualified Stock) or other
capital contributions subsequent to the Issue Date
(other than Net Cash Proceeds received from an
issuance or sale of such Capital Stock to a
Subsidiary of the Company or an employee stock
ownership plan, option plan or similar trust to the
extent such sale to an employee stock ownership
plan, option plan or similar trust is financed by
loans from or Guaranteed by the Company or any
Restricted Subsidiary unless such loans have been
repaid with cash on or prior to the date of
determination);
(iii) 100% of the fair market value (as determined in good
faith by the Board of Directors of the Company) of
shares of Qualified Stock of the Company issued to
acquire assets from a third party;
(iv) the amount by which Indebtedness of the Company or
its Restricted Subsidiaries is reduced on the
Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of
the Company or its Restricted Subsidiaries
convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company (less the
amount of any cash, or the fair market value of any
other property, distributed by the Company upon such
conversion or exchange); and
(v) the amount equal to the net reduction in Restricted
Investments made by the Company or any of its
Restricted Subsidiaries in any Person resulting
from:
(A) repurchases or redemptions of such
Restricted Investments by such Person,
proceeds realized upon the sale of such
Restricted Investment (other than to the
Company or any of its Restricted
Subsidiaries), repayments of loans or
advances or other transfers of assets
(including by way of dividend or
distribution) by such Person to the Company
or any Restricted Subsidiary of the Company;
or
(B) the redesignation of Unrestricted
Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the
definition of "Investment") not to exceed,
in the case of any
66
Unrestricted Subsidiary, the amount of
Investments previously made by the Company
or any Restricted Subsidiary in such
Unrestricted Subsidiary,
which amount in each case under this clause (v) was
included in the calculation of the amount of
Restricted Payments; PROVIDED, HOWEVER, that no
amount will be included under this clause (v) to the
extent it is already included in Consolidated Net
Income.
(b) The provisions of SECTION 3.4(a) will not prohibit:
(1) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Capital Stock, Disqualified
Stock or Subordinated Obligations of the Company or
Guarantor Subordinated Obligations of a Subsidiary
Guarantor made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Capital Stock of the
Company or cash capital contributions to the Company (other
than Disqualified Stock and other than Capital Stock issued
or sold to a Subsidiary or an employee stock ownership plan
or similar trust to the extent such sale to an employee
stock ownership plan or similar trust is financed by loans
from or Guaranteed by the Company or any Restricted
Subsidiary unless such loans have been repaid with cash on
or prior to the date of determination); PROVIDED, HOWEVER,
that (a) such purchase, retirement, prepayment, defeasance
or redemption will be excluded in subsequent calculations
of the amount of Restricted Payments and (b) the Net Cash
Proceeds from such sale or cash capital contributions
applied in the manner set forth in this clause (1) will be
excluded from clause (c)(ii) of SECTION 3.4(a);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Subordinated Obligations of
the Company or Guarantor Subordinated Obligations of a
Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of,
Subordinated Obligations of the Company or Guarantor
Subordinated Obligations of a Subsidiary Guarantor, as the
case may be, that is permitted to be Incurred pursuant to
SECTION 3.3 and that, in each case constitutes Refinancing
Indebtedness; PROVIDED, HOWEVER, that such purchase,
retirement, prepayment, defeasance or redemption will be
excluded in subsequent calculations of the amount of
Restricted Payments;
(3) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Disqualified Stock of the
Company or a Restricted Subsidiary made by exchange for or
out of the proceeds of the substantially concurrent sale of
Disqualified Stock of the Company or such Restricted
Subsidiary, as the case may be, that, in each case,
constitutes Refinancing Indebtedness; PROVIDED, HOWEVER,
that such purchase, retirement, prepayment, defeasance or
redemption will be excluded in subsequent calculations of
the amount of Restricted Payments;
67
(4) so long as no Default or Event of Default has occurred and
is continuing, any purchase or redemption of Subordinated
Obligations or Guarantor Subordinated Obligations of a
Subsidiary Guarantor from Net Available Cash to the extent
permitted under SECTION 3.7; PROVIDED, HOWEVER, that such
purchase or redemption will be excluded in subsequent
calculations of the amount of Restricted Payments;
(5) dividends paid within 60 days after the date of declaration
if at such date of declaration such dividend would have
complied with this SECTION 3.4; PROVIDED HOWEVER, that such
dividends will be included in subsequent calculations of
the amount of Restricted Payments;
(6) Investments that are made with Excluded Contributions;
PROVIDED, HOWEVER, that such Investments will be excluded
in subsequent calculations of the amount of Restricted
Payments;
(7) so long as no Default or Event of Default has occurred and
is continuing,
(a) the purchase, redemption or other acquisition,
cancellation or retirement for value from any
existing or former employees, officers, directors or
consultants of the Company or Holdings or any
Subsidiary of the Company or their assigns, estates
or heirs of Capital Stock, Subordinated Obligations
or options, warrants, equity appreciation rights or
other rights to purchase or acquire Capital Stock of
the Company or any Restricted Subsidiary of the
Company or any parent of the Company; PROVIDED that
the amount of such redemptions, repurchases,
acquisitions, cancellations or retirements pursuant
to this clause shall not exceed in any calendar year
$5.0 million (with unused amounts in any calendar
year being carried over to succeeding calendar years
subject to a maximum of $10.0 million) (which amount
in any calendar year shall be increased by the
amount of any Net Cash Proceeds to the Company from
(i) sales of Capital Stock of the Company to
officers, directors, other employees or Permitted
Holders subsequent to the Issue Date to the extent
such amounts are not included under clause (c)(ii)
of SECTION 3.4(a) and (ii) any "key-man" life
insurance policies which are used to make such
repurchases); PROVIDED, FURTHER, that the
cancellation of Indebtedness owing to the Company
from such former officers, directors, consultants or
employees of Holdings or the Company or any of its
Restricted Subsidiaries in connection with a
repurchase of Capital Stock of the Company will not
be deemed to constitute a Restricted Payment under
this Indenture; PROVIDED, HOWEVER, that the amount
of any such purchase, redemption or other
acquisition, cancellation or retirement for value
will be included in subsequent calculations of the
amount of Restricted Payments; and
68
(b) loans or advances to officers, directors or other
employees of the Company or Holdings or any
Subsidiary of the Company the proceeds of which are
used to purchase Capital Stock of the Company or
Holdings (x) from Persons other than the Company or
Holdings in an aggregate amount not to exceed $1.0
million at any one time outstanding and (y) from the
Company or Holdings so long as the Net Cash Proceeds
of any such purchase, either to the extent directly
received by the Company or contributed to the
capital of the Company by Holdings, are not included
under clause (c)(ii) of SECTION 3.4(a); PROVIDED,
HOWEVER, that the amount of such loans and advances
under clause (x) will be included in subsequent
calculations of the amount of Restricted Payments
and the amount of such loans and advances under
clause (y) will be excluded in subsequent
calculations of the amount of Restricted Payments;
(8) so long as no Default or Event of Default has occurred and
is continuing, the declaration and payment of dividends to
holders of any class or series of Disqualified Stock of the
Company issued in accordance with the terms of this
Indenture to the extent such dividends are included in the
definition of "Consolidated Interest Expense"; PROVIDED,
HOWEVER, that such payment of such dividends will be
excluded in subsequent calculations of the amount of
Restricted Payments;
(9) repurchases of Capital Stock deemed to occur upon the
exercise of stock options, warrants or other convertible
securities if such Capital Stock represents a portion of
the exercise price thereof; PROVIDED, HOWEVER, that such
repurchases will be excluded from subsequent calculations
of the amount of Restricted Payments;
(10) cash dividends or loans to Holdings in amounts equal to:
(a) the amounts required for Holdings to pay any
Federal, state or local taxes to the extent that
such taxes are directly attributable to the income,
gain, capital or assets of the Company and its
Restricted Subsidiaries;
(b) the amounts required for Holdings to pay franchise
taxes and other fees required to maintain its legal
existence and all costs and expenses (including,
without limitation, legal and accounting expenses
and filing fees) Incurred by Holdings with respect
to filings with the SEC;
(c) an amount not to exceed $2.0 million in any fiscal
year to permit Holdings to pay its corporate
overhead and other operating expenses incurred in
the ordinary course of business, and to pay
69
salaries or other compensation of employees who
perform services for both Holdings and the Company;
PROVIDED that such dividends or loans will be excluded from
subsequent calculations of the amount of Restricted
Payments;
(11) any payments made in connection with the Transactions
pursuant to the Recapitalization Agreement and any other
agreements or documents related to the Transactions and set
forth on a schedule to this Indenture in effect on the
closing date of the Transactions (without giving effect to
subsequent amendments, waivers or other modifications to
such agreements or documents) or as otherwise described in
the Offering Memorandum, including payments made by the
Company to Holdings to allow Holdings to satisfy its
obligations (including indemnification, purchase price
adjustments and transaction fees and expenses) under such
agreements or documents as such agreements or documents are
in effect on the Issue Date; PROVIDED, HOWEVER, that such
amounts will be excluded in the calculation of the amount
of Restricted Payments;
(12) the payment of dividends on the Company's Common Stock (or
dividends, distributions or advances to Holdings to allow
Holdings to pay dividends on Holdings' Common Stock),
following the first public offering of the Company's Common
Stock (or of Holdings' Common Stock, as the case may be)
after the Issue Date, of, whichever is earlier, (i) in the
case of the first public offering of the Company's Common
Stock, up to 6% per annum of the Net Cash Proceeds received
by the Company in such public offering or (ii) in the case
of the first public offering of Holdings' Common Stock, up
to 6% per annum of the amount contributed by Holdings to
the Company from the Net Cash Proceeds received by Holdings
in such public offering, in each case, other than public
offerings of the Company or Holdings' Common Stock
registered on Form S-4 or S-8; PROVIDED, HOWEVER, that such
payments will be included in subsequent calculations of the
amount of Restricted Payments;
(13) the repurchase, redemption or other acquisition or
retirement for value of Subordinated Obligations of the
Company pursuant to a "change of control" covenant set
forth in the indenture or other agreement pursuant to which
the same is issued, PROVIDED that (i) such "change of
control" covenant is substantially identical in all
material respects to SECTION 3.9 in this Indenture; (ii)
such repurchase, redemption or other acquisition or
retirement for value shall only be permitted if all the
terms and conditions in such provisions have been complied
with and such repurchases, redemptions or other
acquisitions or retirements for value are made in
accordance with such indenture or other agreement pursuant
to which the same is issued; (iii) that the Company has
repurchased all Securities required to be repurchased by
the Company pursuant to the terms and conditions described
in SECTION 3.9 prior to the repurchase, redemption or
70
other acquisition or retirement for value of such
Subordinated Obligations pursuant to the "change of
control" covenant included in such indenture or other
agreement; and (iv) that such repurchase, redemption or
other acquisition shall be excluded in subsequent
calculations of the amount of Restricted Payments;
(14) the payment of dividends, distributions or advances to
Holdings to allow Holdings to redeem, repurchase, retire or
otherwise acquire or retire for value Series A Preferred
Stock and Series B Preferred Stock of Holdings in existence
on the Issue Date as contemplated in accordance with the
terms thereof upon the occurrence of a Qualified Public
Offering to the extent the proceeds of such Qualified
Public Offering are received by the Company; and
(15) other Restricted Payments not to exceed $5.0 million at any
one time outstanding PROVIDED, HOWEVER, that such amounts
will be included in subsequent calculations of the amount
of Restricted Payments.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of such Restricted Payment of the asset(s) or
securities proposed to be paid, transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any cash Restricted Payment shall be its face amount
and any non-cash Restricted Payment shall be determined conclusively by the
Board of Directors of the Company acting in good faith, whose resolution with
respect thereto shall be delivered to the Trustee, such determination to be
based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if such fair market value is
estimated in good faith by the Board of Directors of the Company to exceed $25.0
million. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by SECTION 3.4 were computed, together with a copy of any
opinion or appraisal required by this Indenture.
SECTION 3.5. LIMITATION ON LIENS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, create,
Incur or suffer to exist any Lien (other than Permitted Liens) upon any of its
property or assets (including Capital Stock of Restricted Subsidiaries of the
Company), whether owned on the date of this Indenture or acquired after that
date, which Lien is securing any Senior Subordinated Indebtedness, Subordinated
Obligations, Guarantor Senior Subordinated Indebtedness or Guarantor
Subordinated Obligations, unless contemporaneously with the Incurrence of the
Liens effective provision is made to secure the Indebtedness due under this
Indenture and the Securities or, in respect of Liens on any Restricted
Subsidiary's property or assets, any Notes Guarantee of such Restricted
Subsidiary, equally and ratably with (or prior to in the case of Liens with
respect to Subordinated Obligations or Guarantor Subordinated Obligations, as
the case may be) the Indebtedness secured by such Lien for so long as such
Indebtedness is so secured.
SECTION 3.6. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. (a) The Company shall not, and shall not permit any
Restricted Subsidiary to,
71
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock or pay any Indebtedness or other obligations
owed to the Company or any other Restricted Subsidiary (it
being understood that the priority of any preferred stock
in receiving dividends or liquidating distributions prior
to dividends or liquidating distributions being paid on
Common Stock shall not be deemed a restriction on the
ability to make distributions on Capital Stock);
(2) make any loans or advances to the Company or any other
Restricted Subsidiary (it being understood that the
subordination of loans or advances made to the Company or
any Restricted Subsidiary to other Indebtedness Incurred by
the Company or any Restricted Subsidiary shall not be
deemed a restriction on the ability to make loans or
advances); or
(3) transfer any of its property or assets to the Company or
any Restricted Subsidiary.
(b) The preceding provisions will not prohibit:
(i) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Issue
Date and identified in SCHEDULE 3.6 to this
Indenture, including, without limitation, this
Indenture, the Securities, the Notes Guarantees and
the Senior Credit Agreement in effect on such date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement
relating to any Capital Stock or Indebtedness
Incurred by a Restricted Subsidiary on or before the
date on which such Restricted Subsidiary was
acquired by the Company (other than Capital Stock or
Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds utilized to
consummate, the transaction or series of related
transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was
acquired by the Company or in contemplation of the
transaction) and outstanding on such date;
(iii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement
effecting a refunding, replacement or refinancing of
Indebtedness Incurred pursuant to an agreement
referred to in clause (i) or (ii) of this paragraph
or this clause (iii) or contained in any amendment
to an agreement referred to in clause (i) or (ii) of
this paragraph or this clause (iii); PROVIDED,
HOWEVER, that the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in
any such
72
agreement or amendment, taken as a whole, are no
less favorable in any material respect to the
Holders of the Securities than the encumbrances and
restrictions contained in such agreements referred
to in clauses (i) or (ii) of this paragraph on the
Issue Date or the date such Restricted Subsidiary
became a Restricted Subsidiary, whichever is
applicable;
(iv) in the case of clause (3) of SECTION 3.6(a), any
encumbrance or restriction:
(a) that restricts in a customary manner the
subletting, assignment or transfer of any
property or asset that is subject to a
lease, license or similar contract, or the
assignment or transfer of any such lease,
license or other contract;
(b) contained in mortgages, pledges, or other
security agreements permitted under this
Indenture securing Indebtedness of the
Company or a Restricted Subsidiary to the
extent such encumbrances or restrictions
restrict the transfer of the property
subject to such mortgages, pledges, or other
security agreements; or
(c) pursuant to customary provisions restricting
dispositions of real property interests set
forth in any reciprocal easement agreements
of the Company or any Restricted Subsidiary;
(v) (a) purchase money obligations for property acquired
in the ordinary course of business and (b)
Capitalized Lease Obligations permitted under this
Indenture, in each case, that impose encumbrances or
restrictions of the nature described in clause (3)
of SECTION 3.6(a) on the property so acquired;
(vi) any Purchase Money Note or other Indebtedness or
contractual requirements Incurred with respect to a
Qualified Receivables Transaction relating
exclusively to a Receivables Entity that, in the
good faith determination of the Board of Directors,
are necessary to effect such Qualified Receivables
Transaction;
(vii) any restriction with respect to a Restricted
Subsidiary (or any of its property or assets)
imposed pursuant to an agreement entered into for
the direct or indirect sale or disposition of the
Capital Stock or assets of such Restricted
Subsidiary (or the property or assets that are
subject to such restriction) pending the closing of
such sale or disposition;
73
(viii) customary provisions in joint venture agreements and
other similar agreements entered into in the
ordinary course of business;
(ix) net worth provisions in leases and other agreements
entered into by the Company or any Restricted
Subsidiary in the ordinary course of business; and
(x) encumbrances or restrictions arising or existing by
reason of applicable law or any applicable rule,
regulation or order.
SECTION 3.7. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)
The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, make any Asset Disposition UNLESS:
(1) the Company or such Restricted Subsidiary, as the case may
be, receives consideration at the time of contractually
agreeing to such Asset Disposition at least equal to the
fair market value, as determined in good faith by the Board
of Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such
Asset Disposition;
(2) at least 75% of the consideration from such Asset
Disposition received by the Company or such Restricted
Subsidiary, as the case may be, is in the form of cash or
Cash Equivalents; and
(3) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company or such
Restricted Subsidiary, as the case may be:
(a) FIRST, to the extent the Company or any Restricted
Subsidiary, as the case may be, elects (or is
required by the terms of any Senior Indebtedness),
to prepay, repay or purchase Senior Indebtedness or
Indebtedness (other than any Disqualified Stock or
Guarantor Subordinated Obligation) of a Restricted
Subsidiary that is a Subsidiary Guarantor (in each
case other than Indebtedness owed to the Company or
an Affiliate of the Company) within 365 days from
the later of the date of such Asset Disposition or
the receipt of such Net Available Cash; PROVIDED,
HOWEVER, that, in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to
this clause (a), the Company or such Restricted
Subsidiary will retire such Indebtedness and will
cause the related commitment (if any) to be
permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased;
and
(b) SECOND, to the extent of the balance of such Net
Available Cash after application in accordance with
clause (a), to the extent the Company or such
Restricted Subsidiary elects, to invest in
Additional Assets within 365 days from the later of
the date of
74
such Asset Disposition or the receipt of such Net
Available Cash; PROVIDED that pending the final
application of any such Net Available Cash in
accordance with this clause (b) or clause (a) above,
the Company and its Restricted Subsidiaries may
temporarily reduce Indebtedness or otherwise invest
such Net Available Cash in any manner not prohibited
by this Indenture.
(b) Any Net Available Cash from Asset Dispositions that are not
applied or invested as provided in SECTION 3.7(a) will be deemed to constitute
"EXCESS PROCEEDS." On the 366th day after an Asset Disposition, if the aggregate
amount of Excess Proceeds exceeds $20.0 million, the Company will be required to
make an offer ("ASSET DISPOSITION OFFER") to all Holders of Securities and to
the extent required by the terms of other Senior Subordinated Indebtedness, to
all holders of other Senior Subordinated Indebtedness outstanding with similar
provisions requiring the Company to make an offer to purchase such Senior
Subordinated Indebtedness with the proceeds from any Asset Disposition ("PARI
PASSU NOTES"), to purchase, on a ratable basis, the maximum principal amount of
Securities and any such Pari Passu Notes to which the Asset Disposition Offer
applies that may be purchased out of the Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount of the Securities and
Pari Passu Notes plus accrued and unpaid interest to the date of purchase, in
accordance with the procedures set forth in this Indenture or the agreements
governing the Pari Passu Notes, as applicable, in each case in integral
multiples of $1,000. To the extent that the aggregate amount of Securities and
Pari Passu Notes so validly tendered and not properly withdrawn pursuant to an
Asset Disposition Offer is less than the Excess Proceeds, the Company may use
any remaining Excess Proceeds for general corporate purposes subject to the
other covenants contained in this Indenture. If the aggregate principal amount
of Securities surrendered by Holders thereof and other Pari Passu Notes
surrendered by holders or lenders, collectively, exceeds the amount of Excess
Proceeds, the Trustee shall select the Securities and Pari Passu Notes to be
purchased on a pro rata basis on the basis of the aggregate principal amount of
tendered Securities and Pari Passu Notes. Upon completion of such Asset
Disposition Offer, the amount of Excess Proceeds shall be reset at zero.
(c) (1) The Asset Disposition Offer will remain open for a
period of 20 Business Days following its commencement, except to the extent that
a longer period is required by applicable law (the "ASSET DISPOSITION OFFER
PERIOD"). No later than five Business Days after the termination of the Asset
Disposition Offer Period (the "ASSET DISPOSITION PURCHASE DATE"), the Company
will purchase the principal amount of Securities and Pari Passu Notes required
to be purchased pursuant to this SECTION 3.7 (the "ASSET DISPOSITION OFFER
AMOUNT") or, if less than the Asset Disposition Offer Amount has been so validly
tendered, all Securities and Pari Passu Notes validly tendered in response to
the Asset Disposition Offer.
(2) If the Asset Disposition Purchase Date is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest will be paid to the Person in whose name a Security
is registered at the close of business on such record date, and no additional
interest will be payable to Holders of the Securities who tender Securities
pursuant to the Asset Disposition Offer.
75
(3) On or before the Asset Disposition Purchase Date, the Company
will, to the extent lawful, accept for payment, on a pro rata basis to the
extent necessary, the Asset Disposition Offer Amount of Securities and Pari
Passu Notes or portions of Securities and Pari Passu Notes so validly tendered
and not properly withdrawn pursuant to the Asset Disposition Offer, or if less
than the Asset Disposition Offer Amount has been validly tendered and not
properly withdrawn, all Securities and Pari Passu Notes so validly tendered and
not properly withdrawn, in each case in integral multiples of $1,000. The
Company will deliver to the Trustee an Officers' Certificate stating that such
Securities or portions thereof were accepted for payment by the Company in
accordance with the terms of this SECTION 3.7 and, in addition, the Company will
deliver all certificates and notes required, if any, by the agreements governing
the Pari Passu Notes. The Company or the Paying Agent, as the case may be, will
promptly (but in any case not later than five Business Days after termination of
the Asset Disposition Offer Period) mail or deliver to each tendering Holder of
Securities or holder or lender of Pari Passu Notes, as the case may be, an
amount equal to the purchase price of the Securities or Pari Passu Notes so
validly tendered and not properly withdrawn by such holder or lender, as the
case may be, and accepted by the Company for purchase, and the Company will
promptly issue a new Security, and the Trustee, upon delivery of an Officers'
Certificate from the Company will authenticate and mail or deliver such new
Security to such Holder, in a principal amount equal to any unpurchased portion
of the Security surrendered; PROVIDED that each such new Security will be in a
principal amount of $1,000 or an integral multiple of $1,000. In addition, the
Company will take any and all other actions required by the agreements governing
the Pari Passu Notes. Any Security not so accepted will be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Asset Disposition Offer on or prior to the Asset
Disposition Purchase Date.
For the purposes of this SECTION 3.7, the following will be deemed
to be cash:
(1) the assumption by the transferee of Indebtedness (other
than Senior Subordinated Indebtedness, Subordinated
Obligations or Disqualified Stock) of the Company or
Indebtedness (other than Guarantor Senior Subordinated
Indebtedness, Guarantor Subordinated Obligations or
Preferred Stock) of any Restricted Subsidiary of the
Company and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in
connection with such Asset Disposition (in which case the
Company will, without further action, be deemed to have
applied such deemed cash to Indebtedness in accordance with
SECTION 3.7(a) above);
(2) properties and assets to be owned by the Company or any
Restricted Subsidiary and used in a business that is a
Related Business engaged in business activities of the kind
performed by the Company on the Issue Date (a "Similar
Business") or Capital Stock in one or more Persons engaged
in a Similar Business that are or thereby become Restricted
Subsidiaries of the Company (in which case the Company
will, without further action, be deemed to have applied
such deemed cash to an investment in Additional Assets in
accordance with SECTION 3.7(a)(3)(b) above); and
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(3) securities, notes or other obligations received by the
Company or any Restricted Subsidiary of the Company from
the transferee that are promptly converted by the Company
or such Restricted Subsidiary into cash.
(d) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
SECTION 3.7. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this SECTION 3.7, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue of any
conflict.
(e) The provisions under this SECTION 3.7 relative to the Company's
obligations to make an offer to repurchase the Securities as a result of an
Asset Disposition may be waived or modified with the written consent of the
Holders of a majority in principal amount of the Securities.
SECTION 3.8. LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into or conduct any transaction (including the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Company (an "AFFILIATE TRANSACTION") UNLESS:
(1) the terms of such Affiliate Transaction are no less
favorable to the Company or such Restricted Subsidiary, as
the case may be, than those that could be obtained in a
comparable transaction at the time of such transaction in
arm's-length dealings with a Person who is not such an
Affiliate;
(2) in the event such Affiliate Transaction involves aggregate
consideration in excess of $5.0 million, the terms of such
transaction have been approved by a majority of the members
of the Board of Directors of the Company and by a majority
of the members of such Board having no personal stake in
such transaction, if any (and such majority or majorities,
as the case may be, determines that such Affiliate
Transaction satisfies the criteria in clause (1) above);
and
(3) in the event such Affiliate Transaction involves aggregate
consideration in excess of $10.0 million, the Company has
received a written opinion from an independent investment
banking, accounting or appraisal firm of nationally
recognized standing that such Affiliate Transaction is not
materially less favorable than those that could reasonably
have been obtained in a comparable transaction at such time
on an arm's length basis from a Person that is not an
Affiliate.
(b) SECTION 3.8(a) will not apply to:
(1) any Restricted Payment (other than a Restricted Investment)
permitted to be made pursuant to SECTION 3.4 of this
Indenture;
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(2) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the
funding of, employment agreements and arrangements, options
to purchase Capital Stock of the Company and equity
ownership, restricted stock plans, long-term incentive
plans, stock appreciation rights plans, participation plans
or similar employee benefits plans approved by the Board of
Directors;
(3) the grant of options (and the exercise thereof) to purchase
Capital Stock of the Company or similar rights to employees
and directors of the Company pursuant to plans approved by
the Board of Directors;
(4) loans or advances to employees, officers or directors in
the ordinary course of business of the Company or any of
its Restricted Subsidiaries but in any event not to exceed
$5.0 million in the aggregate outstanding at any one time
with respect to all loans or advances made since the Issue
Date;
(5) any transaction between the Company and a Restricted
Subsidiary (other than a Receivables Entity) or between
Restricted Subsidiaries (other than a Receivables Entity or
Receivables Entities) and Guarantees issued by the Company
or a Restricted Subsidiary for the benefit of the Company
or a Restricted Subsidiary, as the case may be, in
accordance with SECTION 3.3;
(6) the payment of reasonable and customary fees paid to, and
indemnity provided on behalf of, officers, directors or
employees of the Company or any Restricted Subsidiary of
the Company or the payment of any director's and officer's
insurance premiums;
(7) the performance of obligations of the Company or any of its
Restricted Subsidiaries under the terms of any agreement to
which the Company or any of its Restricted Subsidiaries is
a party as of or on the Issue Date (including the
Recapitalization Agreement, the Senior Credit Agreement,
the Stockholders' Agreement and the registration rights
agreement to be entered into on the Issue Date among
Holdings and the stockholders of Holdings parties thereto,
but excluding the leases and rental agreements referred to
in clause (11)), in each case, as these agreements may be
amended, modified, supplemented, extended or renewed from
time to time; PROVIDED, HOWEVER, that any future amendment,
modification, supplement, extension or renewal entered into
after the Issue Date will be permitted to the extent that
its terms are not more disadvantageous to the Holders of
the Securities than the terms of the agreements in effect
on the Issue Date;
(8) sales or other transfers or dispositions of accounts
receivable and other related assets customarily transferred
in an asset securitization transaction involving accounts
receivable to a Receivables Entity in a Qualified
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Receivables Transaction, and acquisitions of Permitted
Investments in connection with a Qualified Receivables
Transaction;
(9) transactions with suppliers or other purchasers for the
sale or purchase of goods in the ordinary course of
business and otherwise in accordance with the terms of this
Indenture which are fair to the Company and its Restricted
Subsidiaries, in the good faith determination of the Board
of Directors of the Company or the senior management of the
Company and are on terms at least as favorable as might
reasonably have been obtained from an unaffiliated party;
(10) the issuance of Capital Stock (other than Disqualified
Stock) of the Company to any Permitted Holder or any
Related Person;
(11) the performance by the Company and its Restricted
Subsidiaries of their obligations under leases and rental
agreements with Image Properties, LLC (a) which leases and
rental agreements are in existence on the Issue Date and
any extensions, renewals or replacements thereof which are
entered into from time to time after the Issue Date so long
as such extensions, renewals or replacements are approved
by a majority of the disinterested members of the Board of
Directors of the Company and determined to be no less
favorable to the Company or such Restricted Subsidiary than
those that could be obtained in a comparable transaction at
the time of such extension, renewal or replacement in
arm's-length dealings with a Person who is not an Affiliate
and (b) which leases and rental agreements are entered into
after the Issue Date, and any extensions, renewals or
replacements thereof, so long as (i) such transactions are
approved by a majority of the disinterested members of the
Board of Directors of the Company, (ii) such transactions
are determined to be no less favorable to the Company or
such Restricted Subsidiary than those that could be
obtained in a comparable transaction at the time of such
lease or rental agreement in arm's-length dealings with a
Person who is not an Affiliate and (iii) the rental expense
to be paid in the aggregate under all such leases and
rental agreements entered into following the Issue Date
shall not exceed $2.5 million per year; and
(12) the provision by Persons who may be deemed Affiliates or
stockholders of the Company (other than X.X. Xxxxxx
Partners, LLC and Persons directly or indirectly controlled
by X.X. Xxxxxx Partners, LLC) of investment banking,
commercial banking, trust, lending or financing,
investment, underwriting, placement agent, financial
advisory or similar services to the Company or its
Subsidiaries performed after the Issue Date.
SECTION 3.9. CHANGE OF CONTROL. If a Change of Control occurs, each
registered 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 at a purchase price in cash equal to 101% of the
principal amount of the Securities plus accrued and
79
unpaid interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); PROVIDED, HOWEVER, that notwithstanding the
foregoing, the Company shall not be obligated to repurchase the Securities
pursuant to this SECTION 3.9 if the Company has exercised its right to redeem
all of the Securities pursuant to the terms of SECTION 5.1.
Within 30 days following any Change of Control, the Company shall
mail a notice (the "CHANGE OF CONTROL OFFER") to each registered Holder with a
copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such
Holder's Securities at a purchase price in cash equal to
101% of the principal amount of such Securities plus
accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on a
record date to receive interest on the relevant interest
payment date) (the "CHANGE OF CONTROL PAYMENT");
(2) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed)
(the "CHANGE OF CONTROL PAYMENT DATE"); and
(3) the procedures determined by the Company, consistent with
this Indenture, that a Holder must follow in order to have
its Securities repurchased.
On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(1) accept for payment all Securities or portions of Securities
(in integral multiples of $1,000) properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Securities or portions
of Securities so tendered; and
(3) 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 of Securities being purchased by the
Company.
The Paying Agent shall promptly mail to each Holder of Securities so
tendered the Change of Control Payment for such Securities, and the Trustee
shall 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 shall be in a principal amount of $1,000 or an integral multiple of
$1,000.
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If the Change of Control Payment Date is on or after an interest
record date and on or before the related interest payment date, any accrued and
unpaid interest, if any, will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender pursuant to the Change of Control
Offer.
Prior to mailing a Change of Control Offer, and as a condition to
such mailing, (i) all Senior Indebtedness must be repaid in full or the Company
must offer to repay all Senior Indebtedness and make payment to the holders that
accept such offer and obtain waivers of any default from the remaining holders
of such Senior Indebtedness or (ii) the requisite holders of each issue of
Senior Indebtedness shall have consented to such Change of Control Offer being
made and waived the default, if any, caused by the Change of Control. The
Company covenants to effect such repayment or obtain such consent and waiver
within 30 days following any Change of Control, it being a Default of this
SECTION 3.9 if the Company fails to comply with such covenant.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
SECTION 3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue of the
conflict.
SECTION 3.10. LIMITATION ON SALE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES. The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Voting Stock of any Restricted Subsidiary or to issue any of the Voting
Stock of a Restricted Subsidiary (other than, if necessary, shares of its Voting
Stock constituting directors' qualifying shares or shares of Voting Stock
required by applicable healthcare laws to be held by Persons other than the
Company) to any Person except:
(1) to the Company or a Wholly Owned Subsidiary (other than a
Receivables Entity); or
(2) in compliance with SECTION 3.7 and immediately after giving
effect to such issuance or sale, such Restricted Subsidiary
would either (a) continue to be a Restricted Subsidiary or
(b) if such Restricted Subsidiary would no longer be a
Restricted Subsidiary, any Investment in such Person
remaining after giving effect to such issuance or sale
would have been
81
permitted to be made pursuant to SECTION 3.4 if made on the
date of such issuance or sale.
Notwithstanding the preceding paragraph, the Company may sell all
the Voting Stock of a Restricted Subsidiary as long as the Company complies with
the terms of SECTION 3.7.
SECTION 3.11. LIMITATION ON LAYERING. The Company shall not Incur
any Indebtedness if such Indebtedness is contractually subordinate or junior in
ranking in any respect to any Senior Indebtedness unless such Indebtedness is
Senior Subordinated Indebtedness or is a Subordinated Obligation. No Guarantor
shall Incur any Indebtedness if such Indebtedness is contractually subordinate
or junior in ranking in any respect to any Guarantor Senior Indebtedness of such
Guarantor unless such Indebtedness is Guarantor Senior Subordinated Indebtedness
of such Guarantor or is a Guarantor Subordinated Obligation.
SECTION 3.12. FUTURE SUBSIDIARY GUARANTORS. After the Issue Date,
the Company shall cause each Domestic Restricted Subsidiary (other than a
Receivables Entity) created or acquired by the Company or one or more of its
Domestic Restricted Subsidiaries to execute and deliver to the Trustee a
supplemental indenture, in the form set forth as EXHIBIT C to this Indenture,
pursuant to which such Domestic Restricted Subsidiary will unconditionally
Guarantee, on a joint and several basis, the full and prompt payment of the
principal of, premium, if any, and interest on the Securities on a senior
subordinated basis.
SECTION 3.13. LIMITATION ON LINES OF BUSINESS. The Company shall
not, and shall not permit any Restricted Subsidiary to, engage in any business
other than a Related Business.
SECTION 3.14. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain in The City of New York, an office or agency where the Securities may
be presented or surrendered for payment, where, if applicable, the Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The principal corporate trust office of the Trustee, or
if the Trustee's principal corporate trust office is not located in The City of
New York, any other office or agency maintained by the Trustee in The City of
New York (the "CORPORATE TRUST OFFICE"), shall be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York
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for such purposes. The Company will give prompt written notice to the Trustee of
any such designation or rescission and any change in the location of any such
other office or agency.
SECTION 3.15. CORPORATE EXISTENCE. Subject to ARTICLE IV and SECTION
11.2, the Company shall do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate,
partnership, limited liability or other existence of each Restricted Subsidiary
and the rights (charter and statutory) licenses and franchises of the Company
and each Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be
required to preserve any such existence (except the Company), right, license or
franchise if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and each of its Restricted Subsidiaries, taken as a whole, and that
the loss thereof would not have a material adverse effect on the ability of the
Company to perform its obligations under the Securities or this Indenture, and
PROVIDED, FURTHER, the Company and each of its Restricted Subsidiaries may merge
in accordance with SECTIONS 4.1 and 11.2.
SECTION 3.16. PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Restricted Subsidiary or upon the income,
profits or property of the Company or any Restricted Subsidiary and (ii) all
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a material liability or lien upon the property of the Company or any
Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate reserves, if
necessary (in the good faith judgment of management of the Company), are being
maintained in accordance with GAAP or where the failure to pay or discharge the
same would not have a material adverse effect on the ability of the Company to
perform its obligations under the Securities or this Indenture.
SECTION 3.17. PAYMENTS FOR CONSENT. Neither the Company nor any of
its Restricted Subsidiaries shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fees or otherwise, to any
Holder of any Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid or is paid to all Holders of the
Securities that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or amendment.
SECTION 3.18. COMPLIANCE CERTIFICATE. The Company shall deliver to
the Trustee within 120 days after the end of each Fiscal Year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they do,
the certificate shall describe the Default or Event of Default, its status and
the action the Company is taking or proposes to take with respect thereto. The
Company also shall comply with TIA Section 314(a)(4).
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SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20. STATEMENT BY OFFICERS AS TO DEFAULT. The Company shall
deliver to the Trustee, as soon as possible and in any event within 30 days
after the Company becomes aware of the occurrence of any Event of Default or an
event which, with notice or the lapse of time or both, would constitute an Event
of Default, an Officers' Certificate setting forth the details of such Event of
Default or default, its status and the action which the Company proposes to take
with respect thereto.
ARTICLE IV
SUCCESSOR COMPANY
SECTION 4.1. MERGER AND CONSOLIDATION. The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, UNLESS:
(1) the resulting, surviving or transferee Person (the
"SUCCESSOR COMPANY") shall be a corporation, partnership,
trust or limited liability company organized and existing
under the laws of the United States of America, any State
of the United States or the District of Columbia and the
Successor Company (if not the Company) shall expressly
assume, by supplemental indenture, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Securities and
this Indenture;
(2) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the
Successor Company or any Subsidiary of the Successor
Company as a result of such transaction as having been
Incurred by the Successor Company or such Subsidiary at the
time of such transaction), no Default or Event of Default
shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least an
additional $1.00 of Indebtedness pursuant to SECTION 3.3(a)
of this Indenture;
(4) each Guarantor (unless it is the other party to the
transactions above, in which case clause (1) shall apply)
shall have by supplemental indenture confirmed that its
Notes Guarantee shall apply to such Person's obligations in
respect of this Indenture and the Securities and its
obligations under the Registration Rights Agreement shall
continue to be in effect; and
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(5) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with this
Indenture.
For purposes of this SECTION 4.1, the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, but, in
the case of a lease of all or substantially all its assets, the predecessor
Company will not be released from the obligation to pay the principal of and
interest on the Securities. Solely for the purpose of computing amounts
described in clause (c)(i) of SECTION 3.4(a), the Successor Company shall only
be deemed to have succeeded and be substituted for the Company with respect to
periods subsequent to the effective time of such merger, consolidation,
combination or transfer of assets.
The Company shall not permit any Subsidiary Guarantor to consolidate
with or merge with or into any Person (other than another Subsidiary Guarantor)
unless either
(A) (i) the resulting, surviving or transferee Person shall be
a corporation, partnership, trust or limited liability
company organized and existing under the laws of the United
States of America, any State of the United States or the
District of Columbia and such Person (if not such
Subsidiary Guarantor) shall expressly assume, by
supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the
obligations of such Subsidiary Guarantor under its Notes
Guarantee;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the
resulting, surviving or transferee Person or any Restricted
Subsidiary as a result of such transaction as having been
Incurred by such Person or such Restricted Subsidiary at
the time of such transaction), no Default or Event of
Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with the
Indenture; or
(B) such transaction results in the Company receiving cash or
other property (other than Capital Stock representing a
controlling interest in the
85
successor entity), and the transaction is made in
compliance with the covenant described under Section 3.7.
In addition, the Company shall not permit Holdings to consolidate
with or merge with or into any Person (other than the Company or another
Guarantor) unless the resulting, surviving or transferee Person will be a
corporation, partnership, trust or limited liability company organized and
existing under the laws of the United States of America, any State of the United
States or the District of Columbia and such Person (if not Holdings) shall
expressly assume, by supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of Holdings
under its Notes Guarantee.
Notwithstanding the preceding clause (3) of the first sentence of
this SECTION 4.1, (x) any Restricted Subsidiary of the Company (other than a
Receivables Entity) may consolidate with, merge into or transfer all or part of
its properties and assets to the Company or a Subsidiary that is a Guarantor and
(y) the Company may merge with an Affiliate incorporated solely for the purpose
of reincorporating the Company in another jurisdiction to realize tax benefits;
PROVIDED that, in the case of a Restricted Subsidiary that merges into the
Company, the Company shall not be required to comply with the preceding clause
(5).
ARTICLE V
REDEMPTION OF SECURITIES
SECTION 5.1. OPTIONAL REDEMPTION. (a) The Securities may be
redeemed, as a whole or from time to time in part, subject to the conditions and
at the redemption prices specified in paragraph 5 of the form of Securities set
forth in Exhibits A and B hereto, which are hereby incorporated by reference and
made a part of this Indenture, together with accrued and unpaid interest to the
Redemption Date.
(b) At any time prior to August 15, 2007, within 90 days following
the occurrence of a Change of Control, the Company may redeem the Securities, in
whole but not in part, at a redemption price equal to 100% of the principal
amount thereof plus the Applicable Premium plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date). Notice of redemption of the Securities pursuant to this SECTION 5.1(b)
shall be mailed to Holders of the Securities not more than 60 days following the
occurrence of a Change of Control, which notice shall state the redemption date
(which shall be no earlier than 30 days nor later than 60 days from the date
such notice is mailed).
SECTION 5.2. APPLICABILITY OF ARTICLE. Redemption of Securities at
the election of the Company or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and
this Article.
SECTION 5.3. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem any Securities pursuant to SECTION 5.1 shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company,
the Company shall, upon
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not later than the earlier of the date that is 30 days prior to the Redemption
Date fixed by the Company or the date on which notice is given to the Holders
(except as provided in SECTION 5.5 or unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to SECTION 5.4. Any such notice may be
cancelled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
SECTION 5.4. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If
less than all the Securities are to be redeemed at any time pursuant to an
optional redemption, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a PRO RATA
basis among the classes of Securities, by lot or by such other method as the
Trustee in its sole discretion shall deem fair and appropriate (and in such
manner as complies with applicable legal requirements) and which may provide for
the selection for redemption of portions of the principal of the Securities;
PROVIDED, HOWEVER, that no such partial redemption shall reduce the portion of
the principal amount of a Security not redeemed to less than $1,000.
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 method it has chosen for the selection of Securities
and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to 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 5.5. NOTICE OF REDEMPTION. Notice of redemption shall be
given in the manner provided for in SECTION 13.2 not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed. At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at the Company's expense; PROVIDED, HOWEVER, that the
Company shall deliver to the Trustee, at least 45 days prior to the Redemption
Date, an Officers' Certificate requesting that the Trustee give such notice at
the Company's expense and setting forth the information to be stated in such
notice as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the redemption price and the amount of accrued interest to
the Redemption Date payable as provided in SECTION 5.7, if
any,
(3) if less than all outstanding Securities are to be redeemed,
the identification of the particular Securities (or portion
thereof) to be redeemed, as well as
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the aggregate principal amount of Securities to be redeemed
and the aggregate principal amount of Securities to be
outstanding after such partial redemption,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on
and after the Redemption Date, upon surrender of such
Security, the Holder will receive, without charge, a new
Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the redemption price (and
accrued interest, if any, to the Redemption Date payable as
provided in SECTION 5.7) will become due and payable upon
each such Security, or the portion thereof, to be redeemed,
and, unless the Company defaults in making the redemption
payment, that interest on Securities called for redemption
(or the portion thereof) will cease to accrue on and after
said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued
interest, if any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to
the accuracy or correctness of the CUSIP number, if any,
listed in such notice or printed on the Securities, and
(10) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 5.6. DEPOSIT OF REDEMPTION PRICE. Prior to 11:00 a.m., New
York City time, on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in SECTION 2.4) an amount of
money sufficient to pay the redemption price of, and accrued interest on, all
the Securities which are to be redeemed on that date other than Securities or
portions of Securities called for redemption that have been delivered by the
Company to the Trustee for cancellation.
SECTION 5.7. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, the Securities or portions of
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the redemption price therein specified (together with accrued
interest, if any, to the Redemption Date), and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the redemption price, together with accrued interest,
if any, to the Redemption Date (subject to the rights of
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Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 5.8. SECURITIES REDEEMED IN PART. Any Security which is to
be redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to SECTION 3.14 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of such
Security at the expense of the Company, a new Security or Securities, of any
authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered, PROVIDED, that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT. Each of the following is an Event of
Default:
(1) default in any payment of interest or additional interest
(as required by the Registration Rights Agreement) on any
Security when the same becomes due and payable, and such
default continues for a period of 30 days, whether or not
such payment is prohibited by ARTICLE X or XII;
(2) default in the payment of principal of or premium, if any,
on any Security when the same becomes due and payable at
its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise, whether
or not such payment is prohibited by ARTICLE X or XII;
(3) failure by the Company or any Guarantor to comply with its
obligations under ARTICLE IV or SECTION 11.2;
(4) failure by the Company to comply with any of its
obligations under SECTIONS 3.2, 3.3, 3.4, 3.5, 3.6, 3.7,
3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16 and 3.17
(in each case, other than a failure to purchase Securities
when required pursuant to SECTION 3.7 or 3.9, which failure
shall constitute an Event of Default under clause (2) above
and other than a failure to comply with ARTICLE IV or
SECTION 11.2 which failure shall constitute an Event of
Default covered by clause (3)) and such failure continues
for 30 days after the notice specified below (with such
notice
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only given after the expiry of the periods permitted to
perform an obligation);
(5) the Company defaults in the performance of or a breach by
the Company of any other covenant or agreement in this
Indenture or under the Securities (other than those
referred to in (1), (2), (3) or (4) above) and such default
continues for 60 days after the notice specified below
(with such notice only given after the expiry of the
periods permitted to perform an obligation);
(6) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), other than Indebtedness owed to
the Company or a Restricted Subsidiary, whether such
Indebtedness or guarantee now exists, or is created after
the date of this Indenture, which default:
(a) is caused by a failure to pay principal of, or
interest or premium, if any, on such Indebtedness
after final maturity (after giving effect to any
applicable grace period provided in such
Indebtedness) ("PAYMENT DEFAULT"); or
(b) results in the acceleration of such Indebtedness
prior to its maturity (the "CROSS ACCELERATION
PROVISION");
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a
payment default or the maturity of which has been so
accelerated, aggregates $10.0 million or more or its
foreign currency equivalent at the time;
(7) (a) the Company or a Significant Subsidiary (other than any
Receivables Entity) or a group of Restricted Subsidiaries
(other than Receivables Entities) that, taken together (as
of the latest audited consolidated financial statements for
Holdings, the Company and its Restricted Subsidiaries),
would constitute a Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or
proceeding;
(ii) consents to the entry of judgment,
decree or order for relief against it
in an involuntary case or proceeding;
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(iii) consents to the appointment of a
Custodian of it or for any
substantial part of its property;
(iv) makes a general assignment for the
benefit of its creditors;
(v) consents to or acquiesces in the
institution of a bankruptcy or an
insolvency proceeding against it; or
(vi) takes any corporate action to
authorize or effect any of the
foregoing;
or takes any comparable action under any foreign laws
relating to insolvency; or
(b) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or
any Significant Subsidiary (other
than any Receivables Entity) or a
group of Restricted Subsidiaries
(other than Receivables Entities)
that, taken together (as of the
latest audited consolidated financial
statements for Holdings, the Company
and its Restricted Subsidiaries),
would constitute a Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company
or any Significant Subsidiary (other
than any Receivables Entity) or a
group of Restricted Subsidiaries
(other than Receivables Entities)
that, taken together (as of the
latest audited consolidated financial
statements for Holdings, the Company
and its Restricted Subsidiaries),
would constitute a Significant
Subsidiary or for any substantial
part of its property; or
(iii) orders the winding up or liquidation
of the Company or any Significant
Subsidiary (other than any
Receivables Entity) or a group of
Restricted Subsidiaries (other than
Receivables Entities) that, taken
together (as of the latest audited
consolidated financial statements for
Holdings, the Company and its
Restricted Subsidiaries) would
constitute a Significant Subsidiary;
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or any similar relief is granted under any foreign laws and
the order, decree or relief remains unstayed and in effect
for 60 days;
(8) failure by the Company or any Significant Subsidiary or
group of Restricted Subsidiaries that, taken together (as
of the latest audited consolidated financial statements for
Holdings, the Company and its Restricted Subsidiaries),
would constitute a Significant Subsidiary to pay final
judgments aggregating in excess of $10.0 million or its
foreign currency equivalent at the time (net of any amounts
that a reputable and creditworthy insurance company has
acknowledged liability or coverage for in writing), which
judgments are not paid, discharged or stayed for a period
of 60 days (the "JUDGMENT DEFAULT PROVISION"); or
(9) any Notes Guarantee of Holdings, a Significant Subsidiary,
or a group of Subsidiary Guarantors that, taken together
(as of the latest audited consolidated financial statements
for Holdings, the Company and its Restricted Subsidiaries)
would collectively represent a Significant Subsidiary
ceases to be in full force and effect (except as
contemplated by the terms of this Indenture) or is declared
null and void in a judicial proceeding or any Guarantor
denies or disaffirms its obligations under this Indenture
or its Notes Guarantee.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
Notwithstanding the foregoing, a Default under clauses (4) or (5) of
this SECTION 6.1 will not constitute an Event of Default until the Trustee or
the Holders of 25% or more in principal amount of the outstanding Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified in clauses (4) or (5) of this SECTION 6.1 after
receipt of such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after an
Officer of the Company becomes aware of the occurrence thereof, written notice
in the form of an Officers' Certificate of any Default or Event of Default under
clauses (3), (4), (5), (6), (7), (8) or (9) of this SECTION 6.1, which such
notice shall contain the status thereof and a description of the action being
taken or proposed to be taken by the Company in respect thereof.
SECTION 6.2. ACCELERATION. If an Event of Default (other than an
Event of Default specified in clause (7) of SECTION 6.1) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the outstanding Securities by notice to the Company and
the Trustee, may, and the Trustee at the request of such Holders shall, declare
the principal of, premium, if any, and accrued and unpaid interest, if any, on
all the Securities to be due and payable. Upon such a declaration, such
principal, premium and accrued and unpaid interest shall be due and payable
immediately. In the event of a declaration of
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acceleration of the Securities because an Event of Default set forth in clause
(6) of SECTION 6.1 has occurred and is continuing, such declaration of
acceleration of the Securities shall be automatically rescinded and annulled if
the event of default or payment default triggering such Event of Default
pursuant to clause (6) of SECTION 6.1 shall be remedied or cured by the Company
and/or the relevant Restricted Subsidiary of the Company or the holders of the
relevant Indebtedness have rescinded the declaration of acceleration in respect
of such Indebtedness within 20 days after the declaration of acceleration with
respect thereto and if (a) the annulment of the acceleration of the Securities
would not conflict with any judgment or decree of a court of competent
jurisdiction and (b) all existing Events of Default, except nonpayment of
principal, premium or interest on the Securities that became due solely because
of the acceleration of the Securities, have been cured or waived. If an Event of
Default specified in clause (7) of SECTION 6.1 above occurs and is continuing,
the principal of, premium, if any, and accrued and unpaid interest on all the
Securities will become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. No such
rescission shall affect any subsequent Default or Event of Default or impair any
right consequent thereto.
SECTION 6.3. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of (or premium, if any) or interest on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may (a)
waive, by their consent (including, without limitation consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), an existing Default or Event of Default and its consequences except
(i) a Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on a Security or (ii) a Default or Event of Default
in respect of a provision that under SECTION 9.2 cannot be amended without the
consent of each Securityholder affected and (b) rescind any such acceleration
with respect to the Securities and its consequences if (1) rescission would not
conflict with any judgment or decree of a court of competent jurisdiction and
(2) all existing Events of Default, other than the nonpayment of the principal
of, premium, if any, and interest on the Securities that have become due solely
by such declaration of acceleration, have been cured or waived. When a Default
or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
consequent right.
SECTION 6.5. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law
93
or this Indenture or, subject to SECTIONS 7.1 and 7.2, that the Trustee
determines is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability; PROVIDED, HOWEVER, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.6. LIMITATION ON SUITS. Subject to SECTION 6.7, a
Securityholder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) such Holder has previously given to the Trustee written
notice stating that an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the
outstanding Securities have requested that the Trustee to
pursue the remedy;
(3) such Holders have offered to the Trustee reasonable
security or indemnity against any loss, liability or
expense;
(4) the Trustee has not complied with such request within 60
days after receipt of the request and the offer of security
or indemnity; and
(5) the Holders of a majority in principal amount of the
outstanding Securities have not given the Trustee a
direction that, in the opinion of the Trustee, is
inconsistent with such request within such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture (including, without limitation, SECTION
6.6), the right of any Holder to receive payment of principal of, premium (if
any) or interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in clauses (1) or (2) of SECTION 6.1 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in SECTION 7.7.
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any
94
such judicial proceeding is hereby authorized by each Holder to make 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 it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
SECTION 7.7.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this ARTICLE VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under SECTION 7.7;
SECOND: to Securityholders 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 and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to SECTION 6.7 or a
suit by Holders of more than 10% in outstanding principal amount of the
Securities.
ARTICLE VII
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise 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 such Person's own affairs; provided that if an Event of
Default occurs and is continuing, the Trustee will be under no obligation to
exercise the rights of powers under this Indenture at the request or direction
of any of the Holders unless such Holders have offered the Trustee reasonable
indemnity or security against loss, liability or expense;
(b) Except during the continuance of an Event of Default:
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(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates, opinions or orders furnished to the Trustee
and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions
which by any provisions hereof are specifically required to
be furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture
(but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved
that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with
a direction received by it pursuant to SECTION 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
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(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
(including reasonable attorneys' fees and expenses) and liabilities that might
be incurred by it in compliance with such request or direction.
(k) The permissive rights of the Trustee hereunder shall not be
construed as duties.
SECTION 7.2. RIGHTS OF TRUSTEE. Subject to SECTION 7.1:
(a) The Trustee may conclusively rely on any document (whether in
its original or facsimile form) reasonably believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers, unless the Trustee's conduct constitutes willful misconduct or
negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect of any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with SECTIONS 7.10 and 7.11.
SECTION 7.4. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication. The Trustee shall not be responsible
for ensuring that the rate of
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interest due and payable with respect to the Securities does not exceed the
highest legal rate of interest permissible under applicable federal or state
law.
SECTION 7.5. NOTICE OF DEFAULTS. If a Default or Event of Default
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Securityholder notice of the Default or Event of
Default within the earlier of 90 days after it occurs or 30 days after the
Trustee has knowledge of such default. Except in the case of a Default or Event
of Default in payment of principal of, premium (if any), or interest on any
Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long a committee of its Trust Officers in good faith determines
that withholding the notice is in the interests of Securityholders. Nothing
herein shall be construed to require the Trustee to independently investigate
the Company's compliance with its covenants hereunder.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b). The Trustee shall also transmit by mail all reports required by TIA
Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. COMPENSATION AND INDEMNITY. The Company shall pay to
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances of
the Trustee's agents, counsel, accountants and experts. The Company shall
indemnify the Trustee against any and all loss, liability, damages, claims or
expense (including reasonable attorneys' fees and expenses) incurred by it
without negligence or willful misconduct on its part in connection with the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this
SECTION 7.7) and of defending itself against any claims (whether asserted by any
Securityholder, the Company or otherwise). The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall provide
reasonable cooperation at the Company's expense in the defense. The Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel provided that the Company shall not be required to pay such fees and
expenses if it assumes the
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Trustee's defense, and, in the reasonable judgment of outside counsel to the
Trustee, there is no conflict of interest between the Company and the Trustee in
connection with such defense. The Company shall not be under any obligation to
pay for any written settlement without its consent, which consent shall not be
unreasonably delayed, conditioned or withheld. The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct or negligence.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this SECTION 7.7 shall not be
subordinate to any other liability or Indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture or the Trustee's resignation or removal
hereunder. When the Trustee incurs expenses after the occurrence of a Default
specified in clause (7) of SECTION 6.1 with respect to the Company, the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with SECTION 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of the Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in SECTION 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
at least 10% in principal amount of
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the Securities may petition, at the Company's expense, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with SECTION 7.10, unless the
Trustee's duty to resign is stayed as provided in Section 310(b) of the TIA, any
Securityholder who has been a bona fide Holder of a Security for at least six
months may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under SECTION 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture, any of the 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 to the Trustee; and in all such cases such certificates 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.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall have
a combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 7.12. TRUSTEE'S APPLICATION FOR INSTRUCTION FROM THE
COMPANY. Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in
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writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. (a)
Subject to SECTION 8.1(c), when (i)(x) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to SECTION 2.10)
for cancellation or (y) all outstanding Securities not theretofore delivered for
cancellation have become due and payable, whether at maturity or upon redemption
or will become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption pursuant to ARTICLE V hereof and the Company
or any Guarantor irrevocably deposits or causes to be deposited with the Trustee
as trust funds in trust solely for the benefit of the Holders money in U.S.
dollars, non-callable U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient without consideration of any reinvestment of
interest to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation for principal, premium, if
any, and accrued interest to the date of maturity or redemption; (ii) no Default
or Event of Default shall have occurred and be continuing on the date of such
deposit or shall occur as a result of such deposit and such deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound; (iii) the Company or any Guarantor has paid
or caused to be paid all sums payable under this Indenture and the Securities;
and (iv) the Company has delivered irrevocable instructions to the Trustee under
this Indenture to apply the deposited money toward the payment of such
Securities at maturity or the Redemption Date, as the case may be, then the
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company (accompanied by an Officers' Certificate and an Opinion of
Counsel stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to SECTIONS 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("LEGAL DEFEASANCE OPTION"), and after giving effect to such legal defeasance,
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under SECTIONS 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.17 and 4.1(3) and 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 with such covenants shall
no longer constitute a Default or an Event of Default under SECTIONS 6.1(3),
6.1(4) and 6.1(5) and the operation of SECTIONS 6.1(6), 6.1(7) (but only with
respect to a Significant Subsidiary or group of Restricted Subsidiaries that
would constitute a Significant Subsidiary), 6.1(8) and 6.1(9), and the events
specified in such Sections shall no longer constitute an Event of Default
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(clause (ii) being referred to as the "COVENANT DEFEASANCE OPTION"), but except
as specified above, the remainder of this Indenture and the Securities shall be
unaffected thereby. The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. If the
Company exercises its covenant defeasance option, the Company may elect to have
any Notes Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default, and the Notes
Guarantees in effect at such time shall terminate. If the Company exercises its
covenant defeasance option, payment of the Securities may not be accelerated
because of an Event of Default specified in SECTIONS 6.1(3), 6.1(4) (as such
Section relates to SECTIONS 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11,
3.12, 3.13 and 3.17), 6.1(5), 6.1(6), 6.1(7) (but only with respect to a
Significant Subsidiary or group of Restricted Subsidiaries that would constitute
a Significant Subsidiary), 6.1(8) or 6.1(9) or because of the failure of the
Company to comply with SECTION 4.1(3).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding the provisions of SECTIONS 8.1(a) and (b), the
Company's obligations in SECTIONS 2.2, 2.3, 2.4, 2.5, 2.6, 2.10, 2.11, 2.12,
3.1, 3.14, 3.15, 3.16, 3.18, 3.19, 3.20, 6.7, 7.7, 7.8 and in this ARTICLE VIII
shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in SECTIONS 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee for
the benefit of the Holders money in U.S. dollars or U.S. Government
Obligations or a combination thereof, the principal of and interest
(without reinvestment) on which will be sufficient, or a combination
thereof sufficient, for the payment of principal, premium, if any, and
interest on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, with respect to certain
bankruptcy or insolvency Events of Default, on the 91st day after such date
of deposit;
(4) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default under, this Indenture or
any other material 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;
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(5) the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary assumptions and exclusions) to the effect
that (A) the Securities and (B) assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the deposit
and that no Holder of the Securities is an insider of the Company, 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' right generally;
(6) the deposit does not constitute a default under any other
agreement binding on the Company;
(7) the Company delivers to the Trustee an Opinion of Counsel
(subject to customary assumptions and exclusions) to the effect that the
trust resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940;
(8) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture 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 Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such legal defeasance had
not occurred;
(9) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States to the effect that the
Securityholders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and covenant defeasance and will
be subject to federal income tax on the same amount, in the same manner and
at the same times as would have been the case if such deposit and covenant
defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Securities and this Indenture as
contemplated by this ARTICLE VIII have been complied with.
SECTION 8.3. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
ARTICLE VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
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SECTION 8.4. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money, U.S.
Government Obligations or securities held by them upon payment of all the
obligations under this Indenture.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal of or interest on the Securities that remains
unclaimed for two years, and, thereafter, Securityholders entitled to the money
must look to the Company for payment as general creditors.
SECTION 8.5. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.6. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
ARTICLE VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this ARTICLE VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this ARTICLE VIII; PROVIDED, HOWEVER, that, if
the Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
SECTION 9.1. WITHOUT CONSENT OF HOLDERS. The Company, the Guarantors
and the Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with ARTICLE IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities or to release a
Subsidiary Guarantor in accordance with this Indenture;
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(5) to secure the Securities;
(6) to add to the covenants of the Company and the Guarantors for
the benefit of the Holders or to surrender any right or power herein
conferred upon the Company;
(7) to make any change that does not adversely affect the rights of
any Securityholder;
(8) to comply with any requirements of the SEC in connection with
the qualification of this Indenture under the TIA;
(9) to provide for the issuance of the Exchange Securities, which
will have terms substantially identical in all respects to the Initial
Securities or the Additional Securities, as the case may be (except that
the transfer restrictions contained in the Initial Securities or the
Additional Securities, if any, will be modified or eliminated, as
appropriate), and which will be treated, together with any outstanding
Initial Securities or Additional Securities, as a single class of
securities; or
(10) make any change in the subordination provisions of this
Indenture that would limit or terminate the benefits available to any
holder of Senior Indebtedness of the Company or a holder of Guarantor
Senior Indebtedness (or any Representative thereof) under such
subordination provisions.
However, no amendment may be made to the provisions of ARTICLE X or XII that
adversely affect the rights of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
Representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.2. WITH CONSENT OF HOLDERS. The Company, the Guarantors
and the Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Securities) and compliance with the
provisions of this Indenture may be waived with the written consent of the
Holders of at least a majority in principal amount of the Securities then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Securities). However,
without the consent of each Securityholder affected, an amendment or waiver may
not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the stated rate of or extend the stated time for payment
of interest or additional interest on any Security;
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(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be
redeemed or repurchased as described under ARTICLE V, whether through an
amendment or waiver of provisions in the covenants, definitions or
otherwise;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder to receive payment of, premium,
if any, principal of and interest on such Holder's Securities on or after
the due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(7) make any change to the amendment provisions which require each
Holder's consent or in the waiver provisions;
(8) make any change to ARTICLE X or XII that adversely affects the
rights of any Holder of Securities; or
(9) modify the Notes Guarantees in any manner adverse to the holders
of the Securities.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof. A consent
to any amendment or waiver under this Indenture by any Holder of the Securities
given in connection with a tender of such Holder's Securities will not be
rendered invalid by such tender.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.1 or 9.2 as applicable.
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The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become
valid or effective more than 120 days after such record date.
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this ARTICLE IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to SECTIONS 7.1 AND 7.2) shall be fully protected in
relying upon an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
ARTICLE X
SUBORDINATION
SECTION 10.1. AGREEMENT TO SUBORDINATE. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by, and all other obligations in respect of, the Securities is subordinated in
right of payment, to the extent and in the manner provided in this ARTICLE X, to
the prior payment of all Senior Indebtedness and that the subordination is for
the benefit of and enforceable by the holders of Senior Indebtedness. The
Securities shall in all respects rank PARI PASSU with all other Senior
Subordinated Indebtedness of the Company and only Indebtedness of the Company
that is Senior Indebtedness will rank senior to the Securities in accordance
with the provisions set forth herein. All provisions of this ARTICLE X shall be
subject to SECTION 10.12.
SECTION 10.2. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in a
reorganization, bankruptcy, insolvency, receivership or similar proceeding
relating to the Company or its properties or an assignment for the benefit of
creditors or marshalling of the Company's assets or liabilities:
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(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents of all Senior Indebtedness
(including interest accruing after, or which would accrue but for, the
commencement of any proceeding at the rate specified in the applicable
Senior Indebtedness, whether or not a claim for such interest would be
allowed) before Securityholders shall be entitled to receive any payment of
principal of or interest on or other amounts with respect to the Securities
from the Company; and
(2) until the Senior Indebtedness is paid in full in cash or
Cash Equivalents, any payment or distribution to which Securityholders
would be entitled but for this ARTICLE X shall be made to holders of Senior
Indebtedness, as their respective interests may appear, except that the
holders of the Securities may receive Capital Stock (other than
Disqualified Stock) issued by the Company to pay interest on the Securities
or issued in exchange for the Securities, (ii) securities substantially
identical to the Securities issued by the Company in payment of interest
thereon or (iii) securities issued by the Company which are subordinated to
Senior Indebtedness at least to the same extent as the Securities and
having an Average Life at least equal to the remaining Average Life of the
Securities.
SECTION 10.3. DEFAULT ON SENIOR INDEBTEDNESS. The Company shall not
pay the principal of, premium (if any) or interest on or other payment
obligations in respect of the Securities or make any deposit pursuant to SECTION
8.2 or repurchase, redeem or otherwise retire any Securities (collectively, "pay
the Securities") if (i) any Senior Indebtedness is not paid when due in cash or
Cash Equivalents or (ii) any other default on Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Senior Indebtedness has been paid in
full in cash or Cash Equivalents; PROVIDED, HOWEVER, that the Company may pay
the Securities, without regard to the foregoing, if the Company and the Trustee
receive written notice approving such payment from the Representative of the
Senior Indebtedness with respect to which either of the events set forth in
clause (i) or (ii) of this sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) of the
preceding sentence or a default resulting in acceleration described in clause
(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Company may not pay the Securities for a period (a "PAYMENT BLOCKAGE PERIOD")
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a "BLOCKAGE NOTICE") of such default from the Representative(s)
of the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because such Designated Senior Indebtedness has been repaid in full).
Notwithstanding the provisions of the immediately preceding sentence, unless the
holders of such Designated Senior Indebtedness or the Representative(s) of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Securities after the end of
such Payment Blockage Period (including any missed payments). Not more than one
Blockage
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Notice may be given, and not more than one Payment Blockage may occur, in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness during such period. However, if any Blockage
Notice within such 360-day period is given by or on behalf of any holders of
Designated Senior Indebtedness other than the Bank Indebtedness, the
Representative of the Bank Indebtedness may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any 360 consecutive day period. For purposes of this paragraph, no
default or event of default that existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.4. ACCELERATION OF PAYMENT OF SECURITIES. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representatives) of the acceleration; PROVIDED, HOWEVER, that the
Company and the Trustee shall be obligated to notify such a Representative only
if such Representative has delivered or caused to be delivered to the Company or
the Trustee an address for service of such a notice (and the Company and the
Trustee shall only be obligated to deliver the notice to the address so
specified). If any Designated Senior Indebtedness is outstanding, the Company
shall not pay the Securities until five Business Days after the holders or
Representative(s) of such Designated Senior Indebtedness receives notice of such
acceleration and, thereafter, may pay the Securities, only if this ARTICLE X
otherwise permits payments at that time.
SECTION 10.5. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to Securityholders that because of this ARTICLE X should not have been
made to them, the Securityholders who receive the distribution shall hold it in
trust for holders of Senior Indebtedness and promptly pay it over to them as
their respective interests may appear.
SECTION 10.6. SUBROGATION. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
ARTICLE X to holders of Senior Indebtedness which otherwise would have been made
to Securityholders is not, as between the Company and Securityholders, a payment
by the Company of Senior Indebtedness.
SECTION 10.7. RELATIVE RIGHTS. This ARTICLE X defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
or
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(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions otherwise
payable to Securityholders.
SECTION 10.8. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by the failure of any of them to comply with this
Indenture.
SECTION 10.9. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
SECTION 10.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice in writing satisfactory to it that payments may not be made
under this ARTICLE X. The Company, the Registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; PROVIDED,
HOWEVER, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and the Paying Agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this ARTICLE X with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness; and nothing in ARTICLE VII shall
deprive the Trustee of any of its rights as such holder. Nothing in this ARTICLE
X shall apply to claims of, or payments to, the Trustee under or pursuant to
SECTION 7.7.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE. The failure to make a payment in respect of the Securities,
by reason of any provision in this ARTICLE X, shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
ARTICLE X shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION 10.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under ARTICLE VIII by the Trustee
for the payment of principal of premium, if any, and interest on the Securities
shall not be subordinated to the prior payment of any Senior Indebtedness or
subject to the restrictions set forth in this ARTICLE X, and none of the
Securityholders shall be obligated to pay over any such amount to the Company,
any holder of Senior Indebtedness, or any other creditor of the Company.
SECTION 10.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this ARTICLE X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature
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referred to in SECTION 10.2 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Securityholders or (iii) upon the Representatives for
the holders of Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this ARTICLE X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness to participate in any payment
or distribution pursuant to this ARTICLE X, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this ARTICLE X, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of SECTIONS 7.1 AND 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this ARTICLE X.
SECTION 10.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this ARTICLE X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this ARTICLE X or otherwise.
SECTION 10.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
INDEBTEDNESS ON SUBORDINATION PROVISIONS. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XI
NOTES GUARANTEE
SECTION 11.1. NOTES GUARANTEE. Each Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Guarantor, to each Holder of the
Securities and the Trustee the full and punctual payment when due, whether at
maturity, by acceleration, by redemption or otherwise, of the
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principal of, premium, if any, and interest on the Securities and all other
monetary obligations of the Company under this Indenture (all the foregoing
being hereinafter collectively called the "OBLIGATIONS"). Each Guarantor further
agrees (to the extent permitted by law) that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from it, and that
it will remain bound under this ARTICLE XI notwithstanding any extension or
renewal of any Obligation.
Each Guarantor waives presentation to, demand of payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of each Guarantor hereunder shall
not be affected by (a) the failure of any Holder to assert any claim or demand
or to enforce any right or remedy against the Company or any other person under
this Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Securities
or any other agreement; (d) the release of any security held by any Holder or
the Trustee for the Obligations or any of them; (e) the failure of any Holder to
exercise any right or remedy against any other Guarantor; or (f) any change in
the ownership of the Company.
Each Guarantor further agrees that its Notes Guarantee herein
constitutes a Guarantee of payment when due (and not a Guarantee of collection)
and waives any right to require that any resort be had by any Holder to any
security held for payment of the Obligations.
Except as expressly set forth in SECTIONS 8.1(b) and 11.2, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than payment of the
Obligations in full), including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of such Guarantor as a matter of law or equity.
Each Guarantor agrees that its Notes Guarantee herein shall remain
in full force and effect until payment in full of all the Obligations or such
Notes Guarantee is released upon the merger or the sale of all the Capital Stock
or assets of the Guarantor in compliance with SECTION 3.7 and ARTICLE IV. Each
Guarantor further agrees that its Notes Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any of the Obligations is rescinded
or must otherwise be restored by any Holder upon the bankruptcy or
reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the
112
Company to pay any of the Obligations when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, each Guarantor
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders an amount equal to
the sum of (i) the unpaid amount of such Obligations then due and owing and (ii)
accrued and unpaid interest on such Obligations then due and owing (but only to
the extent not prohibited by law).
Each Guarantor further agrees that, as between such Guarantor, on
the one hand, and the Holders, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in this Indenture
for the purposes of its Notes Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby and (y) in the event of any such declaration of
acceleration of such Obligations, such Obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantor for the
purposes of this Notes Guarantee.
Each Guarantor also agrees to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or the
Holders in enforcing any rights under this Section.
SECTION 11.2. LIMITATION ON LIABILITY; TERMINATION, RELEASE AND
DISCHARGE.
(a) The obligations of each Guarantor hereunder will be limited
to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor (including, without limitation, any
guarantees under the Senior Credit Agreement) and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Notes Guarantee or
pursuant to its contribution obligations under this Indenture, result in the
obligations of such Guarantor under its Notes Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law and not
otherwise being void or voidable under any similar laws affecting the rights of
creditors generally.
(b) Subject to ARTICLE III and ARTICLE IV, each Guarantor may
consolidate with or merge into or sell its assets to the Company or another
Guarantor without limitation. Upon the sale or disposition of a Subsidiary
Guarantor (by merger, consolidation, the sale of its Capital Stock or the sale
of all or substantially all of its assets (other than by lease)) and whether or
not the Subsidiary Guarantor is the surviving corporation in such transaction to
a Person which is not the Company or a Restricted Subsidiary of the Company
(other than a Receivables Entity), which sale or disposition is otherwise in
compliance with this Indenture (including, without limitation, SECTIONS 3.4, 3.7
and 3.10), such Subsidiary Guarantor will be deemed released from all its
obligations under this Indenture and its Notes Guarantee and such Notes
Guarantee will terminate; PROVIDED, HOWEVER, that any such termination will
occur only to the extent that all obligations of such Subsidiary Guarantor under
the Senior Credit Agreement and all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, any other
Indebtedness of the Company or its Restricted Subsidiaries will also terminate
upon such release, sale or transfer.
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(c) Each Guarantor will be deemed released from all its
obligations under this Indenture, its Notes Guarantee and the Registration
Rights Agreement and such Notes Guarantee will terminate upon the legal
defeasance or covenant defeasance of the Securities pursuant to the provisions
of ARTICLE VIII hereof.
(d) A Subsidiary Guarantor will be deemed released and relieved
of its obligations under this Indenture and its Notes Guarantee without any
further action required on the part of the Company or such Subsidiary Guarantor
upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary
in accordance with the terms of this Indenture.
SECTION 11.3. RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees
that to the extent that any Guarantor shall have paid more than its
proportionate share of any payment made on the obligations under the Notes
Guarantees, such Guarantor shall be entitled to seek and receive contribution
from and against the Company or any other Guarantor who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of SECTION 3.6. The provisions of
this SECTION 11.3 shall in no respect limit the obligations and liabilities of
each Guarantor to the Trustee and the Holders and each Guarantor shall remain
liable to the Trustee and the Holders for the full amount guaranteed by such
Guarantor hereunder.
SECTION 11.4. NO SUBROGATION. Notwithstanding any payment or
payments made by each Guarantor hereunder, no Guarantor shall be entitled to be
subrogated to any of the rights of the Trustee or any Holder against the Company
or any other Guarantor or any collateral security or guarantee or right of
offset held by the Trustee or any Holder for the payment of the Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Company or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Trustee and the
Holders by the Company on account of the Obligations are paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Trustee in the exact form received by
such Guarantor (duly indorsed by such Guarantor to the Trustee, if required), to
be applied against the Obligations.
ARTICLE XII
SUBORDINATION OF NOTES GUARANTEES
SECTION 12.1. AGREEMENT TO SUBORDINATE. Each Guarantor agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by, and all other obligations in respect of, the Notes Guarantees are
subordinated in right of payment, to the extent and in the manner provided in
this ARTICLE XII, to the prior payment of all Guarantor Senior Indebtedness of
the applicable Guarantor and that the subordination is for the benefit of and
enforceable by the holders of Guarantor Senior Indebtedness of the applicable
Guarantor. The Notes Guarantees shall in all respects rank PARI PASSU with all
other Guarantor Senior Subordinated Indebtedness of the Guarantor and only
Indebtedness of the Guarantor that is
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Guarantor Senior Indebtedness will rank senior to the Notes Guarantees in
accordance with the provisions set forth herein. All provisions of this ARTICLE
XII shall be subject to SECTION 12.12.
SECTION 12.2. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of any Guarantor to creditors upon a total or
partial liquidation or a total or partial dissolution of any Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to any Guarantor or its properties:
(1) holders of Guarantor Senior Indebtedness of such Guarantor
shall be entitled to receive payment in full in cash or Cash Equivalents of
all Guarantor Senior Indebtedness of such Guarantor (including interest
accruing after, or which would accrue but for, the commencement of any
proceeding at the rate specified in the applicable Guarantor Senior
Indebtedness, whether or not a claim for such interest would be allowed)
before Securityholders shall be entitled to receive any payment of
principal of or interest on or other amounts with respect to the Notes
Guarantees from any Guarantor; and
(2) until the Guarantor Senior Indebtedness of such Guarantor
is paid in full in cash or Cash Equivalents, any payment or distribution to
which Securityholders would be entitled but for this ARTICLE XII shall be
made to holders of Guarantor Senior Indebtedness of such Guarantor, as
their respective interests may appear, except that the holders of the
Securities may receive Capital Stock (other than Disqualified Stock) issued
by the Company to pay interest on the Securities or issued in exchange for
the Securities, (ii) securities substantially identical to the Securities
issued by the Company in payment of interest thereon or (iii) securities
issued by the Company which are subordinated to Guarantor Senior
Indebtedness at least to the same extent as the Securities and having an
Average Life at least equal to the remaining Average Life of the
Securities.
SECTION 12.3. DEFAULT ON GUARANTOR SENIOR INDEBTEDNESS. A Guarantor
shall not pay the principal of, premium (if any) or interest on or other payment
obligations in respect of the Notes Guarantees or make any deposit pursuant to
SECTION 8.2 or repurchase, redeem or otherwise retire the Notes Guarantee
(collectively, "pay the Securities") if (i) any Senior Indebtedness or Guarantor
Senior Indebtedness of the applicable Guarantor is not paid when due in cash or
Cash Equivalents or (ii) any other default on Senior Indebtedness or Guarantor
Senior Indebtedness of the applicable Guarantor occurs and the maturity of such
Senior Indebtedness or Guarantor Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, (x) the default has been cured
or waived and any such acceleration has been rescinded or (y) such Senior
Indebtedness or Guarantor Senior Indebtedness of the applicable Guarantor has
been paid in full in cash or Cash Equivalents; PROVIDED, HOWEVER, that each
Guarantor may pay the Securities, without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
Representative of the Senior Indebtedness or Guarantor Senior Indebtedness of
the applicable Guarantor with respect to which either of the events set forth in
clause (i) or (ii) of this sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) of this
sentence or a default resulting in acceleration set forth in clause (ii) of the
preceding sentence) with respect to any Designated Senior Indebtedness or
Designated Guarantor Senior Indebtedness of the applicable Guarantor pursuant to
which the maturity thereof may be accelerated immediately without further notice
115
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, each Guarantor may not pay the
Securities during the Payment Blockage Period (as defined in SECTION 10.3)
commencing upon the receipt by the Trustee (with a copy to the Company and the
Guarantor) of the Blockage Notice (as defined in SECTION 10.3) of such default
from the Representative(s) of the holders of Designated Senior Indebtedness or
Designated Guarantor Senior Indebtedness of the applicable Guarantor specifying
an election to effect a Payment Blockage Period and ending 179 days thereafter
(or earlier if such Payment Blockage Period is terminated (i) by written notice
to the Trustee, the Guarantor and the Company from the Person or Persons who
gave such Blockage Notice, (ii) because the default giving rise to such Blockage
Notice is no longer continuing or (iii) because such Designated Senior
Indebtedness or Designated Guarantor Senior Indebtedness has been repaid in full
in cash or Cash Equivalents). Notwithstanding the provisions of the immediately
preceding sentence, unless the holders of such Designated Senior Indebtedness or
Designated Guarantor Senior Indebtedness of the applicable Guarantor or the
Representative(s) of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness or such Designated Guarantor Senior Indebtedness,
such Guarantor may resume payments on the Securities after the end of such
Payment Blockage Period (including any missed payments). Not more than one
Blockage Notice may be given, and not more than one Payment Blockage may occur,
in any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness or Designated Guarantor Senior
Indebtedness of the applicable Guarantor during such period. However, if any
Blockage Notice within such 360-day period is given by or on behalf of any
holders of Designated Senior Indebtedness other than the Bank Indebtedness, the
Representative of the Bank Indebtedness may give another Blockage Notice within
such period. In no event, however, may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate
during any 360 consecutive day period. For purposes of this paragraph, no
default or event of default that existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 12.4. ACCELERATION OF PAYMENT OF SECURITIES. If payment of
the Securities is accelerated because of an Event of Default, each Guarantor and
the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness or Designated Guarantor Senior Indebtedness (or their
Representatives) of the acceleration; PROVIDED, HOWEVER, that the Company and
the Trustee shall be obligated to notify such a Representative only if such
Representative has delivered or caused to be delivered to the Company and the
Trustee an address for service of such a notice (and the Company and the Trustee
shall only be obligated to deliver the notice to the address so specified). If
any Designated Senior Indebtedness or Designated Guarantor Senior Indebtedness
is outstanding, each Guarantor shall not pay the Securities until five Business
Days after the holders or Representative(s) of such Designated Senior
Indebtedness or Designated Guarantor Senior Indebtedness of the applicable
Guarantor receives notice of such acceleration and, thereafter, may pay the
Securities, only if this ARTICLE XII otherwise permits payments at that time.
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SECTION 12.5. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to Securityholders that because of this ARTICLE XII should not have been
made to them, the Securityholders who receive the distribution shall hold it in
trust for holders of Guarantor Senior Indebtedness of the applicable Guarantor
and promptly pay it over to them as their respective interests may appear.
SECTION 12.6. SUBROGATION. After all Guarantor Senior Indebtedness
is paid in full and until the Securities are paid in full, Securityholders shall
be subrogated to the rights of holders of Guarantor Senior Indebtedness to
receive distributions applicable to Guarantor Senior Indebtedness. A
distribution made under this ARTICLE XII to holders of Guarantor Senior
Indebtedness which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company of Guarantor
Senior Indebtedness.
SECTION 12.7. RELATIVE RIGHTS. This ARTICLE XII defines the relative
rights of Securityholders and holders of Guarantor Senior Indebtedness. Nothing
in this Indenture shall:
(1) impair, as between Guarantor and Securityholders, the
obligation of each Guarantor which is absolute and unconditional, to
guarantee the payment of principal of and interest on the Securities in
accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject to the
rights of holders of Guarantor Senior Indebtedness to receive distributions
otherwise payable to Securityholders.
SECTION 12.8. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right
of any holder of Guarantor Senior Indebtedness to enforce the subordination of
the Indebtedness evidenced by the Notes Guarantees shall be impaired by any act
or failure to act by any Guarantor or by the failure of any of them to comply
with this Indenture.
SECTION 12.9. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
SECTION 12.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice in writing satisfactory to it that payments may not be made
under this ARTICLE XII. Each Guarantor, the Registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; PROVIDED,
HOWEVER, that, if an issue of Guarantor Senior Indebtedness has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee. The Registrar and the Paying Agent may do the same with like rights.
The Trustee shall be entitled to all the rights set forth in this ARTICLE XII
with respect to any Guarantor Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Guarantor Senior Indebtedness;
and nothing in ARTICLE VII shall deprive the Trustee of any of its rights as
such holder. Nothing in this ARTICLE XII shall apply to claims of, or payments
to, the Trustee under or pursuant to SECTION 7.7.
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SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Guarantor Senior
Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE. The failure to make a payment in respect of the Securities
and the Notes Guarantees, by reason of any provision in this ARTICLE XII shall
not be construed as preventing the occurrence of a Default or Event of Default.
Nothing in this ARTICLE XII shall have any effect on the right of the
Securityholders or the Trustee to accelerate the maturity of the Securities.
SECTION 12.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under ARTICLE VIII by the Trustee
for the payment of principal of and interest on the Securities or the Notes
Guarantees shall not be subordinated to the prior payment of any Guarantor
Senior Indebtedness or subject to the restrictions set forth in this ARTICLE
XII, and none of the Securityholders shall be obligated to pay over any such
amount to the Company, any holder of Guarantor Senior Indebtedness, or any other
creditor of such Guarantor.
SECTION 12.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this ARTICLE XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in SECTION 12.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Guarantor
Senior Indebtedness for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Guarantor Senior
Indebtedness and other Indebtedness of each Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this ARTICLE XII. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Guarantor Senior Indebtedness to participate in any
payment or distribution pursuant to this ARTICLE XII, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Guarantor Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this ARTICLE XII,
and, if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of SECTIONS 7.1 and 7.2 shall be applicable
to all actions or omissions of actions by the Trustee pursuant to this ARTICLE
XII.
SECTION 12.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Guarantor Senior Indebtedness as provided in this ARTICLE XII and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF GUARANTOR SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly
118
pay over or distribute to Securityholders or any Guarantor or any other Person,
money or assets to which any holders of Guarantor Senior Indebtedness shall be
entitled by virtue of this ARTICLE XII or otherwise.
SECTION 12.16. RELIANCE BY HOLDERS OF GUARANTOR SENIOR INDEBTEDNESS
ON INDEBTEDNESS ON SUBORDINATION PROVISIONS. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Guarantor Senior Indebtedness, whether such Guarantor Senior Indebtedness
was created or acquired before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such Guarantor Senior
Indebtedness and such holder of Guarantor Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Guarantor Senior
Indebtedness.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Guarantor in addition to performing its obligations
under its Notes Guarantee shall perform such other obligations as may be imposed
upon it with respect to this Indenture under the TIA.
SECTION 13.2. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
MedQuest, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Chief Financial Officer
with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
119
if to the Trustee:
Wachovia Bank, National Association
0000 Xxxxx Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a registered Securityholder
shall be mailed to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
120
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
SECTION 13.6. WHEN SECURITIES DISREGARDED. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 13.7. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.8. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 13.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 13.10. NO RECOURSE AGAINST OTHERS. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Securities, this Indenture or the Notes
Guarantees or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 13.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. MULTIPLE ORIGINALS. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
121
SECTION 13.13. QUALIFICATION OF INDENTURE. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.14. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
122
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
MEDQUEST, INC.
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
President
MQ ASSOCIATES, INC.
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx
Chairman and CEO
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Trustee
By: /s/ XXXX X. XXXXX
-------------------------------------
Xxxx X. Xxxxx
Assistant Vice President
123
IMAGING SERVICES OF ALABAMA, INC. KENOSHA DIAGNOSTIC IMAGING, INC.
XXXXXXXX DIAGNOSTIC IMAGING, INC. LEXINGTON OPEN MRI, INC.
ASHEVILLE OPEN MRI, INC. MECKLENBURG OPEN MRI, INC.
BIOIMAGING AT CHARLOTTE, INC. MEDQUEST ASSOCIATES, INC.
BIOIMAGING AT XXXXXXX, INC. MISSOURI IMAGING, INC.
BIOIMAGING OF COOL SPRINGS, INC. MOBILE OPEN MRI, INC.
CABARRUS DIAGNOSTIC IMAGING, INC. OCCUPATIONAL SOLUTIONS, INC.
CAPE FEAR DIAGNOSTIC IMAGING, INC. PALMETTO IMAGING, INC.
CAROLINA IMAGING, INC. OF FAYETTEVILLE PHOENIX DIAGNOSTIC IMAGING, INC.
CHAPEL HILL DIAGNOSTIC IMAGING, INC. PIEDMONT IMAGING, INC. (FORSYTH)
CHATTANOOGA DIAGNOSTIC IMAGING, INC. PIEDMONT IMAGING, INC. (SPARTANBURG)
DOTHAN DIAGNOSTIC IMAGING, INC. OPEN MRI & IMAGING OF RICHMOND, INC.
FLORIDA DIAGNOSTIC IMAGING CENTER, INC. SOUTH CAROLINA DIAGNOSTIC IMAGING, INC.
OPEN MRI OF
GEORGIA, INC. SUN VIEW HOLDINGS, INC.
OPEN MRI & IMAGING OF
GEORGIA, INC. TEXAS IMAGING SERVICES OF EL PASO, INC.
GROVE DIAGNOSTIC IMAGING CENTER, INC. TRIAD IMAGING, INC.
KANSAS DIAGNOSTIC IMAGING, INC. TYSON'S CORNER DIAGNOSTIC IMAGING, INC.
NORTHEAST COLUMBIA DIAGNOSTIC IMAGING, INC. VIRGINIA DIAGNOSTIC IMAGING, INC.
OPEN MRI OF THE CAROLINAS, INC.
On behalf of each of the entities On behalf of each of the entities
listed above: listed above:
By: /s/ J. XXXXXXX XXXX By: /s/ J. XXXXXXX XXXX
----------------------------------- ----------------------------
J. Xxxxxxx Xxxx J. Xxxxxxx Xxxx
President President
124
XXXXXXXXXX OPEN MRI, LLC
XXXXXXX DIAGNOSTIC IMAGING, LLC
On behalf of each of the entities
listed above:
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
Manager
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx
Manager
COASTAL IMAGING, LLC
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
Manager
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx
Manager
125
DURHAM DIAGNOSTIC IMAGING, LLC
JACKSONVILLE DIAGNOSTIC IMAGING, LLC
On behalf of each of the entities
listed above:
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
Manager
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx
Manager
CAPE IMAGING, L.L.C.
BRIDGETON MRI AND IMAGING CENTER, LLC
KIRKWOOD MRI AND IMAGING CENTER, LLC
ST. XXXXXX MRI & IMAGING CENTER, LLC
On behalf of each of the entities
listed above:
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
Manager
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx
Manager
Missouri Imaging, Inc., as sole
member of each of the entities listed
above
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
President
126
OPEN MRI & IMAGING OF RICHMOND, LLC
RICHMOND WEST END DIAGNOSTIC IMAGING,
LLC
On behalf of each of the entities
listed above:
By: /s/ J. XXXXXXX XXXX
--------------------------------
J. Xxxxxxx Xxxx
Manager
By: /s/ XXXX XXXXXXX
--------------------------------
Xxxx Xxxxxxx
Manager
Virginia Diagnostic Imaging, Inc., as
sole member of each of the entities
listed above
By: /s/ J. XXXXXXX XXXX
--------------------------------
J. Xxxxxxx Xxxx
President
127
OPEN MRI & IMAGING OF ALBANY, LLC OPEN MRI & IMAGING OF NORTH XXXXXX, LLC
OPEN MRI & IMAGING OF ATHENS, LLC OPEN MRI & IMAGING OF N.E.
GEORGIA, LLC
ATHENS MRI, LLC OPEN MRI AND IMAGING OF SNELLVILLE, LLC
OPEN MRI OF ATLANTA, LLC WEST PACES DIAGNOSTIC IMAGING, LLC
BUCKHEAD DIAGNOSTIC IMAGING, LLC WOODSTOCK DIAGNOSTIC IMAGING, LLC
OPEN MRI OF CENTRAL
GEORGIA, LLC DIAGNOSTIC IMAGING OF XXXXX, LLC
IMAGING CENTER OF CENTRAL
GEORGIA, LLC DIAGNOSTIC IMAGING OF MARIETTA, LLC
OPEN MRI & IMAGING OF CONYERS, LLC DIAGNOSTIC IMAGING OF
GEORGIA, LLC
CUMMING DIAGNOSTIC IMAGING, LLC OPEN MRI & IMAGING OF DOUGLASVILLE, LLC
OPEN MRI & IMAGING OF DEKALB, LLC HAPEVILLE DIAGNOSTIC IMAGING, LLC
DULUTH DIAGNOSTIC IMAGING, LLC OPEN MRI & IMAGING OF MACON, LLC
DULUTH CT CENTER, LLC MIDTOWN DIAGNOSTIC IMAGING, LLC
DIAGNOSTIC IMAGING OF ATLANTA, LLC
On behalf of each of the entities On behalf of each of the entities
listed above: listed above:
By: /s/ J. XXXXXXX XXXX By: /s/ J. XXXXXXX XXXX
---------------------------- ----------------------------
J. Xxxxxxx Xxxx J. Xxxxxxx Xxxx
Manager Manager
By: /s/ XXXX XXXXXXX By: /s/ XXXX XXXXXXX
---------------------------- ----------------------------
Xxxx Xxxxxxx Xxxx Xxxxxxx
Manager Manager
128
CAROLINA MEDICAL IMAGING, LLC
OPEN MRI OF SIMPSONVILLE, LLC
SIMPSONVILLE OPEN MRI, LLC
On behalf of each of the entities
listed above:
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
Manager
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx
Manager
Palmetto Imaging, Inc., as sole
member of each of the entities listed
above
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
President
OPEN MRI & IMAGING OF XXXXXXXX, LLC
OPEN MRI OF MYRTLE BEACH, LLC
Palmetto Imaging, Inc., as sole
member of each of the entities listed
above
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
President
129
EAST XXXXXX DIAGNOSTIC IMAGING, LLC
FARMFIELD DIAGNOSTIC IMAGING, LLC
FORT MILL DIAGNOSTIC IMAGING, LLC
TRICOM DIAGNOSTIC IMAGING, LLC
XXXX XXXXXX DIAGNOSTIC IMAGING, LLC
On behalf of each of the entities
listed above:
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
Manager
By: /s/ XXXX XXXXXXX
-------------------------------------
Xxxx Xxxxxxx
Manager
South Carolina Diagnostic Imaging,
Inc., as sole member of each of the
entities listed above
By: /s/ J. XXXXXXX XXXX
-------------------------------------
J. Xxxxxxx Xxxx
President
EXHIBIT A
[FORM OF FACE OF SERIES A NOTE]
[Applicable Restricted Securities Legend]
[Depository Legend, if applicable]
No. [___] Principal Amount $[_________]
CUSIP NO. _________
MEDQUEST, INC.
11 7/8% Senior Subordinated Note, Series A, due 2012
MedQuest, Inc., a Delaware corporation, promises to pay to
[__________], or registered assigns, the principal sum of [_______________]
Dollars, on August 15, 2012.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Additional provisions of this Security are set forth on the
other side of this Security.
MEDQUEST, INC.
By:
----------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
-------------------------------
Authorized Signatory Date: ________ __, 20__
A-1
[FORM OF REVERSE SIDE OF SERIES A NOTE]
11 7/8% Senior Subordinated Note, Series A, due 2012
1. INTEREST
MedQuest, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above.
The Company will pay interest semiannually on February 15 and August
15 of each year commencing February 15, 2003. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from August 15, 2002. The Company
shall pay interest on overdue principal or premium, if any (plus interest on
such interest to the extent lawful), at the rate borne by the Securities to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT
By no later than 10:00 a.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The Company
will pay interest (except Defaulted Interest) to the Persons who are registered
Holders of Securities at the close of business on the February 1 or August 1
next preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; PROVIDED,
HOWEVER, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, Wachovia Bank, National Association (the "Trustee"), will
act as Trustee, Paying Agent and Registrar. The Company may appoint and change
any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its Restricted Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
A-2
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
August 15, 2002 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, MQ
Associates, Inc. ("Holdings"), the Subsidiary Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company. The aggregate principal amount of securities that may be
authenticated and delivered under the Indenture is unlimited. This Security is
one of the 11 7/8% Senior Subordinated Notes, Series A, due 2012 referred to in
the Indenture. The Securities include (i) $180,000,000 aggregate principal
amount of the Company's 11 7/8% Senior Subordinated Notes, Series A, due 2012
issued under the Indenture on August 15, 2002 (herein called "Initial
Securities"), (ii) if and when issued, additional 11 7/8% Senior Subordinated
Notes, Series A, due 2012 or 11 7/8% Senior Subordinated Notes, Series B, due
2012 of the Company that may be issued from time to time under the Indenture
subsequent to August 15, 2002 (herein called "Additional Securities") and (iii)
if and when issued, the Company's 11 7/8% Senior Subordinated Notes, Series B,
due 2012 that may be issued from time to time under the Indenture in exchange
for Initial Securities or Additional Securities in an offer registered under the
Securities Act as provided in the Registration Rights Agreement (herein called
"Exchange Securities"). The Initial Securities, Additional Securities and
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on, among other things, the
Incurrence of Indebtedness by the Company and its Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and its
Subsidiaries, the purchase or redemption of Capital Stock of the Company,
certain purchases or redemptions of Subordinated Indebtedness, the sale or
transfer of assets and Capital Stock of Restricted Subsidiaries, the issuance or
sale of Capital Stock of Restricted Subsidiaries, the incurrence of certain
liens, certain payment guarantees, the business activities and investments of
the Company and its Restricted Subsidiaries, mergers and consolidation, and
transactions with Affiliates. In addition, the Indenture limits the ability of
the Company and its Restricted Subsidiaries to enter into agreements that
restrict distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Guarantors have unconditionally
guaranteed (and future Subsidiary Guarantors, together with the Guarantors, will
unconditionally guarantee), jointly and severally, such obligations on a senior
subordinated basis pursuant to the terms of the Indenture.
A-3
5. REDEMPTION
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to August 15, 2007. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
If redeemed during the 12-month period commencing on August 15 of
the years set forth below:
REDEMPTION
PERIOD PRICE
------ ----------
2007 105.938%
2008 103.958%
2009 101.979%
2010 and thereafter 100.000%
In addition, at any time and from time to time prior to August 15,
2005, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Securities with the Net Cash Proceeds of one or more
Equity Offerings received by the Company at a redemption price (expressed as a
percentage of principal amount) of 111.875% plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); PROVIDED, HOWEVER, that at least 65% of the original principal amount of
the Securities must remain outstanding after each such redemption; PROVIDED
FURTHER, that each such redemption occurs within 120 days of the date of closing
of such Equity Offering.
If the optional redemption date is on or after an interest record
date and on or before the related interest payment date, the accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders whose Securities will be subject to
redemption by the Company.
In the case of any partial redemption, selection of the Securities
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Securities
are listed or, if the Securities are not listed, then on a pro rata basis, by
lot or by such other method as the Trustee in its sole discretion shall deem to
be fair and appropriate, although no Securities of $1,000 in original principal
amount or less will be redeemed in part. Any such notice to the Trustee may be
cancelled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect. If any Security is to be
redeemed in part only, the notice of redemption relating to such
A-4
Security shall state the portion of the principal amount thereof to be redeemed.
A new Security in principal amount equal to the unredeemed portion thereof will
be issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the redemption date, interest will cease to accrue on
Securities or portions thereof called for redemption as long as the Company has
deposited with the Paying Agent funds in satisfaction of the applicable
redemption price pursuant to the Indenture.
In addition, at any time prior to August 15, 2007, within 90 days
following the occurrence of a Change of Control, the Company may redeem the
Securities, in whole but not in part, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium plus accrued and unpaid
interest, if any, to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date). Notice of redemption of the Securities pursuant to this
paragraph shall be mailed to holders of the Securities not more than 60 days
following the occurrence of a Change of Control, which notice shall state the
redemption date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed).
6. REPURCHASE PROVISIONS
(a) Upon a Change of Control any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to SECTION 3.7(b) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes in accordance with the procedures set forth in SECTION 3.7
of the Indenture.
7. SUBORDINATION
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose.
8. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
for a period beginning 15 days
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before the mailing of a notice of Securities to be redeemed and ending on the
date of such mailing or (ii) any Securities for a period beginning 15 days
before an interest payment date and ending on such interest payment date.
9. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner
of it for all purposes.
10. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. DEFEASANCE
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect of a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, the
Guarantors and the Trustee may amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with ARTICLE IV of
the Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, to release a Guarantor in accordance with the Indenture or to secure
the Securities, or to add additional covenants of the Company and the
Guarantors, or surrender rights and powers conferred on the Company, or to
comply with any request of the SEC in connection with qualifying the Indenture
under the Act, or to make any change that does not adversely affect the rights
of any Securityholder, or to provide for the issuance of Exchange Securities.
13. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest or additional interest when due on the Securities,
whether or not such payment is prohibited by ARTICLE X or XII of the Indenture;
(ii) default in payment of principal or premium, if any, on the Securities at
Stated Maturity, upon required repurchase or upon optional
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redemption pursuant to paragraphs 5 and 6 of the Securities, upon declaration or
otherwise, whether or not such payment is prohibited by ARTICLE X or XII of the
Indenture; (iii) the failure by the Company or any Guarantor to comply with its
obligations under ARTICLE IV or SECTION 11.2 of the Indenture; (iv) failure by
the Company to comply for 30 days after notice with any of its obligations under
the covenants described under SECTIONS 3.2 through 3.17 inclusive of the
Indenture (in each case, other than a failure to purchase Securities when
required pursuant to SECTION 3.7 or 3.9, which failure shall constitute an Event
of Default under clause (ii) above and other than a failure to comply with
ARTICLE IV or SECTION 11.2 which is covered by clause (iii) above); (v) the
failure by the Company to comply for 60 days after written notice (specifying
the default and demanding that the same be remedied) with its other agreements
contained in the Indenture or under the Securities (other than those referred to
in (i), (ii), (iii) or (iv) above); (vi) default under any mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries), other than Indebtedness owed to the Company
or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists,
or is created after the date of the Indenture, which default (a) is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness after final maturity (after giving effect to any applicable grace
period provided in such Indebtedness) ("PAYMENT DEFAULT") or (b) results in the
acceleration of such Indebtedness prior to its maturity (the "CROSS ACCELERATION
PROVISION") and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a payment default or the maturity of which has been so
accelerated, aggregates $10.0 million or more or its foreign currency equivalent
at the time; (vii) certain events of bankruptcy, insolvency or reorganization of
the Company or a Significant Subsidiary (other than any Receivables Entity) or
group of Restricted Subsidiaries (other than any Receivables Entity) that, taken
together (as of the latest audited consolidated financial statements for
Holdings, the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary (the "BANKRUPTCY PROVISIONS"); (viii) failure by the
Company or any Significant Subsidiary or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
Holdings, the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary to pay final judgments aggregating in excess of $10.0
million or its foreign currency equivalent at the time (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability or coverage for in writing), which judgments are not paid, discharged
or stayed for a period of 60 days (the "JUDGMENT DEFAULT PROVISION") or (ix) any
Notes Guarantee of Holdings, a Significant Subsidiary, or a group of Subsidiary
Guarantors that, taken together (as of the latest audited consolidated financial
statements for Holdings the Company and its Restricted Subsidiaries), would
collectively represent a Significant Subsidiary ceases to be in full force and
effect (except as contemplated by the terms of the Indenture) or is declared
null and void in a judicial proceeding or any Guarantor denies or disaffirms its
obligations under the Indenture or its Notes Guarantee. However, a default under
clauses (iv) and (v) will not constitute an Event of Default until the Trustee
or the Holders of 25% or more in principal amount of the outstanding Securities
notify the Company of the default and the Company does not cure such default
within the time specified in clauses (iv) and (v) hereof after receipt of such
notice.
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If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
14. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
15. NO RECOURSE AGAINST OTHERS
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of the Company or any Guarantor shall not
have any liability for any obligations of the Company under the Securities, the
Indenture or any Notes Guarantees or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
16. AUTHENTICATION
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entirety), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors
Act).
18. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the
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Securities and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Securityholders. No representation is made as to
the accuracy of such numbers either as printed on the Securities or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
19. GOVERNING LAW
This Security shall be governed by, and construed in accordance
with, the laws of the State of New York.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture, which has in
it the text of this Security in larger type. Requests may be made to:
MedQuest, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Chief Financial Officer
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________________
(Print or type assignee's name, address and zip code)
__________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:_______________________ Your Signature:___________________
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities
evidenced by this certificate occurring prior to the date that is two years
after the later of the date of original issuance of such Securities and the last
date, if any, on which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such Securities are
being:
CHECK ONE BOX BELOW:
1 / / acquired for the undersigned's own account, without transfer; or
2 / / transferred to the Company; or
3 / / transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"); or
4 / / transferred pursuant to an effective registration statement under
the Securities Act; or
5 / / transferred pursuant to and in compliance with Regulation S under
the Securities Act; or
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6 / / transferred to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act), that
has furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter appears as
SECTION 2.8 of the Indenture); or
7 / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; PROVIDED, HOWEVER, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
----------------------------
Signature
Signature Guarantee:
------------------------------ ----------------------------
(Signature must be guaranteed) Signature
--------------------------------------------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) OR (3) 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:
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Principal Amount of this Global Signature of authorized
Date of Amount of decrease in Principal Amount of increase in Principal Security following such signatory of Trustee or
Exchange Amount of this Global Security Amount of this Global Security decrease or increase Securities Custodian
-------- ------------------------------- ------------------------------- ------------------------------- -----------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to SECTION 3.7 or 3.9 of the Indenture, check either box:
/ / / /
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to SECTION 3.7 or 3.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ________________________________________________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
A-13
EXHIBIT B
[FORM OF FACE OF SERIES B NOTE]
[Depository Legend, if applicable]
No. [___] Principal Amount $[_________]
CUSIP NO. _________
MEDQUEST, INC.
11 7/8% Senior Subordinated Note, Series B, due 2012
MedQuest, Inc., a Delaware Corporation, promises to pay to
[__________], or registered assigns, the principal sum of [_______________]
Dollars, on August 15, 2012.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Additional provisions of this Security are set forth on the other
side of this Security.
MEDQUEST, INC.
By:
----------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WACHOVIA BANK NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
----------------------------------
Authorized Signatory Date: ________ __, 20__
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[FORM OF REVERSE SIDE OF SERIES B NOTE]
11 7/8% Senior Subordinated Note, Series B, due 2012
1. INTEREST
MedQuest, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above.
The Company will pay interest semiannually on February 15 and August
15 of each year commencing February 15, 2003. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from August 15, 2002. The Company
shall pay interest on overdue principal or premium, if any (plus interest on
such interest to the extent lawful), at the rate borne by the Securities to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT
By no later than 10:00 a.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The Company
will pay interest (except Defaulted Interest) to the Persons who are registered
Holders of Securities at the close of business on the February 1 or August 1
next preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; PROVIDED,
HOWEVER, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, Wachovia Bank, National Association (the "Trustee"), will
act as Trustee, Paying Agent and Registrar. The Company may appoint and change
any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its Restricted Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
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4. INDENTURE
The Company issued the Securities under an Indenture dated as of
August 15, 2002 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, MQ
Associates, Inc. ("Holdings"), the Subsidiary Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company. The aggregate principal amount of securities that may be
authenticated and delivered under the Indenture is unlimited. This Security is
one of the 11 7/8% Senior Subordinated Notes, Series B, due 2012 referred to in
the Indenture. The Securities include (i) $180,000,000 aggregate principal
amount of the Company's 11 7/8% Senior Subordinated Notes, Series A, due 2012
issued under the Indenture on August 15, 2002 (herein called "Initial
Securities"), (ii) if and when issued, additional 11 7/8% Senior Subordinated
Notes, Series A, due 2012 or 11 7/8% Senior Subordinated Notes, Series B, due
2012 of the Company that may be issued from time to time under the Indenture
subsequent to August 15, 2002 (herein called "Additional Securities") and (iii)
if and when issued, the Company's 11 7/8% Senior Subordinated Notes, Series B,
due 2012 that may be issued from time to time under the Indenture in exchange
for Initial Securities or Additional Securities in an offer registered under the
Securities Act as provided in the Registration Rights Agreement (herein called
"Exchange Securities"). The Initial Securities, Additional Securities and
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on, among other things, the
Incurrence of Indebtedness by the Company and its Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and its
Subsidiaries, the purchase or redemption of Capital Stock of the Company,
certain purchases or redemptions of Subordinated Indebtedness, the sale or
transfer of assets and Capital Stock of Restricted Subsidiaries, the issuance or
sale of Capital Stock of Restricted Subsidiaries, the incurrence of certain
liens, certain payment guarantees, the business activities and investments of
the Company and its Restricted Subsidiaries, mergers and consolidations, and
transactions with Affiliates. In addition, the Indenture limits the ability of
the Company and its Restricted Subsidiaries to enter into agreements that
restrict distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Guarantors have unconditionally
guaranteed (and future Subsidiary Guarantors, together with the Guarantors, will
unconditionally guarantee), jointly and severally, such obligations on a senior
subordinated basis pursuant to the terms of the Indenture.
B-3
5. REDEMPTION
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to August 15, 2007. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
If redeemed during the 12-month period commencing on August 15 of
the years set forth below:
REDEMPTION
PERIOD PRICE
------ ----------
2007 105.938%
2008 103.958%
2009 101.979%
2010 and thereafter 100.000%
In addition, at any time and from time to time prior to August 15,
2005, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Securities with the Net Cash Proceeds of one or more
Equity Offerings received by the Company at a redemption price (expressed as a
percentage of principal amount) of 111.875% plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); PROVIDED, HOWEVER, that at least 65% of the original principal amount of
the Securities must remain outstanding after each such redemption; PROVIDED
FURTHER, that each such redemption occurs within 120 days of the date of closing
of such Equity Offering.
If the optional redemption date is on or after an interest record
date and on or before the related interest payment date, the accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders whose Securities will be subject to
redemption by the Company.
In the case of any partial redemption, selection of the Securities
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which the Securities
are listed or, if the Securities are not listed, then on a pro rata basis, by
lot or by such other method as the Trustee in its sole discretion shall deem to
be fair and appropriate, although no Securities of $1,000 in original principal
amount or less will be redeemed in part. Any such notice to the Trustee may be
cancelled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect. If any Security is to be
redeemed in part only, the notice of redemption relating to such Security shall
state the portion of the principal amount thereof to be redeemed. A new Security
in principal amount equal to the unredeemed portion thereof will be issued in
the name of the
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Holder thereof upon cancellation of the original Security. On and after the
redemption date, interest will cease to accrue on Securities or portions thereof
called for redemption as long as the Company has deposited with the Paying Agent
funds in satisfaction of the applicable redemption price pursuant to the
Indenture.
In addition, at any time prior to August 15, 2007, within 90 days
following the occurrence of a Change of Control, the Company may redeem the
Securities, in whole but not in part, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium plus accrued and unpaid
interest, if any, to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date). Notice of redemption of the Securities pursuant to this
paragraph shall be mailed to holders of the Securities not more than 60 days
following the occurrence of a Change of Control, which notice shall state the
redemption date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed).
6. REPURCHASE PROVISIONS
(a) Upon a Change of Control any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to SECTION 3.7(b) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes in accordance with the procedures set forth in SECTION 3.7
of the Indenture.
7. SUBORDINATION
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose.
8. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
for a period beginning 15 days before the mailing of a notice of Securities to
be redeemed and ending on the date of such
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mailing or (ii) any Securities for a period beginning 15 days before an interest
payment date and ending on such interest payment date.
9. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner
of it for all purposes.
10. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. DEFEASANCE
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect of a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, the
Guarantors and the Trustee may amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with ARTICLE IV of
the Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities, to release a Guarantor in accordance with the Indenture or to secure
the Securities, or to add additional covenants of the Company and the
Guarantors, or surrender rights and powers conferred on the Company, or to
comply with any request of the SEC in connection with qualifying the Indenture
under the Act, or to make any change that does not adversely affect the rights
of any Securityholder, or to provide for the issuance of Exchange Securities.
13. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest or additional interest when due on the Securities,
whether or not such payment is prohibited by ARTICLE X or XII of the Indenture;
(ii) default in payment of principal or premium, if any, on the Securities at
Stated Maturity, upon required repurchase or upon optional redemption pursuant
to paragraphs 5 and 6 of the Securities, upon declaration or otherwise,
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whether or not such payment is prohibited by ARTICLE X or XII of the Indenture;
(iii) the failure by the Company or any Guarantor to comply with its obligations
under ARTICLE IV or SECTION 11.2 of the Indenture; (iv) failure by the Company
to comply for 30 days after notice with any of its obligations under the
covenants described under SECTIONS 3.2 through 3.17 inclusive of the Indenture
(in each case, other than a failure to purchase Securities when required
pursuant to SECTION 3.7 or 3.9, which failure shall constitute an Event of
Default under clause (ii) above and other than a failure to comply with ARTICLE
IV or SECTION 11.2 which is covered by clause (iii) above); (v) the failure by
the Company to comply for 60 days after written notice (specifying the default
and demanding that the same be remedied) with its other agreements contained in
the Indenture or under the Securities (other than those referred to in (i),
(ii), (iii) or (iv) above); (vi) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries), other than Indebtedness owed to the Company
or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists,
or is created after the date of the Indenture, which default (a) is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness after final maturity (after giving effect to any applicable grace
period provided in such Indebtedness) ("PAYMENT DEFAULT") or (b) results in the
acceleration of such Indebtedness prior to its maturity (the "CROSS ACCELERATION
PROVISION") and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a payment default or the maturity of which has been so
accelerated, aggregates $10.0 million or more or its foreign currency equivalent
at the time; (vii) certain events of bankruptcy, insolvency or reorganization of
the Company or a Significant Subsidiary (other than any Receivables Entity) or
group of Restricted Subsidiaries (other than any Receivables Entity) that, taken
together (as of the latest audited consolidated financial statements for
Holdings, the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary (the "BANKRUPTCY PROVISIONS"); (viii) failure by the
Company or any Significant Subsidiary or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
Holdings, the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary to pay final judgments aggregating in excess of $10.0
million or its foreign currency equivalent at the time (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability or coverage for in writing), which judgments are not paid, discharged
or stayed for a period of 60 days (the "JUDGMENT DEFAULT PROVISION") or (ix) any
Notes Guarantee of Holdings, a Significant Subsidiary, or a group of Subsidiary
Guarantors that, taken together (as of the latest audited consolidated financial
statements for Holdings the Company and its Restricted Subsidiaries), would
collectively represent a Significant Subsidiary ceases to be in full force and
effect (except as contemplated by the terms of the Indenture) or is declared
null and void in a judicial proceeding or any Guarantor denies or disaffirms its
obligations under the Indenture or its Notes Guarantee. However, a default under
clauses (iv) and (v) will not constitute an Event of Default until the Trustee
or the Holders of 25% or more in principal amount of the outstanding Securities
notify the Company of the default and the Company does not cure such default
within the time specified in clauses (iv) and (v) hereof after receipt of such
notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and
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payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
14. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
15. NO RECOURSE AGAINST OTHERS
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of the Company or any Guarantor shall not
have any liability for any obligations of the Company under the Securities, the
Indenture or any Notes Guarantees or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
16. AUTHENTICATION
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the
entirety), JT TEN (= joint tenants with rights of survivorship and not as
tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors
Act).
18. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers
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either as printed on the Securities or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.
19. GOVERNING LAW
This Security shall be governed by, and construed in accordance
with, the laws of the State of New York.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
MedQuest, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Chief Financial Officer
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
___________________________________________________________
(Print or type assignee's name, address and zip code)
___________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ____________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date: _______________ Your Signature ___________________________________________
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Principal Amount of this Global Signature of authorized
Date of Amount of decrease in Principal Amount of increase in Principal Security following such signatory of Trustee or
Exchange Amount of this Global Security Amount of this Global Security decrease or increase Securities Custodian
-------- ------------------------------- ------------------------------- ------------------------------- -----------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to SECTION 3.7 or 3.9 of the Indenture, check either box:
/ / / /
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to SECTION 3.7 or 3.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: _______________ Your Signature: ______________________________________
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
This Supplemental Indenture, dated as of [_______ __], 20__ (this
"SUPPLEMENTAL INDENTURE" or "GUARANTEE"), among [NAME OF FUTURE SUBSIDIARY
GUARANTOR] (the "GUARANTOR"), MedQuest, Inc. (together with its successors and
assigns, the "COMPANY"), MQ Associates, Inc. ("HOLDINGS"), each other then
existing Subsidiary Guarantor under the Indenture referred to below, and
Wachovia Bank, National Association, as Trustee under the Indenture referred to
below.
W I T N E S S E T H:
WHEREAS, the Company, Holdings, the Subsidiary Guarantors and the
Trustee have heretofore executed and delivered an Indenture, dated as of August
15, 2002 (as amended, supplemented, waived or otherwise modified, the
"INDENTURE"), providing for the issuance of an aggregate principal amount of
$180,000,000 of 11 7/8% Senior Subordinated Notes due 2012 of the Company (the
"SECURITIES");
WHEREAS, SECTION 3.12 of the Indenture provides that unless such
Subsidiary has previously issued a Notes Guarantee which is then in full force
and effect, the Company is required to cause each Subsidiary that issues a
Guarantee in respect of obligations under a Credit Facility to execute and
deliver to the Trustee a supplemental indenture pursuant to which such
Restricted Subsidiary will unconditionally Guarantee, on a joint and several
basis with the other Guarantors, the full and prompt payment of the principal
of, premium, if any, and interest on the Securities; and
WHEREAS, pursuant to SECTION 9.1 of the Indenture, the Trustee and
the Company are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor, the Company, Holdings, the other Subsidiary Guarantors and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS. As used in this Supplemental Indenture,
terms defined in the Indenture or in the preamble or recital hereto are used
herein as therein defined, except that the term "HOLDERS" in this Guarantee
shall refer to the term "Securityholders" as defined in the Indenture and the
Trustee acting on behalf or for the benefit of such Holders. The words "herein,"
"hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
ARTICLE II
AGREEMENT TO BE BOUND; GUARANTEE
SECTION 2.1 AGREEMENT TO BE BOUND. The Guarantor hereby becomes a
party to the Indenture as a Subsidiary Guarantor and as such will have all of
the rights and be subject to all of the obligations and agreements of a
Subsidiary Guarantor under the Indenture. The Guarantor agrees to be bound by
all of the provisions of the Indenture applicable to a Subsidiary Guarantor and
to perform all of the obligations and agreements of a Subsidiary Guarantor under
the Indenture.
SECTION 2.2 GUARANTEE. The Guarantor hereby fully, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, jointly
and severally with each other Subsidiary Guarantor, to each Holder of the
Securities and the Trustee, the full and punctual payment when due, whether at
maturity, by acceleration, by redemption or otherwise, of the Obligations
pursuant to ARTICLE XI of the Indenture.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 NOTICES. All notices and other communications to the
Guarantor shall be given as provided in the Indenture to the Guarantor, at its
address set forth below, with a copy to the Company as provided in the Indenture
for notices to the Company.
SECTION 3.2 PARTIES. Nothing expressed or mentioned herein is
intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee, any legal or equitable right, remedy or claim
under or in respect of this Supplemental Indenture or the Indenture or any
provision herein or therein contained.
SECTION 3.3 GOVERNING LAW. This Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 3.4 SEVERABILITY CLAUSE. In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.
SECTION 3.5 RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART
OF INDENTURE. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture shall
form a part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
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The Trustee makes no representation or warranty as to the validity or
sufficiency of this Supplemental Indenture.
SECTION 3.6 COUNTERPARTS. The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.
SECTION 3.7 HEADINGS. The headings of the Articles and the sections
in this Guarantee are for convenience of reference only and shall not be deemed
to alter or affect the meaning or interpretation of any provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[SUBSIDIARY GUARANTOR],
as a Guarantor
By:
----------------------------------
Name:
Title:
WACHOVIA BANK NATIONAL ASSOCIATION,
as Trustee
By:
----------------------------------
Name:
Title:
MEDQUEST, INC.
By:
----------------------------------
Name:
Title:
MQ ASSOCIATES, INC.
By
-----------------------------------
Title:
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[INSERT OTHER SUBSIDIARY GUARANTORS]
By
-----------------------------------
Title:
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SCHEDULE 3.6
RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES
Encumbrances pursuant to the Indenture, the Securities, the Notes Guarantees and
the Senior Credit Agreement
