EXHIBIT 4.4
EXECUTION COPY
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ROTO-ROOTER, INC.
8-3/4% Senior Notes Due 2011
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INDENTURE
Dated as of February 24, 2004
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LaSalle Bank National Association,
as Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) ............................ 7.10
(a)(2) ............................ 7.10
(a)(3) ............................ N.A.
(a)(4) ............................ N.A.
(b) ............................ 7.08; 7.10
(c) ............................ N.A.
311(a) ............................ 7.11
(b) ............................ 7.11
(c) ............................ N.A.
312(a) ............................ 2.05
(b) ............................ 10.03
(c) ............................ 10.03
313(a) ............................ 7.06
(b)(1) ............................ 7.06
(b)(2) ............................ 7.06
(c) ............................ 10.02
(d) ............................ 7.06
314(a) ............................ 4.02; 4.10; 10.02
(b) ............................ N.A.
(c)(1) ............................ 10.04
(c)(2) ............................ 10.04
(c)(3) ............................ N.A.
(d) ............................ N.A.
(e) ............................ 10.05
(f) ............................ 4.10
315(a) ............................ 7.01
(b) ............................ 7.05; 10.02
(c) ............................ 7.01
(d) ............................ 7.01
(e) ............................ 6.11
316(a)(last sentence) .................. 10.06
(a)(1)(A) ............................ 6.05
(a)(1)(B) ............................ 6.04
(a)(2) ............................ N.A.
(b) ............................ 6.07
317(a)(1) ............................ 6.08
(a)(2) ............................ 6.09
(b) ............................ 2.04
318(a) ............................ 10.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions................................................... 1
SECTION 1.02. Other Definitions............................................. 37
SECTION 1.03. Incorporation by Reference of Trust Indenture Act............. 38
SECTION 1.04. Rules of Construction......................................... 38
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating............................................... 39
SECTION 2.02. Execution and Authentication.................................. 40
SECTION 2.03. Registrar and Paying Agent.................................... 41
SECTION 2.04. Paying Agent To Hold Money in Trust........................... 41
SECTION 2.05. Securityholder Lists.......................................... 42
SECTION 2.06. Transfer and Exchange......................................... 42
SECTION 2.07. Replacement Securities........................................ 43
SECTION 2.08. Outstanding Securities........................................ 43
SECTION 2.09. Temporary Securities.......................................... 44
SECTION 2.10. Cancellation.................................................. 44
SECTION 2.11. Defaulted Interest............................................ 44
SECTION 2.12. CUSIP Numbers................................................. 45
SECTION 2.13. Issuance of Additional Securities............................. 45
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee............................................ 46
SECTION 3.02. Selection of Securities to Be Redeemed........................ 46
SECTION 3.03. Notice of Redemption.......................................... 46
SECTION 3.04. Effect of Notice of Redemption................................ 47
SECTION 3.05. Deposit of Redemption Price................................... 48
SECTION 3.06. Securities Redeemed in Part................................... 48
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities......................................... 48
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SECTION 4.02. SEC Reports................................................... 48
SECTION 4.03. Limitation on Indebtedness.................................... 50
SECTION 4.04. Limitation on Restricted Payments............................. 53
SECTION 4.05. Limitation on Restrictions on Distributions from Restricted
Subsidiaries.................................................. 60
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock............ 62
SECTION 4.07. Limitation on Affiliate Transactions.......................... 67
SECTION 4.08. Limitation on Lines of Business............................... 69
SECTION 4.09. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries....................................... 69
SECTION 4.10. Change of Control............................................. 70
SECTION 4.11. Limitation on Liens........................................... 72
SECTION 4.12. Limitation on Sale/Leaseback Transactions..................... 72
SECTION 4.13. Limitation on Designation of Subsidiaries as Unrestricted
Subsidiaries.................................................. 73
SECTION 4.14. Ratings....................................................... 76
SECTION 4.15. Compliance Certificate........................................ 76
SECTION 4.16. Further Instruments and Acts.................................. 77
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets..................... 77
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default............................................. 78
SECTION 6.02. Acceleration.................................................. 81
SECTION 6.03. Other Remedies................................................ 81
SECTION 6.04. Waiver of Past Defaults....................................... 82
SECTION 6.05. Control by Majority........................................... 82
SECTION 6.06. Limitation on Suits........................................... 82
SECTION 6.07. Rights of Holders to Receive Payment.......................... 83
SECTION 6.08. Collection Suit by Trustee.................................... 83
SECTION 6.09. Trustee May File Proofs of Claim.............................. 83
SECTION 6.10. Priorities.................................................... 84
SECTION 6.11. Undertaking for Costs......................................... 84
SECTION 6.12. Waiver of Stay or Extension Laws.............................. 85
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ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee............................................. 85
SECTION 7.02. Rights of Trustee............................................. 86
SECTION 7.03. Individual Rights of Trustee.................................. 87
SECTION 7.04. Trustee's Disclaimer.......................................... 87
SECTION 7.05. Notice of Defaults............................................ 88
SECTION 7.06. Reports by Trustee to Holders................................. 88
SECTION 7.07. Compensation and Indemnity.................................... 88
SECTION 7.08. Replacement of Trustee........................................ 89
SECTION 7.09. Successor Trustee by Merger................................... 90
SECTION 7.10. Eligibility; Disqualification................................. 91
SECTION 7.11. Preferential Collection of Claims Against Company............. 91
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.............. 91
SECTION 8.02. Conditions to Defeasance...................................... 92
SECTION 8.03. Application of Trust Money.................................... 94
SECTION 8.04. Repayment to Company.......................................... 94
SECTION 8.05. Indemnity for Government Obligations.......................... 94
SECTION 8.06. Reinstatement................................................. 94
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders.................................... 95
SECTION 9.02. With Consent of Holders....................................... 96
SECTION 9.03. Compliance with Trust Indenture Act........................... 97
SECTION 9.04. Revocation and Effect of Consents and Waivers................. 97
SECTION 9.05. Notation on or Exchange of Securities......................... 98
SECTION 9.06. Trustee To Sign Amendments.................................... 98
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls.................................. 98
SECTION 10.02. Notices....................................................... 99
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SECTION 10.03. Communication by Holders with Other Holders................... 99
SECTION 10.04. Certificate and Opinion as to Conditions Precedent............ 99
SECTION 10.05. Statements Required in Certificate or Opinion................. 100
SECTION 10.06. When Securities Disregarded................................... 100
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar.................. 101
SECTION 10.08. Legal Holidays................................................ 101
SECTION 10.09. Governing Law................................................. 101
SECTION 10.10. No Recourse Against Others.................................... 101
SECTION 10.11. Successors.................................................... 101
SECTION 10.12. Multiple Originals............................................ 101
SECTION 10.13. Table of Contents; Headings................................... 101
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security
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INDENTURE dated as of February 24, 2004 between
Roto-Rooter, Inc., a Delaware corporation (the "Company"), and
LaSalle Bank National Association, a national banking
association (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (a) the Company's 8-3/4%
Senior Notes Due 2011 issued on the date hereof (the "Original Securities"), (b)
any Additional Securities (as defined herein) that may be issued (all such
Securities in clauses (a) and (b) being referred to collectively as the "Initial
Securities") and (c) if and when issued pursuant to a registered exchange for
Initial Securities, the Company's 8-3/4% Senior Notes Due 2011 (the "Exchange
Securities", and together with the Initial Securities, the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"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 Permitted
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
another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person that
at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clauses (2)
or (3) above is primarily engaged in a Permitted Business.
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"Additional Securities" means, subject to the Company's compliance
with Section 4.03, 8-3/4% Senior Notes Due 2011 issued from time to time after
the Issue Date under the terms of this Indenture (other than pursuant to Section
2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange Securities
issued pursuant to an exchange offer for other Securities outstanding under this
Indenture).
"Adjusted Consolidated Leverage Ratio" as of any date of determination
means the Consolidated Leverage Ratio, calculated on a pro forma basis after
giving effect to the designation of the Specified Subsidiary Group as
Unrestricted Subsidiaries (including for purposes of calculating Consolidated
Indebtedness and EBITDA) and to any sales of Capital Stock, refinancings of
Indebtedness or other transactions consummated concurrently with such
designation.
"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 Sections 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% 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 any Security on any
redemption date, the excess (but not less than zero) of (i) the present value at
such redemption date of all remaining scheduled payments of interest (excluding
accrued interest) and principal on such Security (discounted at the equivalent
of the Treasury Rate plus 50 basis points over (ii) the then outstanding
principal amount of such Security.
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"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary)
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary or
(3) any other assets of the Company or any Restricted Subsidiary
(other than Capital Stock of Unrestricted Subsidiaries) outside of the
ordinary course of business of the Company or such Restricted Subsidiary
other than, in the case of (1), (2) and (3) above,
(A) disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Restricted Subsidiary,
(B) a disposition of directors' qualifying shares or shares required
by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary,
(C) a disposition of capital stock of the Specified Subsidiary
pursuant to a Qualifying Subsidiary Stock Sale or Qualifying Subsidiary
Stock Distribution if (x) the Net Cash Proceeds thereof are used to redeem
Securities pursuant to the third paragraph of paragraph 5 of the Securities
or (y) the Specified Subsidiary Group is then or has been designated as
Unrestricted Subsidiaries in accordance with Section 4.13(b); provided
that, notwithstanding the foregoing, if VHC is the Specified Subsidiary,
any sale of Capital Stock of VHC following an initial Qualifying Subsidiary
Stock Sale shall constitute an Asset Disposition to the extent that the
aggregate Net
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Cash Proceeds of all such sales of Capital Stock of VHC (following such
initial sale) exceed $25.0 million, unless at such time (x) the Company
owns less than 50% of the Voting Stock of VHC or (y) the Company would own
less than 50% of the Voting Stock as a result of such sale and the
provisions set forth in Section 4.10 are complied with,
(D) for purposes of Section 4.06 only, a disposition subject to
Section 4.04, and
(E) a disposition of assets with a Fair Market Value of less than
$100,000.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"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.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of the Board of Directors
of the Company.
"Business Day" means each day which is not a Legal Holiday.
"Capital Expenditures" means, without duplication, any expenditures
for any purchase or other acquisition of any asset which would be classified as
a fixed or capital asset on a consolidated balance sheet of
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the Company and its Consolidated Restricted Subsidiaries prepared in accordance
with GAAP.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations 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 shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be prepaid by the lessee
without payment of a penalty.
"Change of Control" means the occurrence of any of the following
events:
(1) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), is or becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that, for
purposes of this clause, 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), directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of the Company;
(2) the Company ceasing to be the beneficial owner (as defined in
Rules 13(d)(3) and 13(d)(5) under the Exchange Act), directly or
indirectly, of more than 50% of (i) the total voting power of the Voting
Stock of Vitas or (ii) the total number of outstanding shares of Capital
Stock of Vitas; or
(3) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by the Board of Directors
or whose nomination for election by
6
the shareholders of the Company was approved by a vote of 66 2/3% of the
directors of the Company then still in office who were either directors at
the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority
of the applicable board of directors then in office;
(4) the adoption of a plan relating to the liquidation or dissolution
of the Company; or
(5) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale, lease, transfer, conveyance or other disposition of all or
substantially all the assets of the Company, to another Person and, in the
case of any such merger or consolidation, other than a transaction
following which holders of securities that represented 100% of the Voting
Stock of the Company outstanding immediately prior to such transaction (or
other securities into which such securities are converted as part of such
merger or consolidation transaction) own directly or indirectly at least a
majority of the voting power of the Voting Stock of the surviving Person in
such merger or consolidation transaction immediately after such transaction
and in substantially the same proportion as before the transaction.
"Chemed Capital Trust" means Chemed Capital Trust, a Delaware
statutory business trust.
"Chemed Preferred Securities" means the convertible trust preferred
securities of Chemed Capital Trust issued in exchange for shares of Company
capital stock pursuant to an exchange offer completed on February 1, 2000. As of
January 31, 2004, 522,149 Chemed Preferred Securities were outstanding.
"Closing Date" means the date of this Indenture.
"Closing Date Stock Award Plan" means the Company's employee stock
award plan in existence on the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Company and its Consolidated Restricted
Subsidiaries calculated on a consolidated basis for such period.
"Consolidated Current Maturities" means, with reference to any period,
all payments of principal due within twelve (12) calendar months on and after
the last day of such period with respect to all Consolidated Indebtedness of the
Company.
"Consolidated Fixed Charge Coverage Ratio" for any period shall mean
the ratio of (i) EBITDA minus Consolidated Capital Expenditures to (ii)
Consolidated Interest Expense plus Consolidated Current Maturities during such
period plus cash dividends paid on the equity interests of the Company during
such period plus expenses for taxes paid or taxes accrued during such period,
all calculated for the Company and its Consolidated Restricted Subsidiaries on
a consolidated basis.
"Consolidated Indebtedness" means, as of any date of determination,
the total Indebtedness of the Company and its Consolidated Restricted
Subsidiaries, without duplication, other than, at any time prior to January 1,
2005, the Trust Securities.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Consolidated Restricted Subsidiaries,
plus, to the extent Incurred by the Company and its Consolidated Restricted
Subsidiaries in such period but not included in such interest expense, without
duplication:
(1) interest expense attributable to Capitalized Lease Obligations and
the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction,
(2) amortization of debt discount and debt issuance costs, provided
that the fees paid by the Company to the lenders under the Credit Agreement
and
8
to the placement agent in connection with the offering and sale, on the
Issue Date, of the Original Securities and the Floating Rate Notes shall
not be included,
(3) capitalized interest,
(4) noncash interest expense,
(5) commissions, discounts and other fees and charges attributable to
letters of credit and bankers' acceptance financing,
(6) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by the Company or any Restricted
Subsidiary,
(7) net costs associated with Hedging Obligations (including
amortization of fees),
(8) dividends in respect of all Disqualified Stock of the Company and
all Preferred Stock of any of the Subsidiaries of the Company, to the
extent held by Persons other than the Company or a Wholly Owned Subsidiary;
provided that regular, scheduled dividends on the Trust Securities declared
or paid prior to January 1, 2005, shall not be included, and
(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.
Notwithstanding anything to the contrary herein, any premium paid in
connection with the repayment of Indebtedness of the Company in connection with
the Transactions and interest on the Trust Securities paid on or prior to
January 1, 2005 shall not be included in Consolidated Interest Expense.
"Consolidated Leverage Ratio" as of any date of determination means
the ratio of:
(1) Consolidated Indebtedness at such time to
9
(2) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days prior to the date
of such determination;
provided, however, that:
(A) if the Company or any Restricted Subsidiary 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 Leverage Ratio is an
Incurrence of Indebtedness, EBITDA for such period shall 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
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,
(B) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on
the date of the transaction giving rise to the need to calculate the
Consolidated Leverage Ratio, EBITDA for such period shall be
calculated on a pro forma basis as if such discharge had occurred on
the first day of such period and as if the Company or such Restricted
Subsidiary has not earned the interest income actually earned during
such period in respect of cash or Temporary Cash Investments used to
repay, repurchase, defease or otherwise discharge such Indebtedness,
(C) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, the
EBITDA for such period shall be reduced by an amount equal
10
to the EBITDA (if positive) directly attributable to the assets that
are the subject of such Asset Disposition for such period or
increased by an amount equal to the EBITDA (if negative) directly
attributable thereto for such period,
(D) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person that becomes a
Restricted Subsidiary) 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 an operating unit of a business, EBITDA for such
period shall 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,
(E) 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) shall have Incurred any Indebtedness or discharged any
Indebtedness or made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant
to clause (C) or (D) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA for such period shall be
calculated after giving pro forma effect thereto as if such
Incurrence, discharge, Asset Disposition, Investment or acquisition of
assets occurred on the first day of such period, and
(F) if since the beginning of such period, the Specified
Subsidiary Group has been designated as Unrestricted Subsidiaries,
EBITDA for such period shall be calculated after giving pro forma
effect thereto as if such designation 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 shall
be determined
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in good faith by a responsible financial or accounting Officer of the Company
and (i) shall comply, to the extent not inconsistent with the provisions of
this Indenture, with the requirements of Rule 11-02 of Regulation S-X of the
SEC and (ii) may include adjustments for operating expense reductions that
would be permitted by such Rule.
If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness shall 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 as at the date of determination in excess of 12 months).
"Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its Consolidated Subsidiaries for such period; provided,
however, that there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the limitations contained in clause (4) below, the
Company's equity in the net income of any such Person for such period
shall 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
made to a Restricted Subsidiary, to the limitations contained in
clause (3) below) and
(B) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net
Income;
(2) any net income (or loss) of any Person acquired by the Company or
a Subsidiary of the Company in a pooling of interests transaction for any
period prior to the date of such acquisition;
(3) any net income (or loss) of any Restricted Subsidiary if such
Restricted 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 clause (4) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash permitted to be distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution made 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 shall be included in determining such
Consolidated Net Income;
(4) any gain (but not loss) realized upon the sale or other
disposition of any asset of the Company or its Consolidated Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) that is not sold or
otherwise disposed of in the ordinary course of business and any gain (but
not loss) realized upon the sale or other disposition of any Capital Stock
of any Person;
(5) the net after tax effect of any extraordinary gain or loss
(including all fees and expenses related to such extraordinary gain or
loss) or of any impairment loss on or writedown of goodwill; and
(6) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purpose of Sections 4.04 and
4.13 only, there shall be excluded from Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or a Restricted Subsidiary to the extent such
dividends, repayments or transfers increase
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the amount of Restricted Payments permitted under Section 4.04(a)(4)(C)(iv).
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of the
Company ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as
(1) the par or stated value of all outstanding Capital Stock of the
Company plus,
(2) paid-in capital or capital surplus relating to such Capital Stock
plus,
(3) any retained earnings or earned surplus less,
(A) any accumulated deficit, and
(B) any amounts attributable to Disqualified Stock.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; provided, however, that "Consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Agreement" means the credit agreement dated as of February 24,
2004, among the Company, Bank One, NA and others, together with any guarantees,
collateral documents, instruments and agreements executed in connection
therewith, in each case, as amended, restated, supplemented, waived, replaced
(whether or not upon termination, and whether with the original lenders or
otherwise), refinanced, restructured or otherwise modified from time to time
(except to the extent that any such amendment, restatement, supplement, waiver,
replacement, refinancing, restructuring or other modification thereto would be
prohibited by the terms of this Indenture, unless otherwise agreed to by the
Holders of at least a majority
14
in aggregate principal amount of Securities at the time outstanding).
"Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreements or other similar agreement or
arrangement to which such Person is a party or of which it is a beneficiary.
"Customary Transition Agreement" means any agreement to which both (x)
the Company or any of its Restricted Subsidiaries and (y) any Person that is
part of the Specified Subsidiary Group (or any director or officer of any such
Person) is a party, which is entered into in connection with the carve out, spin
off or split off of the Specified Subsidiary Group from the Company, including
any agreement that provides for the sale, transfer, disposition or allocation of
assets and liabilities (including contingent and tax liabilities and including
indemnification arrangements in connection therewith), the sale or disposition
of capital stock of the Specified Subsidiary Group (including underwriting
agreements), the provision of transition services (including administrative,
tax, accounting and insurance services) or the licensing or leasing of property
(such as intellectual property or real property); provided that:
(1) the Specified Subsidiary Group is (or has been) designated as
Unrestricted Subsidiaries as permitted by Section 4.13;
(2) such agreements are customary in carve out, spin off or split off
transactions; and
(3) the terms of such agreements, taken as a whole, are fair to the
Company and its Restricted Subsidiaries.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event:
15
(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 convertible or exchangeable solely at the
option of the Company or a Restricted Subsidiary; provided, however, that
any such conversion or exchange shall be deemed an Incurrence of
Indebtedness or Disqualified Stock, as applicable) or
(3) is redeemable at the option of the holder thereof, in whole or in
part,
in the case of each of clauses (1), (2) and (3), on or prior to the first
anniversary of the Stated Maturity of the Securities; provided, however, that
any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the first anniversary of the Stated
Maturity of the Securities shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the
provisions applicable to the Securities in Sections 4.06 and 4.10.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus, without duplication, the following to the extent deducted in
calculating such Consolidated Net Income:
(1) income tax expense of the Company and its Consolidated Restricted
Subsidiaries,
(2) Consolidated Interest Expense,
(3) depreciation expense of the Company and its Consolidated
Restricted Subsidiaries,
(4) amortization expense of the Company and its Consolidated
Restricted Subsidiaries (including amortization recorded in connection with
the application of Financial Accounting Standard No. 142 (Goodwill and
Other Intangibles)),
16
(5) payments made in connection with the Non-Competition and
Consulting Agreement dated as of December 18, 2003, between the Company and
Xxxx Xxxxxxxxx (the "Xxxxxxxxx Agreement") in the amount of $25.0 million
and transaction fees and expenses paid in connection with the Transactions,
(6) any severance payments related to the acquisition of Vitas, as
contemplated by the Private Placement Memorandum and not to exceed $14.5
million, plus any related employment taxes and employee benefit charges,
(7) dividends, distributions and payments not in excess of $2.8
million under the Closing Date Stock Award Plan, and
(8) all other noncash charges of the Company and its Consolidated
Restricted Subsidiaries (excluding any such noncash charge to the extent it
represents an accrual of or reserve for cash expenditures in any future
period) less all non-cash items of income of the Company and its
Consolidated Restricted Subsidiaries,
in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and noncash charges
of, a Restricted Subsidiary of the Company shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income (loss) of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Equity Offering" means a public or private offering of Capital Stock
of the Company pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption to the registration requirements
under the Securities Act.
17
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means the debt securities of the Company issued
pursuant to this Indenture in exchange for, and in an aggregate principal amount
equal to, the Initial Securities, in compliance with the terms of the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the
price which 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. For all purposes
of this Indenture, the Fair Market Value of property or assets which involve an
aggregate amount in excess of $25.0 million shall be set forth in a resolution
approved by the Board of Directors in good faith; provided that for property or
assets, other than cash, Indebtedness or readily marketable securities, in an
aggregate amount in excess of $50.0 million, Fair Market Value shall be
determined in writing by a nationally recognized appraisal or investment banking
firm.
"Floating Rate Notes" means the Floating Rate Senior Secured Notes due
2010 issued by the Company under the Indenture dated as of February 24, 2004,
between the Company, certain of its subsidiaries and Xxxxx Fargo Bank, N.A., as
trustee, and any exchange notes issued under such indenture.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those set forth
in:
(1) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants,
(2) statements and pronouncements of the Financial Accounting
Standards Board,
(3) such other statements by such other entities as approved by a
significant segment of the accounting profession, and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements
18
(including pro forma financial statements) in periodic reports required
to be filed pursuant to Section 13 of the Exchange Act, including opinions
and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
All ratios and computations based on GAAP contained in this Indenture
shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
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 or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreements 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 or other obligation 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" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any
19
Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Person at the time it
becomes a Subsidiary. The term "Incurrence" when used as a noun shall have a
correlative meaning. Solely for purposes of determining compliance with
Section 4.03:
(1) amortization of debt discount or the accretion of principal with
respect to a non-interest bearing or other discount security;
(2) the payment of regularly scheduled interest in the form of
additional Indebtedness of the same instrument or the payment of regularly
scheduled dividends on Capital Stock (other than Disqualified Stock) in the
form of additional Capital Stock of the same class and with the same terms;
and
(3) the obligation to pay a premium in respect of Indebtedness arising
in connection with the issuance of a notice of redemption or the making of
a mandatory offer to purchase such Indebtedness
will not be deemed to be the Incurrence of Indebtedness.
"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;
(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) all obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations with respect
thereto but excluding obligations in respect of letters of credit securing
obligations (other than obligations in clauses (1), (2), (4) or (5) hereof)
entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth
20
Business Day following payment on the letter of credit);
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables or other
obligations arising in the ordinary course of business), which purchase
price is due more than six months after the date of placing such property
in service or taking delivery and title thereto or the completion of such
services;
(5) all Capitalized Lease Obligations and all Attributable Debt of
such Person;
(6) the amount 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 of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(7) 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 Indebtedness of such Person shall 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) all net obligations of such person in respect of Interest Rate
Agreements or Currency Agreements; and
(9) all obligations of the type referred to in clauses (i) through
(viii) of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency
21
giving rise to the obligation, of any contingent obligations at such date.
"Interest Period" means, for any interest payment date, a period from
and including the preceding interest payment date to but excluding such interest
payment date, provided, however, that the initial Interest Period will be the
period from and including the series issuance date to but excluding the August
15, 2004 interest payment date.
"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 agreement or
other similar agreement or arrangement to which such Person is party or of which
it is a beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of Guarantee or similar arrangement) 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. Except as otherwise provided for
herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.04:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall 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
22
(B) the portion (proportionate to the Company's equity interest
in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its Fair Market Value at the time of such transfer.
"Issue Date" means February 24, 2004.
"Legal Holiday" means a Saturday, Sunday or other day on which banking
institutions are not required by law or regulation to be open in the State of
Illinois.
"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 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, as a consequence of such Asset
Disposition,
(2) all payments made on any Indebtedness other than Indebtedness
under the indenture for the Floating Rate Notes and the Credit Agreement
which is secured by any assets subject to such Asset Disposition, in
accordance with the terms of any Lien upon or other security agreement of
any kind with respect to such assets, or which must by its terms, or in
order to obtain a consent to such Asset Disposition, or by
23
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) appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property
or other assets disposed of in such Asset Disposition and retained by the
Company or any Restricted Subsidiary after such Asset Disposition or
liabilities under indemnification obligations associated with such Asset
Disposition or any purchase price adjustments.
"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, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Recourse Debt" means Indebtedness 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 guarantor or otherwise); and (c) as to which there is no recourse
against any of the assets of the Company or its Restricted Subsidiaries (other
than assets or Capital Stock of Unrestricted Subsidiaries, provided however,
that Indebtedness of an Unrestricted Subsidiary which consists of a Guarantee of
Indebtedness of the Company or a Restricted Subsidiary to a Person other than an
Unrestricted Subsidiary, or a lien on property or stock of an Unrestricted
Subsidiary that secures Indebtedness of the Company or a Restricted Subsidiary
to a Person other than an Unrestricted Subsidiary, shall be deemed to constitute
Non-Recourse Debt as long as the Unrestricted Subsidiary does not have recourse
against the Company or a Restricted Subsidiary under such Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the
24
President, any Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"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 Business" means any business engaged in by the Company or
any Restricted Subsidiary on the Closing Date and any related, ancillary or
complementary business.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Permitted 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;
provided, however, that such Person's primary business is a Permitted
Business;
(3) Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; 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) payroll, travel and similar advances 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;
25
(6) loans or advances to employees made in the ordinary course of
business consistent with prudent practices and applicable law and not
exceeding $2 million at any time outstanding;
(7) 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;
(8) any Person to the extent such Investment represents the noncash
portion of the consideration received for an Asset Disposition that was
made pursuant to and in compliance with Section 4.06;
(9) the Specified Subsidiary Group following any designation of the
Specified Subsidiary Group as Unrestricted Subsidiaries pursuant to Section
4.13;
(10) any Person; provided, that the payment for such Investments
consists solely of Capital Stock of the Company (other than Disqualified
Stock);
(11) any Person consisting of the licensing of intellectual property
pursuant to joint ventures, strategic alliances or joint marketing
arrangements with such Person, in each case made in the ordinary course of
business;
(12) a vendor or supplier consisting of loans or advances to such
vendor or supplier in connection with any guarantees to the Company or any
Restricted Subsidiary of supply by, or to fund the supply capacity of, such
vendor or supplier, in any case not to exceed $2.0 million at any one time
outstanding;
(13) loans and other Investments in independent contractors and
subcontractors of the Company or its Restricted Subsidiaries, not to exceed
$4.0 million at any one time outstanding; or
(14) any other Investments to the extent such Investments, when taken
together with all other Investments made pursuant to this clause (14)
outstanding on the date such Investment is made, do not exceed $5.0
million.
26
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker'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 of 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 duties or for the payment of rent, in each case
Incurred in the ordinary course of business;
(2) Liens imposed by law, such as landlords', carriers',
warehousemen's and mechanics' Liens, in each case for sums not yet due or
being contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with respect to
which such Person shall then be proceeding with an appeal or other
proceedings for review;
(3) Liens for taxes, assessments or governmental charges or levies
either not yet due or payable or subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings;
(4) Liens in favor of issuers of surety bonds or letters of credit
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;
(5) minor survey exceptions, minor 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 property or Liens
incidental to the conduct of the business of such Person or to the
ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect
the value of
27
said properties or materially impair their use in the operation of the business
of such Person;
(6) Liens securing Indebtedness permitted to be Incurred pursuant to
Section 4.03(b)(8); provided, however, that the Lien may not extend to any
other property owned by such Person or any of its Subsidiaries at the time
the Lien is Incurred;
(7) Liens to secure Indebtedness permitted pursuant to paragraph (a)
or clauses (1), (3)(B), (9) or (13) of Section 4.03(b) and other Credit
Agreement Obligations;
(8) Liens existing on the Closing Date;
(9) Liens on property or shares of stock of another Person at the time
such other Person becomes a Subsidiary of such Person; provided, however,
that such Liens are not created, Incurred or assumed in connection with, or
in contemplation of, such other Person becoming such a Subsidiary; provided
further, however, that such Liens do not extend to any other property owned
by such Person or any of its Subsidiaries;
(10) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means of a
merger or consolidation with or into such Person or any Subsidiary of such
Person; provided, however, that such Liens are not created, Incurred or
assumed in connection with, or in contemplation of, such acquisition;
provided further, however, that the Liens do not extend to any other
property owned by such Person or any of its Subsidiaries;
(11) Liens securing obligations under Hedging Obligations so long as
such obligations relate to Indebtedness permitted to be Incurred pursuant
to Section 4.03 that is, and is permitted under this Indenture to be,
secured by a Lien on the same property securing such obligations;
(12) Liens to secure any Refinancing (or successive Refinancings) as a
whole, or in part, of any Indebtedness secured by any Lien referred to in
28
the foregoing clauses (6), (7), (8), (9) or (10); provided, however, that:
(A) such new Lien shall be limited to all or part of the same
property that secured the original Lien (plus improvements to or on
such property) and
(B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of:
(x) the outstanding principal amount or, if greater,
committed amount of the Indebtedness secured by Liens described
under clauses (6), (7), (8), (9) or (10) at the time the original
Lien became a Permitted Lien under this Indenture and
(y) an amount necessary to pay any fees and expenses,
including premiums, related to such Refinancings; and
(13) Liens to secure Indebtedness permitted to be Incurred pursuant to
Section 4.03 or other obligations in an aggregate principal amount which,
when taken together with all other Indebtedness and obligations secured by
Liens pursuant to this clause (13) and remaining outstanding, does not
exceed $10.0 million at any time.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that 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 Person,
over shares of Capital Stock of any other class of such Person.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the
29
Security which is due or overdue or is to become due at the relevant time.
"Private Placement Memorandum" means the Private Placement Memorandum
dated February 24, 2004, relating to the issuance by Roto-Rooter, Inc. of (i)
2,000,000 shares of Capital Stock, par value $1.00 per share, (ii) $110.0
million of Floating Rate Notes and (iii) $150.0 million of Securities.
"Purchase Money Indebtedness" means Indebtedness:
(1) consisting of the deferred purchase price of property, conditional
sale obligations, obligations under any title retention agreement, other
purchase money obligations and obligations in respect of industrial revenue
bonds, in each case where the maturity of such Indebtedness does not exceed
the anticipated useful life of the property being financed, and
(2) Incurred to finance the acquisition, construction or lease by the
Company or a Restricted Subsidiary of the property, including additions and
improvements thereto;
provided, however, that the Indebtedness is Incurred within 180 days
after the acquisition, construction or lease of the property by the
Company or Restricted Subsidiary.
"Qualifying Subsidiary Stock Distribution" means a distribution by the
Company to its shareholders of the Capital Stock of RRM (if RRM is the Specified
Subsidiary) if after giving effect thereto (and to any transactions consummated
in connection therewith) (x) at least 10% of such Capital Stock (calculated on a
fully diluted basis) would be held by persons other than the Company, any
Subsidiary of the Company, any director or officer of any of the foregoing or
any employee stock ownership plan or other trust established by the Company or
any of its Subsidiaries; and (y) the Company has designated, or would then be
permitted to designate, the Specified Subsidiary Group as Unrestricted
Subsidiaries pursuant to the conditions set forth in Section 4.13.
"Qualifying Subsidiary Stock Sale" means a sale of Capital Stock of
the Specified Subsidiary pursuant to an underwritten public offering or private
sale, whether by
30
means of a primary offering or a sale by the Company or any subsidiary
thereof, after which at least 10% of such Capital Stock (calculated on a fully
diluted basis) is held by persons other than the Company, a subsidiary of the
Company, a director or officer of any of the foregoing or any employee stock
ownership plan or other trust established by the Company or any of its
Subsidiaries. The exercise of an underwriter's overallotment option shall be
construed as part of the same Qualifying Subsidiary Stock Sale with respect to
which such option was granted.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness exchange or replacement for, such Indebtedness. "Refinanced"
and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
Refinance any Indebtedness of the Company or any Restricted Subsidiary existing
on the Closing Date or Incurred in compliance with this Indenture (including
Indebtedness of the Company that Refinances Refinancing Indebtedness); provided,
however, that:
(1) the Refinancing Indebtedness has a Stated Maturity no earlier than
the Stated Maturity of the Indebtedness being Refinanced;
(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 aggregate principal amount
(or if issued with original issue discount, the aggregate accreted value)
then outstanding of the Indebtedness being Refinanced; and
(4) if the Indebtedness being Refinanced is contractually subordinated
in right of payment to the Securities, such Refinancing Indebtedness is
contractually subordinated in right of payment to the Securities at least
to the same extent as the Indebtedness being Refinanced;
31
provided further, however, that Refinancing Indebtedness shall not include:
(A) Indebtedness of a Restricted Subsidiary that Refinances
Indebtedness of the Company or
(B) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of February 24, 2004, among the Company, the initial Holders,
the initial holders of the Floating Rate Notes and certain other Persons.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"RRM" means Roto-Rooter Management Company or any successor thereto by
any merger or consolidation which is permitted under this Indenture ("RR
Management") or, at the election of the Company (which shall be specified in
writing to the Trustee) for purposes of the designation of the Specified
Subsidiary, RRM shall mean any Subsidiary of the Company of which RR Management
is a Wholly Owned Subsidiary and which owns no other assets other than assets
incidental to the ownership of RR Management.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or such 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 Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Senior Indebtedness" of the Company or any Subsidiary means the
principal of, premium (if any) and accrued and unpaid interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
32
reorganization of the Company or any Subsidiary, regardless of whether or not
a claim for post-filing interest is allowed in such proceedings), and fees and
other amounts owing in respect of, Indebtedness of the Company or any
Subsidiary, as applicable, whether outstanding on the Closing Date or
thereafter Incurred, unless in the instrument creating or evidencing the same
or pursuant to which the same is outstanding it is provided that such
obligations are subordinated in right of payment to the Securities; provided,
however, that Senior Indebtedness of the Company or any Subsidiary shall not
include:
(1) any obligation of the Company to any Subsidiary of the Company or
of such Subsidiary to the Company or any other Subsidiary of the Company;
(2) any liability for Federal, state, local or other taxes owed or
owing by the Company or such Subsidiary, as applicable;
(3) any accounts payable or other liability to trade creditors arising
in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities);
(4) any Indebtedness or obligation of the Company (and any accrued and
unpaid interest in respect thereof) that by its terms is subordinate or
junior in any respect to any other Indebtedness or obligation of the
Company or such Subsidiary, as applicable, including any Senior
Subordinated Indebtedness and any Subordinated Obligations of the Company
or such Subsidiary, as applicable;
(5) any obligations with respect to any Capital Stock; or
(6) any Indebtedness Incurred in violation of this Indenture.
"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.
"Specified Subsidiary" shall mean the Subsidiary of the Company that
is designated as the Specified Subsidiary pursuant to Section 4.13.
33
"Specified Subsidiary Group" shall mean the Subsidiary of the Company
that is designated as the Specified Subsidiary pursuant to the covenant
described under Section 4.13, together with all Subsidiaries of such Person.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Chemed Debentures" means the Convertible Junior
Subordinated Debentures due 2030, issued by the Company pursuant to the
indenture dated as of February 7, 2000, between the Company and Firstar Bank,
National Association, as trustee.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Closing Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
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.
"Temporary Cash Investments" means any of the following:
34
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations Guaranteed by the United
States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company that is organized under the laws
of the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and
undivided profits aggregating in excess of $250,000,000 (or the foreign
currency equivalent thereof) and whose long-term debt is rated "A" (or such
similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the
Securities Act);
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
(4) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Xxxxx'x Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
Service, a division of The XxXxxx-Xxxx Companies, Inc. ("S & P"); and
(5) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or "A" by Xxxxx'x Investors Service, Inc.
35
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Transactions" means, collectively, the following transactions, which
shall be consummated on or about the date of the closing of the offering of the
Original Securities: (i) the consummation of the merger of Vitas with and into
an indirect Wholly Owned Subsidiary of the Company pursuant to a merger
agreement dated as of December 18, 2003, among the Company, Vitas and Xxxxxx
Merger Corp., (ii) the repayment of approximately $74.4 million of existing
indebtedness of Vitas, plus accrued interest thereon, (iii) the repayment of
approximately $29.4 million of existing indebtedness of the Company (including a
$3.0 million make whole premium), plus accrued interest thereon, (iv) the
assignment of the Xxxxxxxxx Agreement by the Company to Vitas, the payment of
$25.0 million by Vitas to Xxxx X. Xxxxxxxxx pursuant to the Xxxxxxxxx Agreement
and the performance of the other obligations under the Xxxxxxxxx Agreement, (v)
the consummation of the offering and sale of Floating Rate Notes, the Original
Securities and Capital Stock of the Company and the execution and delivery of
notes, indentures and other agreements in connection therewith, (vi) the Company
and certain of its Subsidiaries entering into the Credit Agreement and the
borrowing on the Closing Date of $75.0 million thereunder (vii) the issuance or
deemed issuance of letters of credit under the Credit Agreement to replace or
backstop, or the cash collateralization of, letters of credit issued for the
account of the Company or any of its Subsidiaries or Vitas or any of its
Subsidiaries, (viii) the cancelation of a warrant held by the Company for shares
of Vitas stock and (ix) the payment of fees and expenses in connection with the
foregoing.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at
36
least two Business Days prior to the date fixed for redemption (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the then remaining average life to
February 24, 2007, provided, however, that if the average life to February 24,
2007 of the Securities is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the weekly average yields of United States Treasury securities
for which such yields are given, except that if the average life to February 24,
2007, of the Securities is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used.
"Trustee" means the party named as such in the Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Trust Securities" means the Chemed Preferred Securities, the
Subordinated Chemed Debentures and the guarantee by the Company to the holders
of the Chemed Preferred Securities of amounts payable thereunder.
"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 in
the manner provided in Section 4.13 and
(2) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
37
"Vitas" means Vitas Healthcare Corporation or any successor thereto by
any merger, consolidation or other transaction which is permitted hereunder.
"VHC" means Vitas or, at the election of the Company (which shall be
specified in writing to the Trustee) for purposes of the designation of the
Specified Subsidiary, VHC means any Wholly Owned Subsidiary of the Company of
which Vitas is a Subsidiary and which owns no other assets other than assets
incidental to the ownership of Vitas.
"VNF" means Vitas of North Florida, Inc., a Florida not-for-profit
corporation and a Wholly Owned Subsidiary of Vitas.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Xxxxxxxxx Agreement" has the meaning assigned to such term in the
definition of "EBITDA".
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares or
shares issued to third parties to the extent necessary to satisfy any licensing
requirements under applicable law with respect to the Company's or any of its
Subsidiaries' business) is owned by the Company or another Wholly Owned
Subsidiary.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -----------
"Affiliate Transaction"....................................... 4.07(a)
"Bankruptcy Law".............................................. 6.01
"Change of Control Offer"..................................... 4.09(b)
"covenant defeasance option".................................. 8.01(b)
"Custodian"................................................... 6.01
"Event of Default"............................................ 6.01
"Initial Lien"................................................ 4.11
"legal defeasance option"..................................... 8.01(b)
"Offer"....................................................... 4.06(b)
"Offer Amount"................................................ 4.06(c)(2)
38
"Offer Period"................................................ 4.06(c)(2)
"Paying Agent"................................................ 2.03
"Purchase Date"............................................... 4.06(c)(1)
"Registrar"................................................... 2.03
"Successor Company"........................................... 5.01(a)(1)
SECTION 1.03. 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" means the SEC;
"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; and
"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 by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. 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;
39
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) secured Indebtedness shall not be deemed to be subordinate or
junior to any other secured Indebtedness merely because it has a junior
priority with respect to the same collateral;
(8) 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;
(9) the principal amount of any Preferred Stock shall be (A) the
maximum liquidation value of such Preferred Stock or (B) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater;
(10) all references to the date the Securities were originally issued
shall refer to the Issue Date; and
(11) references to "interest" with respect to the Securities in this
Indenture shall include any additional interest payable pursuant to the
Registration Rights Agreement.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in the Appendix attached
hereto (the "Appendix") which is hereby incorporated in, and expressly made part
of, this Indenture. The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit 1 to the
Appendix which is hereby incorporated in, and expressly made a part of, this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or
40
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The terms of the Securities set forth in
the Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. EXECUTION AND AUTHENTICATION. An 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 signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
On the Issue Date, the Trustee shall authenticate and deliver $150.0
million of the Securities and, at any time and from time to time thereafter, the
Trustee shall authenticate and deliver Securities for original issue in an
aggregate principal amount specified in such order, 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. Such 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, in the case of an
issuance of Additional Securities pursuant to Section 2.13 after the Issue Date,
shall certify that such issuance is in compliance with Section 4.03. The
aggregate principal amount of Securities outstanding at any time may not exceed
$300.0 million except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has
41
the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.
SECTION 2.03. 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 Registrar
shall keep a register of the Securities and of their transfer and exchange. 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.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar 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 any 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 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company 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 to pay all money held by it to the Trustee and to account
for any funds disbursed by the
42
Paying Agent. Upon complying with this Section, the Paying Agent shall have no
further liability for the money delivered to the Trustee.
SECTION 2.05. 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, the Company shall 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 2.06. TRANSFER AND EXCHANGE. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and Section
8-401(1) of the Uniform Commercial Code are met. When Securities are presented
to the Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or transfer
pursuant to Sections 3.06, 4.10 and 9.05). The Company shall not be required to
make and the Registrar need not register transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be redeemed in
part, the portion thereof not to be redeemed) or any Securities for a period of
15 days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem
43
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, whether
or not such Security is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
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.
SECTION 2.07. REPLACEMENT 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 and the Holder 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, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional Obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
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 because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, 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.
44
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, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and 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 and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a payment
of interest on the Securities, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
45
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee
shall use "CUSIP" 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 numbers.
SECTION 2.13. ISSUANCE OF ADDITIONAL SECURITIES. The Company shall be
entitled, subject to its compliance with Section 4.03, to issue Additional
Securities (in an aggregate principal amount not to exceed $150,000,000) under
this Indenture which shall have identical terms as the Initial Securities issued
on the Issue Date, other than with respect to the date of issuance and issue
price. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture.
With respect to any Additional Securities, the Company shall set forth
in a resolution of the Board of Directors and an Officers' Certificate, a copy
of each which shall be delivered to the Trustee, 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, the issue date and the CUSIP number of such
Additional Securities; provided, however, that no Additional Securities may
be issued at a price that would cause such Additional Securities to have
"original issue discount" within the meaning of Section 1273 of the Code;
and
(3) whether such Additional Securities shall be Transfer Restricted
Securities and issued in the form of Initial Securities as set forth in the
Appendix to this Indenture or shall be issued in the form of Exchange
Securities as set forth in Exhibit A.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
Any notice of redemption may provide that the redemption will be
subject to specified conditions, provided that such conditions are not solely
within the Company's control.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice
47
of redemption by first-class mail to each Holder of Securities
to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities; and
(8) any condition to such redemption permitted under Section 3.01.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice; provided
that if there is any condition to the Company's obligation to redeem such
Securities which is permitted by Section 3.01 and stated in the notice of
redemption, such Securities shall not be deemed due and payable unless and
48
until such condition is satisfied or waived. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
related interest payment date). Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice to any other
Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which have been delivered by the Company to the Trustee
for cancellation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. 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 money sufficient to pay all
principal and interest then due.
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.
SECTION 4.02. SEC REPORTS. Whether or not required by the SEC's rules
and regulations, so long as any Securities are outstanding, the Company will
furnish to the
49
Holders, within the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to be
filed with the SEC on Forms 10-Q and 10-K if the Company was required to
file such reports; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company was required to file such reports.
All such reports will be prepared in all material respects in
accordance with all of the SEC's rules and regulations applicable to such
reports, and each annual report on Form 10-K will include a report on the
Company's consolidated financial statements by the Company's certified
independent accountants. The Company's reporting obligations with respect to
clauses (1) and (2) above shall be deemed satisfied in the event the Company
files these reports with the SEC on XXXXX.
If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless be required to continue to file the reports specified in the
preceding paragraph with the SEC within the time periods specified above unless
the SEC will not accept such a filing. The Company agrees that it will not take
any action for the sole purpose of causing the SEC not to accept any such
filings (it being understood and agreed that, if the Company is entitled to
suspend its reporting obligations under the Exchange Act, the Company shall not
be prevented from making any filings necessary to suspend such obligations). If,
notwithstanding the foregoing, the SEC will not accept the Company's filings for
any reason, the Company will post the reports referred to in the preceding
paragraph on its website within the time periods that would apply if the Company
was required to file those reports with the SEC.
In addition, the Company agrees that, for so long as any Securities
remain outstanding, at any time they are not required to file the reports
required by the preceding paragraphs with the SEC, they will furnish to the
Holders and to securities analysts and prospective investors, upon their written
request, the information required to be
50
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company and its
Restricted Subsidiaries may Incur Indebtedness if on the date of such Incurrence
and after giving effect thereto the Consolidated Leverage Ratio would be no
greater than (i) prior to any designation of the Specified Subsidiary Group as
Unrestricted Subsidiaries, (x) 5.75 to 1 if such Incurrence occurs on or prior
to December 31, 2004 and (y) 5.5 to 1, if such Incurrence occurs after December
31, 2004 and (ii) on or following any designation of the Specified Subsidiary
Group as Unrestricted Subsidiaries, (x) 5.0 to 1, if the Specified Subsidiary is
VHC and (y) 4.0 to 1, if the Specified Subsidiary is RRM.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Agreement in an
aggregate principal amount not to exceed $135.0 million less the aggregate
amount of all Net Available Cash applied by the Company or any of its
Restricted Subsidiaries to repay Indebtedness under the Credit Agreement
pursuant to Section 4.06(a)(3)(A) solely to the extent the corresponding
commitments relating to such Indebtedness are permanently reduced;
(2) Indebtedness of the Company owed to and held by any Restricted
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
the Company or any Restricted Subsidiary; provided, however, that (A) any
subsequent issuance or transfer of any Capital Stock or any other event
that results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of any such Indebtedness (except to
the Company or a Restricted Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by the issuer thereof and
(B) 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;
51
(3) Indebtedness represented by (A) the Securities (not including any
Additional Securities) and any Exchange Notes and (B) the Floating Rate
Notes and the Guarantees of the Floating Rate Notes by Subsidiaries of the
Company (but not including any additional Floating Rate Notes but including
any exchange notes under the indenture for the Floating Rate Notes);
(4) Indebtedness outstanding on the Closing Date (other than the
Indebtedness described in clauses (1), (2) or (3) above);
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on or prior to the date on which such Restricted Subsidiary was acquired by
the Company (other than Indebtedness Incurred in contemplation of, in
connection with, as consideration in, or to provide all or any portion of
the funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted Subsidiary
became a Subsidiary of or was otherwise acquired by the Company); provided,
however, that on the date that such Restricted Subsidiary is acquired by
the Company, either (x) the Company would have been able to incur $1.00 of
additional indebtedness pursuant to Section 4.03(a) after giving effect to
such acquisition or (y) the Consolidated Leverage Ratio after giving effect
to such acquisition and any related transactions would be no greater than
the Consolidated Leverage Ratio as of such date without giving effect to
such acquisition and any related transactions;
(6) Refinancing Indebtedness in respect of any Indebtedness Incurred
pursuant to Section 4.03(a) or clause (3), (4), this clause (6) or clause
(9) of this paragraph (b);
(7) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by the
Company and the Restricted Subsidiaries in the ordinary course of their
business, and (B) under Interest Rate Agreements entered into for bona fide
hedging purposes of the Company in the ordinary course of business;
provided, however, that such Interest Rate Agreements do not increase the
Indebtedness of the Company outstanding
52
at any time other than as a result of fluctuations in interest rates or by
reason of fees, indemnities and compensation payable thereunder;
(8) Purchase Money Indebtedness, mortgage financings and Capitalized
Lease Obligations in an aggregate principal amount not in excess of $3.0
million at any time outstanding;
(9) Indebtedness Incurred at a Restricted Subsidiary, to the extent
the proceeds of such Indebtedness are used to repay Indebtedness under the
Credit Agreement and/or the Floating Rate Notes;
(10) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, provided that such
Indebtedness is extinguished within five Business Days of its Incurrence;
(11) the Incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business;
provided, however, that upon the drawing of such letters of credit, such
obligations are reimbursed within 30 days following such drawing;
(12) obligations arising from or representing deferred compensation to
employees of the Company or its Subsidiaries that constitute or are deemed
to be Indebtedness under GAAP and that are Incurred in the ordinary course
of business; or
(13) Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to the foregoing paragraph (a) or any other clause of this
paragraph (b)) in an aggregate principal amount on the date of Incurrence
that, when added to all other Indebtedness Incurred pursuant to this clause
(13) and then outstanding, will not exceed $5.0 million.
(c) Notwithstanding the foregoing, the Company may not Incur any
Indebtedness pursuant to paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to repay, prepay, redeem, defease, retire, refund or
refinance any Subordinated Obligations unless
53
such Indebtedness will be subordinated to the Securities to at least the same
extent as such Subordinated Obligations.
(d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as
a result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03:
(1) Indebtedness Incurred pursuant to the Credit Agreement prior to or
on the Closing Date shall be treated as Incurred pursuant to clause (1) of
paragraph (b) above,
(2) Indebtedness permitted by this Section 4.03 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 4.03 permitting such Indebtedness, and
(3) in the event that Indebtedness meets the criteria of more than one
of the types of Indebtedness described in this Section 4.03, the Company,
in its sole discretion, shall classify such Indebtedness and only be
required to include the amount of such Indebtedness in one of such clauses.
(e) In addition, the Company will not permit any of its Unrestricted
Subsidiaries to incur any Indebtedness other than Non-Recourse Debt (or issue
any shares of Disqualified Stock that is either mandatorily redeemable by the
Company or convertible or exchangeable for Indebtedness 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 clause
(e), the Company shall be in Default of this Section 4.03).
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to:
54
(1) declare or pay any dividend, make any distribution on or in
respect of its Capital Stock or make any similar payment (including any
payment in connection with any merger or consolidation involving the
Company or any Subsidiary of the Company) to the direct or indirect holders
of its Capital Stock, except (x) dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock or Preferred Stock) and
(y) dividends or distributions payable to the Company or a Restricted
Subsidiary (and, if such Restricted Subsidiary has shareholders other than
the Company or other Restricted Subsidiaries, to its other shareholders on
a pro rata basis),
(2) purchase, repurchase, redeem, retire or otherwise acquire for
value any Capital Stock of the Company or any Restricted Subsidiary held by
Persons other than the Company or a Restricted Subsidiary,
(3) purchase, repurchase, redeem, retire, defease or otherwise acquire
for value, prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment any Subordinated Obligations (other than the purchase,
repurchase, redemption, retirement, defeasance or other acquisition for
value of Subordinated Obligations acquired in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each
case due within one year of the date of acquisition), or
(4) make any Investment (other than a Permitted Investment) in any
Person;
(any such dividend, distribution, payment, purchase, redemption, repurchase,
defeasance, retirement, or other acquisition or Investment described in
clauses (1) through (4) above being herein referred to 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);
(B) after giving effect, on a pro forma basis, to such Restricted
Payment, the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(a); or
55
(C) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash,
shall be the Fair Market Value of the property or other non-cash
assets that constitute such Restricted Payment) declared or made
subsequent to the Closing Date would exceed the sum, without
duplication, of:
(i) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the
Closing Date occurs to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted Payment
(or, in case such Consolidated Net Income shall be a deficit, minus
100% of such deficit);
(ii) the aggregate Net Cash Proceeds received by the Company from
the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Closing Date (other than an issuance or sale
to (x) a Subsidiary of the Company or (y) an employee stock ownership
plan or other trust established by the Company or any of its
Subsidiaries);
(iii) 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 Closing Date of any Indebtedness of the Company or
its Restricted Subsidiaries issued after the Closing Date which is
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 other property distributed by the Company or any Restricted
Subsidiary upon such conversion or exchange); and
(iv) an amount equal to the sum of (x) the net reduction in any
Investments (excluding Permitted Investments, except as provided in
the next sentence) made by the Company or any Restricted Subsidiary in
any Person resulting
56
from repurchases, repayments or redemptions of such Investments by
such Person, net cash proceeds realized on the sale of such
Investment and net cash proceeds representing the return of capital
(excluding dividends and distributions), in each case received by
the Company or any Restricted Subsidiary, and (y) to the extent such
Person is an Unrestricted Subsidiary, the portion (proportionate to
the Company's equity interest in such Subsidiary) of the Fair Market
Value of the net assets of such Unrestricted Subsidiary if such
Unrestricted Subsidiary is designated a Restricted Subsidiary, with
such Fair Market Value measured at the time of any such designation;
provided, however, that the foregoing sum shall not exceed, in the
case of any such Person or Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments, except as provided in
the next sentence) previously made by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary and included in
the calculation of the amount of Restricted Payments.
After any designation of the Specified Subsidiary Group as Unrestricted
Subsidiaries in accordance with Section 4.13, the remaining Investment of the
Company and its Restricted Subsidiaries in the Specified Subsidiary Group
shall be included in the calculation of the amount available for Restricted
Payments as provided in clause (C) above as if it were not a Permitted
Investment; provided, that, if RRM is the Specified Subsidiary, such inclusion
shall only be made if at the time of such designation the amount available for
Restricted Payments under clause (C) above is greater than zero, in which case
the amount otherwise available for Restricted Payments shall be reduced by the
amount of such Investment but not below zero. For the avoidance of doubt, the
inclusion of the Investment in the Specified Subsidiary Group after
designation of the Specified Subsidiary Group as Unrestricted Subsidiaries
shall not be taken into account in determining whether the Company is
permitted to designate such Subsidiaries as Unrestricted Subsidiaries under
Section 4.13.
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
57
(1) any purchase, repurchase, redemption, retirement or other
acquisition for value of Capital Stock of the Company made by exchange for,
or out of the proceeds of the substantially concurrent sale of, Capital
Stock of the Company (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or other trust established by the Company or any of its
Subsidiaries); provided, however, that:
(A) such purchase, repurchase, redemption, retirement or other
acquisition for value will be excluded in the calculation of the
amount of Restricted Payments, and
(B) the Net Cash Proceeds from such sale applied in the manner
set forth in this clause (1) will be excluded from the calculation of
amounts under clause (4)(C)(ii) of paragraph (a) above;
(2) any prepayment, repayment, purchase, repurchase, redemption,
retirement, defeasance or other acquisition for value of Subordinated
Obligations of the Company made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Indebtedness of the Company that is
permitted to be Incurred pursuant to Section 4.03(b); provided, however,
that such prepayment, repayment, purchase, repurchase, redemption,
retirement, defeasance or other acquisition for value will be excluded in
the calculation of the amount of Restricted Payments;
(3) any prepayment, repayment, purchase, repurchase, redemption,
retirement, defeasance or other acquisition for value of Subordinated
Obligations from Net Available Cash to the extent permitted by Section
4.06; provided, however, that such prepayment, repayment, purchase,
repurchase, redemption, retirement, defeasance or other acquisition for
value will be excluded in the calculation of the amount of Restricted
Payments;
(4) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividends would have complied
with this Section 4.04; provided, however, that such dividends will be
58
included in the calculation of the amount of Restricted Payments;
(5) any purchase, repurchase, redemption, retirement or other
acquisition for value of shares of, or options to purchase shares of,
Capital Stock of the Company or any of its Subsidiaries from employees,
former employees, directors or former directors of the Company or any of
its Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such individuals
purchase or sell or are granted the option to purchase or sell, shares of
such Capital Stock; provided, however, that the aggregate amount of such
purchases, repurchases, redemptions, retirements and other acquisitions for
value will not exceed $2.0 million in any calendar year; provided further,
however, that such purchases, repurchases, redemptions, retirements and
other acquisitions for value shall be excluded in the calculation of the
amount of Restricted Payments;
(6) repurchases of Capital Stock deemed to occur upon exercise of
stock options if such Capital Stock represents a portion of the exercise
price of such options, and repurchases of Capital Stock of Subsidiaries
consisting of directors' qualifying shares or shares issued to third
parties in the ordinary course to the extent necessary to satisfy any
licensing requirements under applicable law with respect to the Company's
or any of its Subsidiary's business; provided, however, that such
Restricted Payments shall be excluded in the calculation of the amount of
Restricted Payments;
(7) cash payments in lieu of the issuance of fractional shares in
connection with the exercise of warrants, options or other securities
convertible into or exchangeable for Capital Stock of the Company;
provided, however, that any such cash payment shall not be for the purpose
of evading the limitation of this Section 4.04 (as determined in good faith
by the Board of Directors); provided further, however, that such payments
shall be included in the calculation of the amount of Restricted Payments;
59
(8) payments of intercompany subordinated Indebtedness, the Incurrence
of which was permitted under Section 4.03(b)(2); provided, however, that no
Default has occurred and is continuing or would otherwise result therefrom;
provided further, however, that such payments shall be excluded in the
calculation of the amount of Restricted Payment;
(9) a Qualifying Subsidiary Stock Distribution to the extent permitted
by Section 4.13; provided, however, that the amount of such distribution
shall not be included in the calculation of the amount of Restricted
Payments;
(10) the payment of cash dividends on the Capital Stock of the Company
in an amount not to exceed (x) $0.48 per share per fiscal year and (y) $7.0
million in the aggregate for such dividends in any fiscal year; provided
that, after a designation of the Specified Subsidiary Group as Unrestricted
Subsidiaries, no such dividend shall be declared or paid unless, for the
most recently ended four full fiscal quarters for which internal financial
statements are available preceding the date of declaration of any such
dividend or distribution after giving effect to such dividend or
distribution as a fixed charge on a pro forma basis, the Company and its
Restricted Subsidiaries would have had a Consolidated Fixed Charge Coverage
Ratio of at least 1.35 to 1; provided further that if (x) the Specified
Subsidiary is VHC, (y) the Specified Subsidiary Group has been designated
as Unrestricted Subsidiaries and (z) the Company may not otherwise pay such
dividends because of a failure to satisfy the Consolidated Fixed Charge
Coverage Ratio described in the preceding proviso, the Company may pay cash
dividends from cash proceeds of a Qualifying Subsidiary Stock Sale, in an
amount not to exceed $7.0 million; and provided further that dividends paid
under this clause (10) shall be included in the amount of Restricted
Payments;
(11) the payment of scheduled, quarterly cash dividends on the Chemed
Preferred Securities declared on or prior to December 31, 2004 in an amount
not to exceed $2.00 per share per year, and the redemption of the Chemed
Preferred Securities and the Subordinated Chemed Debentures at the
applicable scheduled redemption prices on or prior to December 31, 2004;
60
provided that such dividends and redemption amounts shall not be
included in the amount of Restricted Payments;
(12) dividends or distributions of Capital Stock subject to the
Closing Date Stock Award Plan, so long as the aggregate amount of such
dividends or distributions made pursuant to this clause 12 does not exceed
$2.8 million; provided, that such dividends or distributions shall be
excluded in the amount of Restricted Payments; and
(13) other Restricted Payments in an aggregate amount not to exceed
$5.0 million; provided, however, that such Restricted Payments shall be
included in the calculation of the amount of Restricted Payments.
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or 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;
(2) make any loans or advances to the Company; or
(3) transfer any of its property or assets to the Company, except:
(A) with respect to clauses (1), (2) or (3):
(i) any encumbrance or restriction pursuant to applicable law or
an agreement in effect at or entered into on the Closing Date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, in contemplation of, or to
61
provide all or any portion of the funds or credit support utilized to
consummate the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was otherwise acquired by the Company) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (i) or (ii) of this Section 4.05(3)(A)
or this clause (iii) or contained in any amendment to an agreement
referred to in clause (i) or (ii) of this Section 4.05(3)(A) or this
clause (iii); provided, however, that the encumbrances and
restrictions contained in any such Refinancing agreement or amendment,
taken as a whole, are not materially more disadvantageous to the
Holders than the encumbrances and restrictions contained in such
predecessor agreements (as determined by the Company in good faith);
(iv) any encumbrance or restriction contained in the terms of any
Indebtedness Incurred pursuant to Section 4.03(b)(9) or any agreement
pursuant to which such Indebtedness was Incurred; provided, however
that the encumbrances and restrictions contained in such Indebtedness,
taken as a whole, are not materially more disadvantageous to the
holders of the Securities than the encumbrances and restrictions
contained in the agreements for the Indebtedness being repaid (as
determined by the Company in good faith);
(v) with respect to a Restricted Subsidiary, any encumbrance or
restriction imposed pursuant to an agreement entered into in
connection with the sale or disposition of all or substantially all
the Capital Stock or assets of such Restricted Subsidiary or in
addition, in the case of the Specified Subsidiary Group, any
encumbrance or restriction imposed pursuant to a purchase and sale,
underwriting or other disposition agreement in connection with a
Qualifying Subsidiary Stock Sale or Qualifying Subsidiary Stock
Distribution; provided that in
62
any such case such encumbrance or restriction is in effect only for
the period pending the closing of such sale, disposition or
distribution; and
(B) in the case of clause (3), any encumbrance or restriction
(i) 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
(ii) contained in security agreements securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or restriction
restricts the transfer of the property subject to such security
agreements.
SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)
The Company will not, and will not permit any Restricted Subsidiary to, make any
Asset Disposition unless:
(1) the Company or such Restricted Subsidiary receives
consideration (including by way of relief from, or by any other Person
assuming sole responsibility for, any liabilities, contingent or
otherwise) at the time of such Asset Disposition at least equal to the
Fair Market Value of the shares and assets subject to such Asset
Disposition,
(2) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary 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 elects (or is required
by the terms of any Indebtedness), to prepay, repay, purchase,
repurchase, redeem, retire, defease or otherwise acquire for
value Senior Indebtedness of the Company or Indebtedness (other
than obligations in respect of Preferred Stock) of a Restricted
Subsidiary (in each case other than Indebtedness
63
owed to the Company or an Affiliate of the Company
and other than obligations in respect of Disqualified Stock)
within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash;
(B) second, to the extent of the balance of Net Available
Cash after application in accordance with clause (A), to the
extent the Company or such Restricted Subsidiary elects, to
reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with
Net Available Cash received by the Company or another Restricted
Subsidiary) within one year from the later of such Asset
Disposition or the receipt of such Net Available Cash;
(C) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A)
and (B), to make an Offer (as defined in Section 4.06(b)) to
purchase Securities pursuant to and subject to the conditions set
forth in Section 4.06(b); provided, however, that if the Company
so elects (or is required by the terms of any other Senior
Indebtedness), such Offer may be made ratably to purchase the
Securities and other Senior Indebtedness of the Company; and
(D) fourth, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A),
(B) and (C), for any general corporate purpose permitted by the
terms of the Indenture;
provided, however that in connection with any prepayment,
repayment, purchase, repurchase, redemption, retirement,
defeasance or other acquisition for value of Indebtedness
pursuant to clause (A) or (C) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will
cause the related loan commitment (if any) to be permanently
reduced in an amount equal to the principal amount so prepaid,
repaid, purchased, repurchased, redeemed, retired, defeased or
otherwise acquired for value.
64
Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Subsidiaries will not be required to apply any Net
Available Cash in accordance with this Section 4.06(a) except to the extent that
the aggregate Net Available Cash from all Asset Dispositions that is not
otherwise applied in accordance with this Section 4.06(a) exceeds (i) $25.0
million, in the case of Net Available Cash that constitutes Net Cash Proceeds
from Qualifying Subsidiary Stock Sales (not including the initial Qualifying
Subsidiary Stock Sale) or (ii) $5.0 million, in the case of Net Available Cash
from all other Asset Dispositions.
For the purposes of this Section 4.06, the following are deemed to be
cash or cash equivalents:
(x) the assumption of Indebtedness of the Company (other
than obligations in respect of Disqualified Stock of the Company)
or any Restricted Subsidiary and the release of the Company or
such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition and
(y) securities received by the Company or any Restricted
Subsidiary from the transferee that within 90 days are converted
by the Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 4.06(a)(3)(C), the Company shall be required
(i) to purchase Securities tendered pursuant to an offer by the Company for
the Securities (the "Offer") at a purchase price of 100% of their principal
amount plus accrued and unpaid interest to the date of purchase (subject to
the right of Holders of record on the relevant date to receive interest due
on the relevant Interest Payment Date) in accordance with the procedures
(including prorating in the event of oversubscription), set forth in
Section 4.06(c) and (ii) to purchase other Senior Indebtedness of the
Company on the terms and to the extent contemplated thereby (provided that
in no event shall the Company offer to purchase such other Senior
Indebtedness of the Company at a purchase price in excess of 100% of its
principal amount (without premium), plus accrued and unpaid interest
thereon). If the aggregate purchase price of Securities (and other Senior
Indebtedness) tendered pursuant to the
65
Offer is less than the Net Available Cash allotted to the purchase of the
Securities (and other Senior Indebtedness), the Company will apply the
remaining Net Available Cash in accordance with Section 4.06(a)(3)(D). The
Company will not be required to make an Offer for Securities (and other Senior
Indebtedness) pursuant to this Section 4.06 if the Net Available Cash
available therefor (after application of the proceeds as provided in clauses
(A) and (B) of Section 4.06(a)(3)) is less than $5.0 million for any
particular Asset Disposition or related series of Asset Dispositions (which
lesser amount will be carried forward for purposes of determining whether an
Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition). Upon completion of such an offer to purchase, Net
Available Cash will be deemed to be reduced by the aggregate amount of such
offer.
(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as described in Section 4.06(b) in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain such information concerning the business
of the Company which the Company in good faith believes will enable such Holders
to make an informed decision (which at a minimum will include (A) the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company, the most recent subsequently filed
Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the Company
filed subsequent to such Quarterly Report, other than Current Reports describing
Asset Dispositions otherwise described in the offering materials (or
corresponding successor reports), (B) a description of material developments in
the Company's business subsequent to the date of the latest of such Reports, and
(C) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Securities pursuant to the Offer,
together with the information contained in clause (3) of this Section 4.06(c).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to
the Trustee an Officers' Certificate as to (A) the amount of the Offer (the
"Offer Amount"), including information as to any other Senior Indebtedness
included in the Offer, (B) the allocation of the Net Available Cash from
the Asset Dispositions pursuant to which such Offer is being made and (C)
the compliance of such allocation with the provisions of Section 4.06(a)
and (b). On such date, the Company shall also irrevocably 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) in Temporary Cash Investments,
maturing on the last day prior to the Purchase Date or on the Purchase Date
if funds are immediately available by open of business, an amount equal to
the Offer Amount to be held for payment in accordance with the provisions
of this Section. If the Offer includes other Senior Indebtedness, the
deposit described in the preceding sentence may be made with any other
paying agent pursuant to arrangements satisfactory to the Trustee. Upon the
expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are
to be accepted by the Company. The Trustee shall, on the Purchase Date,
mail or deliver payment (or cause the delivery of payment) to each
tendering Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the Offer Amount applicable to the Securities, the
Trustee shall deliver the excess to the Company immediately after the
expiration of the Offer Period for application in accordance with this
Section 4.06.
(3) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business
Day prior to the Purchase Date, a telex,
67
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have
such Security purchased. Holders whose Securities are purchased only in
part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by
the Company pursuant to and in accordance with the terms of this Section. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor
to the surrendering Holder.
(d) 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. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.
SECTION 4.07. LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of related
transactions (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 such transaction is on terms that:
(1) are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be obtained 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 an aggregate
amount in excess of $5.0 million,
68
(A) are set forth in writing, and
(B) have been approved by a majority of the members of the Board
of Directors and by a majority of the members of such Board of
Directors 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 an amount in
excess of $20.0 million, have been determined by a nationally recognized
appraisal or investment banking firm to be fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries or is not less
favorable to the Company and its Restricted Subsidiaries than could
reasonably be expected to be obtained at the time in an arms length
transaction with a Person who is not an Affiliate.
(b) The provisions of the foregoing paragraph (a) will not prohibit:
(1) any Investment or other Restricted Payment permitted to be made
pursuant to Section 4.04,
(2) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans approved by the Board
of Directors,
(3) the grant of stock options 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 in the ordinary course of business
of the Company or its Restricted Subsidiaries and consistent with prudent
practices and applicable law, not to exceed $2.0 million outstanding at any
one time,
(5) the payment of reasonable and customary fees, compensation or
employee benefit arrangements to and any indemnity provided for the benefit
of
69
directors, officers or employees of the Company and its Subsidiaries in the
ordinary course of business,
(6) any transaction with a Restricted Subsidiary which would
constitute an Affiliate Transaction solely because the Company or a
Restricted Subsidiary owns an equity interest in, or otherwise controls,
such Restricted Subsidiary,
(7) transactions reasonably contemplated by any Customary Transition
Agreement,
(8) the Transactions, or
(9) the making of severance payments to directors, officers or
employees of Vitas that are required pursuant to arrangements in effect
prior to the date that the Company acquired Vitas, in an aggregate amount
not to exceed $14.5 million (which arrangements may be modified so long as
such aggregate amount is not exceeded).
SECTION 4.08. LIMITATION ON LINES OF BUSINESS. The Company shall not,
and shall not permit any Restricted Subsidiary to, engage in any business other
than a Permitted Business.
SECTION 4.09. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company will not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary to any Person (other than the
Company or a Wholly Owned Subsidiary), and will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell or otherwise dispose of any
shares of its Capital Stock (other than directors' qualifying shares or shares
issued to third parties in the ordinary course to the extent necessary to
satisfy any licensing requirements under applicable law with respect to the
Company's or any of its Subsidiary's business) to any Person (other than the
Company or a Wholly Owned Subsidiary), except, in each case, with respect to
dispositions in connection with a Qualifying Subsidiary Stock Sale or Qualifying
Subsidiary Stock Distribution; provided, however, that the foregoing shall not
prohibit any such issuance, sale or disposition if:
(1) immediately after giving effect to such issuance, sale or other
disposition, neither the
70
Company nor any of its Restricted Subsidiaries owns any Capital Stock of
such Restricted Subsidiary; or
(2) immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto
would have been permitted to be made under Section 4.04 if made on the date
of such issuance, sale or other disposition (and such Investment shall be
deemed to be an Investment for the purposes of Section 4.04 as of the
effective date of the applicable transaction).
The proceeds of any sale of such Capital Stock permitted under clause
(1) or (2) above will be treated as Net Available Cash from an Asset Disposition
and must be applied in accordance with the terms of Section 4.06.
For avoidance of doubt, the Company will not be permitted to issue,
directly or indirectly, any of its Capital Stock that is exchangeable or
convertible, with or without conditions, into any Capital Stock of any
Restricted Subsidiary without complying with this Section 4.09.
SECTION 4.10. CHANGE OF CONTROL. (a) Upon the occurrence of a Change
of Control, each Holder shall have the right to require that the Company
purchase all or any part of such Holder's Securities at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to, but excluding, the date of purchase (subject to the right of holders
of record on the relevant record date to receive interest on the relevant
interest payment date), in accordance with the terms contemplated in Section
4.10(b); provided, however, that notwithstanding the occurrence of a Change of
Control, the Company shall not be obligated to purchase the Securities pursuant
to this section in the event that it has exercised its right to redeem all the
Securities under the terms of paragraph 5 of the Securities.
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:
71
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase all or any part of such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof on the date of purchase, plus accrued and 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 on the relevant interest
payment date);
(2) the circumstances and relevant facts and financial information
regarding such Change of Control;
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company, consistent with
this Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, the
Company shall not be required to make a Change of Control Offer following 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 Section applicable to a
72
Change of Control Offer made by the Company and purchases all Securities
validly tendered and not withdrawn under such Change of Control Offer.
(f) 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. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.
SECTION 4.11. LIMITATION ON LIENS. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit
to exist any Lien (the "Initial Lien") of any nature whatsoever on any of its
property or assets (including Capital Stock of a Restricted Subsidiary, but
excluding Capital Stock of an Unrestricted Subsidiary), whether owned at the
Closing Date or thereafter acquired, other than Permitted Liens, without
effectively providing that the Securities shall be secured equally and ratably
with (or prior to) the obligations so secured for so long as such obligations
are so secured. Any Lien created for the benefit of the Holders of the
Securities pursuant to the foregoing sentence shall provide by its terms that
such Lien shall be automatically and unconditionally released and discharged
upon the release and discharge of the Initial Lien.
SECTION 4.12. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless:
(1) the Company or such Restricted Subsidiary would be entitled to:
(A) Incur Indebtedness in an amount equal to the Attributable
Debt with respect to such Sale/Leaseback Transaction pursuant to
Section 4.03; and
(B) create a Lien on such property securing such Attributable
Debt without equally and
73
ratably securing the Securities pursuant to Section 4.11,
(2) the net proceeds received by the Company or such Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are at least
equal to the Fair Market Value of such property and
(3) the transfer of such property is permitted by, and the Company
applies the proceeds of such transaction in compliance with Section 4.06.
SECTION 4.13. LIMITATION ON DESIGNATION OF SUBSIDIARIES AS
UNRESTRICTED SUBSIDIARIES. (a) Except as set forth below, the Company shall not
designate any Subsidiary as an Unrestricted Subsidiary at any time; provided,
however, that the Company may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary if:
(1) such Subsidiary and its Subsidiaries do not own any Capital Stock
or Indebtedness of, and do not own or hold any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of
the Subsidiary to be so designated, and either:
(2) (A) with respect to the Specified Subsidiary Group, such
designation is permitted under clause (b) below; or
(B) with respect to any other Subsidiary, the Subsidiary to be so
designated has total Consolidated assets of $1,000 or less, or if such
Subsidiary has Consolidated assets greater than $1,000, then such
designation would be permitted under Section 4.04, with the aggregate
Fair Market Value of all outstanding Investments owned by the Company
and its Restricted Subsidiaries in the Subsidiary so designated will
be deemed to be an Investment made as of the time of such designation
and either reducing the amount available for Restricted Payments under
Section 4.04(a)(4)(C)(iv) or reducing the amount available for future
Investments under one or more clauses of the definition of Permitted
Investments, as the Company shall determine.
74
(b) (1) The Company may designate all Subsidiaries that constitute
part of the Specified Subsidiary Group as Unrestricted Subsidiaries for all
purposes under the Indenture except as set forth below in clause (b)(2) below at
any time after or in connection with a Qualifying Subsidiary Stock Sale or a
Qualifying Subsidiary Stock Distribution if at such time, after giving effect
thereto and to any transactions (including any refinancings of Indebtedness)
occurring concurrently with such designation, the criteria in clause (a)(1)
above is satisfied and the following additional conditions are met:
(A) the Adjusted Consolidated Leverage Ratio shall be not more
than (x) 5.0 to 1 if the Specified Subsidiary is VHC and (y) 4.0 to 1
if the Specified Subsidiary is RRM;
(B) no Default has occurred and is continuing;
(C) 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;
(D) 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;
(E) such Subsidiary is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation:
(i) to subscribe for additional Capital Stock of such Person; or
(ii) to maintain or preserve such Person's financial condition or
to cause such Person to achieve any specified levels of operating
results; and
(F) on the date such Subsidiary is designated an Unrestricted
Subsidiary any agreement or transaction between such Subsidiary
75
and the Company or any Restricted Subsidiary is permitted under
Section 4.07.
For the avoidance of doubt, the designation of the Specified
Subsidiary Group as Unrestricted Subsidiaries shall not require compliance with
Section 4.04 with respect to the Investment of the Company and its Restricted
Subsidiaries in the Specified Subsidiary Group at the time of designation, but
such Investment shall be included in the calculation of the amount available for
Restricted Payments thereafter as provided in Section 4.04.
(2) The Company shall not be entitled to revoke the designation of the
Specified Subsidiary Group as Unrestricted Subsidiaries after its
effectiveness. Immediately upon the effectiveness of such designation and
for all purposes thereafter under the Indenture, the covenants, events of
defaults and other terms of the Indenture applicable to the Restricted
Subsidiaries of the Company will not apply to the Specified Subsidiary
Group except as follows:
(A) Section 4.04 will continue to apply to the making by the
Company or any Restricted Subsidiary of any dividend, distribution or
any similar payment to the holders of its Capital Stock that is
payable in the Capital Stock of VHC, and
(B) Section 4.06 will continue to apply, to the extent provided
therein, to any Asset Disposition by the Company or any Restricted
Subsidiary of any Capital Stock of VHC or its Subsidiaries.
(c) The Company shall have the right, on one occasion at any time, to
designate either (but not both) of VHC or RRM as the "Specified Subsidiary".
Such designation shall be made by action of the Board of Directors and shall be
effective upon notification in writing to the Trustee. The designation of VHC or
RRM as the Specified Subsidiary may be made at any time prior to designating the
Specified Subsidiary Group as Unrestricted Subsidiaries, and it shall not
obligate the Company thereafter to designate the Specified Subsidiary Group as
Unrestricted Subsidiaries; provided that the designation of the Specified
Subsidiary shall be irrevocable and must be
76
made prior to or concurrently with the designation of the Specified Subsidiary
Group as Unrestricted Subsidiaries.
(d) The Board of Directors may designate any Unrestricted Subsidiary
(other than a member of the Specified Subsidiary Group that has been designated
an Unrestricted Subsidiary) to be a Restricted Subsidiary; provided, however,
that:
(x) such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if such Indebtedness is permitted
under Section 4.03, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter
reference period; and
(y) immediately after giving effect to such designation, no
Default shall have occurred and be continuing.
(e) Any designation of a Subsidiary as a Restricted Subsidiary or
Unrestricted Subsidiary, any designation of the Specified Subsidiary, and any
designation of the Specified Subsidiary Group as Unrestricted Subsidiaries shall
be made by the Board of Directors, shall be evidenced to the Trustee by promptly
filing with the Trustee a copy of the resolution of the Board of Directors
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions, and shall be effective
upon such filing.
SECTION 4.14. RATINGS. As promptly as reasonably practicable after the
Closing Date, the Company will use its reasonable efforts to obtain a rating of
the Securities from either Standard & Poor's Ratings Group, Inc. or Xxxxx'x
Investors Service, Inc.
SECTION 4.15. 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 and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate
77
shall describe the Default, its status and what action the Company is taking
or proposes to take with respect thereto. The Company also shall comply with
TIA ss. 314(a)(4).
SECTION 4.16. 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.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. (a) 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 Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) shall expressly assume, by an
indenture supplemental hereto, 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 pro forma effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary 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 shall have occurred and be continuing;
(3) immediately after giving pro forma effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a);
(4) immediately after giving pro forma effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that is
not less than the Consolidated Net Worth of the Company immediately prior
to such transaction; (or, in the
78
event that, concurrently with such merger or consolidation, the Specified
Subsidiary Group is designated as Unrestricted Subsidiaries in accordance
with and subject to Section 4.13, the Successor Company will have
Consolidated Net Worth in an amount which is not less than the Consolidated
Net Worth of the Company, excluding the Specified Subsidiary Group,
immediately prior to such transaction); and
(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.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, and the
predecessor Company, except in the case of a lease, shall be released from the
obligation to pay the principal of and interest on the Securities.
Notwithstanding the foregoing:
(A) any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company; and
(B) the Company may merge with an Affiliate incorporated solely
for the purpose of reincorporating the Company in another jurisdiction
to realize tax or other benefits; and
(C) nothing herein shall limit any conveyance, transfer or lease
of assets between or among any of the Company and its Restricted
Subsidiaries.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
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(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company (A) defaults in the payment of principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon declaration of acceleration or otherwise, or (B)
fails to purchase Securities when required pursuant to this Indenture or
the Securities;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 or 4.14 (other than a
failure to purchase Securities when required under Section 4.06 or 4.10)
and such failure continues for 60 days after the notice specified below;
(5) the Company fails to comply with any covenant set forth in the
Securities or this Indenture (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 90 days after the
notice specified below;
(6) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or
its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
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(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days; or
(9) any judgment or decree for the payment of money in excess of $5.0
million or its foreign currency equivalent at the time is entered against
the Company or any Significant Subsidiary if:
(A) an enforcement proceeding thereon is commenced by any
creditor or
(B) such judgment or decree remains outstanding for a period of
60 days following such judgment or decree and is not discharged,
waived or stayed (the "judgment default provision").
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.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any
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receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A Default under clause (4), (5) or (6) is not an Event of Default
until the Trustee or the holders of at least 25% 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 clause (4), (5) or (6) 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 the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice or the lapse of time would become an
Event of Default under clause (4), (5) or (6), its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) 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 declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest and any premium on the Securities shall
be due and payable immediately. If an Event of Default specified in Section
6.01(7) or (8) with respect to the Company occurs, the principal of and interest
on all the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in principal amount of the
outstanding Securities by notice to the Trustee may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of
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or interest or premium 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 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security, (b) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(c) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.05. 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 or this Indenture or,
subject to Section 7.01, 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 6.06. LIMITATION ON SUITS. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue
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any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the outstanding
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee reasonable security or indemnity
against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during 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 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and 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 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) 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
7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
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allowed in any judicial proceedings relative to the Company, its creditors or
its property 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 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 7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal 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
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litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
principal amount of the Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. 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.
(b) Except during the continuance of an Event of Default:
(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 or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to
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determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
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 6.05.
(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.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be
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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 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 the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, 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 to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. 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 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the 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 the 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.
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SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within the earlier of 90 days after it
occurs or 30 days after it is known to a Trust Officer or written notice of it
is received by the Trustee. Except in the case of a Default in payment of
principal of or interest on any Security (including payments pursuant to the
redemption provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each February 15 beginning with the February 15 following the
date of this Indenture, and in any event prior to May 15 in each year, the
Trustee shall mail to each Securityholder a brief report dated as of February 15
that complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss.
313(b).
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 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. 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, 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 or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. 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 may have separate counsel and the Company
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shall pay the fees and expenses of such counsel. The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.
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 Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. 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, 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 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 7.07.
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
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
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 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. 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
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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 ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 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 ss.
310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. (a)
When (1) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. 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 and at
the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations
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under the Securities and this Indenture ("legal defeasance option") or (2) its
obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13 and 4.14 and the operation of Sections 6.01(3),
6.01(4), 6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) and
the limitations contained in Sections 5.01(a)(3) and (4) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Section 6.01(3), 6.01(4), 6.01(5), 6.01(6), 6.01(7), 6.01(8) or 6.01(9) (but, in
the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) or because of the failure of the Company to comply with Section
5.01(a)(3) or (4).
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 clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. 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 money
or U.S. Government Obligations, the principal of and interest on which will
be sufficient, or a combination thereof sufficient, to pay the principal of
and premium (if any) and interest on the Securities to maturity or
redemption, as the case may be;
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(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) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel 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;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (B) 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 defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same
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manner and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(8) 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 as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. 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.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
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 or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
SECTION 8.05. INDEMNITY FOR 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 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 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
95
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 8
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 8;
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 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company 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 5 and to provide for the assumption by a
successor corporation of the obligations 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 secure the
Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA;
96
(7) to make any change that does not adversely affect the rights of
any Securityholder; or
(8) to provide for the issuance of the Exchange Securities or
Additional Securities, which shall have terms substantially identical in
all material respects to the Initial Securities (except that the transfer
restrictions contained in the Initial Securities shall be modified or
eliminated , as appropriate), and which shall be treated, together with any
outstanding Initial Securities, as a single issue of securities.
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 9.02. WITH CONSENT OF HOLDERS. The Company 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 consents obtained in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Securityholder affected thereby, an amendment or waiver may
not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed pursuant to paragraph
5 of the Securities;
(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 principal of
and interest or any premium on
97
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 in Section 6.04 or 6.07 or the second sentence of
this Section; or
(8) waive (A) any Default or Event of Default in the payment of the
principal or interest on a Security or (B) a Default arising from the
failure to redeem or purchase any Security when required pursuant to this
Indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
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 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. 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 becomes effective upon the execution of such amendment or waiver by the
Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the
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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 be valid or effective for more than 120 days after such
record date.
SECTION 9.05. 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 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) 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 10
MISCELLANEOUS
SECTION 10.01. 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 required provision
shall control.
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SECTION 10.02. 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:
Roto-Rooter, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
if to the Trustee:
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx
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 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 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 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 ss. 312(c).
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or refrain
from taking
100
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 10.05. 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;
(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.
SECTION 10.06. 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
101
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 10.07. 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 10.08. LEGAL HOLIDAYS. 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 10.09. GOVERNING LAW. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 10.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture 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 10.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 10.12. 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.
SECTION 10.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of
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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.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ROTO-ROOTER, INC.,
By
/s/ Xxxxx X. XxXxxxxx
-------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief Executive Officer
LASALLE BANK NATIONAL ASSOCIATION
By
/s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
APPENDIX
CERTAIN PROVISIONS RELATING TO SECURITIES
1. Definitions
1.1 DEFINITIONS
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Accredited Investor" has the meaning assigned to such term in
Regulation D.
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Securities" means (1) the 8 3/4% Senior Notes Due 2011
issued pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to a Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"Initial Holders" means (1) with respect to the Initial Securities
issued on the Issue Date, the purchasers thereof, as set forth in the Purchase
Agreements, and (2) with respect to each issuance of Additional Securities, the
Persons purchasing such Additional Securities under the related Purchase
Agreements.
"Initial Securities" means (1) $150.0 million aggregate principal
amount of 8 3/4% Senior Notes Due 2011 issued on the Issue Date and (2)
Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
"Purchase Agreement" means (1) with respect to the Initial Securities
issued on the Issue Date, each Purchase Agreement dated February 24, 2004, among
the Company, the Subsidiary Guarantors and an Initial Holder, and (2) with
respect to each issuance of Additional Securities, each purchase agreement or
underwriting agreement among the Company and the Persons purchasing such
Additional Securities.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement,
2
to certain Holders of Initial Securities, to issue and deliver to such Holders,
in exchange for the Initial Securities, a like aggregate principal amount of
Exchange Securities registered under the Securities Act.
"Registration Rights Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement dated
February 24, 2004, among the Company and the Initial Holders and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Securities" means the Initial Securities and the Exchange Securities,
treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Securities
pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.
1.2 OTHER DEFINITIONS
Defined in
Term Section:
---- ----------
"Agent Members"..................................................... 2.1(b)
"Global Security"................................................... 2.1(a)
"Regulation D"...................................................... 2.1(a)
"Restricted Global Security"........................................ 2.1(a)
2. THE SECURITIES.
2.1. (a) FORM AND DATING. Initial Securities offered and sold to an
accredited investor in reliance on
3
Section 4(2) of the Securities Act ("Section 4(2)") and/or Regulation D under
the Securities Act ("Regulation D"), in each case as provided in a Purchase
Agreement, shall be issued initially in the form of one or more permanent global
Securities in definitive, fully registered form without interest coupons with
the global securities legend and restricted securities legend set forth in
Exhibit 1 hereto (each, a "Restricted Global Security"), which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Trustee, at its principal corporate trust office, as custodian
for the Depository (or with such other custodian as the Depository may direct),
and registered in the name of the Depository or a nominee of the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided. Exchange
Securities shall be issued in global form (with the global securities legend set
forth in Exhibit 1 hereto) or in certificated form at the option of the Holders
thereof from time to time. Exchange Securities issued in global form and
Restricted Global Securities are sometimes referred to in this Appendix as
"Global Securities".
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever.
4
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) CERTIFICATED SECURITIES. Except as provided in this Section 2.1 or
Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.
2.2. AUTHENTICATION. The Trustee shall authenticate and deliver: (1)
on the Issue Date, an aggregate principal amount of $150.0 million 8 3/4% Senior
Notes Due 2011, (2) any Additional Securities for an original issue in an
aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities for issue
only in a Registered Exchange Offer, pursuant to the Registration Rights
Agreement, for a like principal amount of Initial Securities, 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. Such
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, in
the case of any issuance of Additional Securities pursuant to Section 2.13 of
the Indenture, shall certify that such issuance is in compliance with Section
4.03 of the Indenture. The aggregate principal amount of Securities outstanding
at any time shall not exceed $300.0 million except as provided in Section 2.07
of the Indenture.
2.3 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(1) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository,
in accordance with the Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver
5
to the Registrar a written order given in accordance with the Depository's
procedures containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the Global Security. The
Registrar shall, in accordance with such instructions instruct the Depository to
credit to the account of the Person specified in such instructions a beneficial
interest in the Global Security and to debit the account of the Person making
the transfer the beneficial interest in the Global Security being transferred.
(2) Notwithstanding any other provisions of this Appendix (other than
the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(3) In the event that a Restricted Global Security is exchanged for
Securities in certificated registered form pursuant to Section 2.4 of this
Appendix, prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such transfers
comply with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(b) LEGEND.
(1) Except as permitted by the following paragraphs (2), (3) and (4),
each Security certificate evidencing the Restricted Global Securities (and
all Securities issued in exchange therefor or in substitution thereof)
shall bear a legend in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT
6
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS
HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE l44A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE ISSUER THEREOF, (II) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE),
(IV) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER
JURISDICTIONS OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE.
(2) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Restricted
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of such
Transfer Restricted Security, if the
7
transferor thereof certifies in writing to the Registrar that such sale or
transfer was made in reliance on Rule 144 (such certification to be in the
form set forth on the reverse of the Security).
(3) After a transfer of any Initial Securities pursuant to and during
the period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Securities, all requirements pertaining to legends
on such Initial Security will cease to apply, the requirements requiring
any such Initial Security issued to certain Holders be issued in global
form will cease to apply, and a certificated Initial Security or an Initial
Security in global form, in each case without restrictive transfer legends,
will be available to the transferee of the Holder of such Initial
Securities upon exchange of such transferring Holder's certificated Initial
Security or directions to transfer such Holder's interest in the Global
Security, as applicable.
(4) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in
global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Exchange
Securities in certificated or global form will be available to Holders that
exchange such Initial Securities in such Registered Exchange Offer.
(c) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as all
beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
purchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
8
(d) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF SECURITIES.
(1) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities
and Global Securities at the Registrar's or co-registrar's request.
(2) No service charge shall be made 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 charge payable upon exchange or transfer pursuant to
Sections 3.06, 4.10 and 9.05 of the Indenture).
(3) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of any Security for a period beginning 15
Business Days before the mailing of a notice of an offer to repurchase or
redeem Securities or 15 Business Days before an interest payment date.
(4) Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-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, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(5) All Securities issued upon any transfer or exchange pursuant to
the terms of the 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.
(e) OBLIGATION OF THE TRUSTEE.
9
(1) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depository or other Person with respect to the accuracy of the records of
the Depository 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 the Depository) of any notice (including any notice of
redemption) or the payment of any amount, 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 under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depository or its nominee in the case of a Global Security). The rights
of beneficial owners in any Global Security shall be exercised only through
the Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its members,
participants and any beneficial owners.
(2) 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
Depository 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.
2.4 CERTIFICATED SECURITIES.
(a) A Restricted Global Security deposited with the Depository or with
the Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for
10
such Global Security, only if such transfer complies with Section 2.3 and (1)
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for such Restricted Global Security or if at any time such
Depository ceases to be a "clearing agency" registered under the Exchange Act
and a successor depositary is not appointed by the Company within 90 days of
such notice, or (2) an Event of Default has occurred and is continuing or (3)
the Company, in its sole discretion, notifies the Trustee in writing that it
elects to cause the issuance of certificated Securities under this Indenture.
(b) Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global
Security, an equal aggregate principal amount of certificated Initial Securities
of authorized denominations. Any portion of a Restricted Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security delivered in exchange for an interest in the
Restricted Global Security shall, except as otherwise provided by Section
2.3(b), bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered Holder
of a Global Security shall be entitled to 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.
(d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Company shall promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 1
to the Appendix
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
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
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, 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.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE l44A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE ISSUER
THEREOF, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
2
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO AN INSTITUTIONAL ACCREDITED INVESTOR
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF THE STATES AND OTHER JURISDICTIONS OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
3
No.____________ $ _______
8 3/4% Senior Notes Due 2011
Roto-Rooter, Inc., a Delaware corporation, promises to pay to
________________, or registered assigns, the principal sum of _____________
____________Dollars on February 24, 2011.
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.
Dated:
ROTO-ROOTER, INC.
By
--------------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE BANK NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
----------------------------------------
Authorized Signatory
4
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
8 3/4% Senior Note Due 2011
1. INTEREST
Roto-Rooter, 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; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.25% per annum
for the first 90 days following a Registration Default, at a per annum rate of
0.50% for the second 90 days following a Registration Default, at a per annum
rate of 0.75% for the third 90 days following a Registration Default and at a
per annum rate of 1.0% thereafter from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. The Company will pay interest
semiannually on February 15 and August 15 of each year, commencing August 15,
2004. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from February 24, 2004.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal at the rate borne by
this Security plus 1.0% per annum, and it will pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the February 1 or August 1 next preceding the interest payment
date even if Securities are canceled 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 the Securities
represented by a Global Security (including principal,
5
premium and interest) will be made by wire transfer of immediately available
funds to the accounts specified by The Depository Trust Company. The Company
will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
will be made 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 30 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, LaSalle Bank National Association, a [ ] banking
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
February 24, 2004 ("Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture 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 obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
6
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; issue or sell capital stock of
subsidiaries; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; restrict dividends or other payments of subsidiaries;
consolidate, merge or transfer all or substantially all of its assets and the
assets of its subsidiaries; and engage in sale/leaseback transactions. These
covenants are subject to important exceptions and qualifications.
5. OPTIONAL REDEMPTION
Except as set forth below, the Company shall not be entitled to redeem
the Securities.
On and after February 24, 2007, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' prior notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued and unpaid
interest to, but excluding, the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest, if any, due on the
relevant interest payment date), if redeemed during the 12-month period
commencing on February 24 of the years set forth below:
Redemption
Year Price
---- ----------
2007 104.375%
2008 102.917%
2009 101.458%
2010 and thereafter 100.000%
In addition, prior to February 24, 2007, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued on not less than 30 nor more
than 60 days' prior notice, at a redemption price (expressed as a percentage of
principal amount) of 108.750%, plus accrued and unpaid interest to, but
excluding, the redemption date
7
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), with the Net Cash
Proceeds from one or more Equity Offerings by the Company or Qualifying
Subsidiary Stock Sales; provided, however, that (1) at least 65% of such
aggregate principal amount of Securities (which includes Additional Securities,
if any) remains outstanding immediately after the occurrence of each such
redemption (other than Securities held, directly or indirectly, by the Company
or its Affiliates); and (2) each such redemption occurs within 60 days after the
date of the related Equity Offering or Qualifying Subsidiary Stock Sale, as the
case may be.
Prior to February 24, 2007, the Company shall be entitled at its
option to redeem all, but not less than all, of the Securities at a redemption
price equal to 100% of the principal amount of the Securities plus the
Applicable Premium as of, and accrued and unpaid interest to, the redemption
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date). The Company shall cause
notice of such redemption to be mailed by first-class mail to each Holder's
registered address, not less than 30 nor more than 60 days prior to the
redemption date. Any notice to Holders of such a redemption must include the
appropriate calculation of the redemption price, but does not need to include
the redemption price itself. The actual redemption price must be set forth in an
Officers' Certificate delivered to the Trustee no later than two Business Days
prior to the redemption date.
"Applicable Premium" means, with respect to any Security on any
redemption date, the excess (but not less than zero) of (i) the present value at
such redemption date of all remaining scheduled payments of interest (excluding
accrued interest) and principal on such Security (discounted at the equivalent
of the on Treasury Rate plus 50 basis points over (ii) the then outstanding
principal amount of such Security.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the date fixed
for redemption (or, if such Statistical Release is no longer
8
published, any publicly available source of similar market data)) most nearly
equal to the then remaining average life to February 24, 2007, provided,
however, that if the average life to February 24, 2007 of the Securities is not
equal to the constant maturity of a United States Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the average life to February 24, 2007, of the Securities
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
Any notice of redemption may provide that the redemption will be
subject to specified conditions, provided that such conditions are not solely
within the Company's control.
7. PUT PROVISIONS
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 repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued and unpaid interest to, but excluding,
the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
9
8. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of $1,000 principal amount 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 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) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an 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. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time shall be
entitled to 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, the principal of and interest on which will be sufficient, or a
combination thereof sufficient, to pay the principal of and premium (if any) and
interest on the Securities to maturity or redemption, as the case may be.
12. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (1) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least
10
a majority in principal amount outstanding of the Securities and (2) any default
or noncompliance with any provision may be waived with the written consent of
the Holders of a majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee shall be entitled to amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 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 or to secure the Securities,
or to add additional covenants 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.
13. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon optional redemption, upon declaration of
acceleration or otherwise, or failure by the Company to purchase Securities when
required; (c) failure by the Company to comply with certain other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (d) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or the
Significant Subsidiaries if the amount accelerated (or so unpaid) exceeds $5.0
million; (e) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; and (f) certain judgments or decrees
for the payment of money in excess of $5.0 million. 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
11
Securities unless it receives indemnity or security satisfactory to it. 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
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
14. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, 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
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. 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) 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
entireties), 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).
12
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 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 BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:
Roto-Rooter, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
13
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:________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act 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 transferred in accordance
with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933)
14
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in each case
pursuant to and in compliance with Rule 144A under the Securities
Act of 1933; or
(4) [ ] to an institutional accredited investor in a transaction
exempt from the registration requirements of the Securities Act;
or
(5) [ ] pursuant to the exemption from registration provided by Rule 144
under 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
(4) or (5) is checked, the Trustee shall be entitled to require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested 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
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee
15
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.
16
TO BE COMPLETED BY PURCHASER IF (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, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:________________________ _______________________________
Notice: To be executed by
an executive officer
17
[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 Signature of
Amount of decrease Amount of increase this Global authorized officer
in Principal in Principal amount Security following of Trustee or
Date of amount of this of this Global such decrease or Securities
Exchange Global Security Security increase) Custodian
-------- ------------------ ------------------- ------------------- ------------------
18
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.10 of the Indenture, state the
principal amount: $
Dated:____________________ Your Signature:_____________________________
(Sign exactly as your
name appears on the
other side of this
Security.)
Signature Guarantee:___________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY*]
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
2
No.____________ $ _______
8 3/4% Senior Notes Due 2011
Roto-Rooter, Inc., a Delaware corporation, promises to pay to
________, or registered assigns, the principal sum of _______________ Dollars on
February 24, 2011.
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.
Dated:
ROTO-ROOTER, INC.
By
-------------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE BANK NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
--------------------------------
Authorized Signatory
3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
8 3/4% Senior Note Due 2011
1. INTEREST
Roto-Rooter, 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; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.25% per annum
for the first 90 days following a Registration Default, at a per annum rate of
0.50% for the second 90 days following a Registration Default, at a per annum
rate of 0.75% for the third 90 days following a Registration Default and at a
per annum rate of 1.0% thereafter from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. The Company will pay interest
semiannually on February 15 and August 15 of each year, commencing August 15,
2004. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from February 24, 2004.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal at the rate borne by
this Security plus 1.0% per annum, and it will pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted interest)
to the Persons who are registered holders of Securities at the close of business
on the February 1 or August 1 next preceding the interest payment date even if
Securities are canceled 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 the Securities represented by a Global
Security (including principal, premium and interest) will be made by wire
transfer of
4
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a certificated
Security (including principal, premium and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on
a certificated Security will be made 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 30 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, LaSalle Bank National Association, a national banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of February
24, 2004 ("Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture 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 obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay
5
dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in
transactions with affiliates; create liens on assets; transfer or sell assets;
restrict dividends or other payments of subsidiaries; consolidate, merge or
transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in sale/leaseback transactions. These covenants are
subject to important exceptions and qualifications.
5. OPTIONAL REDEMPTION
Except as set forth below, the Company shall not be entitled to redeem the
Securities.
On and after February 24, 2007, the Company shall be entitled at its option
to redeem all or a portion of the Securities upon not less than 30 nor more than
60 days' prior notice, at the redemption prices (expressed in percentages of
principal amount on the redemption date), plus accrued and unpaid interest to,
but excluding, the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest, if any, due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
February 24 of the years set forth below:
Redemption
Year Price
---- ----------
2007 104.375%
2008 102.917%
2009 101.458%
2010 and thereafter 100.000%
In addition, prior to February 24, 2007, the Company shall be entitled at
its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued on not less than 30 nor more
than 60 days' prior notice, at a redemption price (expressed as a percentage of
principal amount) of 108.750%, plus accrued and unpaid interest to, but
excluding, the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant
6
interest payment date), with the Net Cash Proceeds from one or more Equity
Offerings by the Company or Qualifying Subsidiary Stock Sales; provided,
however, that (1) at least 65% of such aggregate principal amount of Securities
(which includes Additional Securities, if any) remains outstanding immediately
after the occurrence of each such redemption (other than Securities held,
directly or indirectly, by the Company or its Affiliates); and (2) each such
redemption occurs within 60 days after the date of the related Equity Offering
or Qualifying Subsidiary Stock Sale, as the case may be.
Prior to February 24, 2007, the Company shall be entitled at its option to
redeem all, but not less than all, of the Securities at a redemption price equal
to 100% of the principal amount of the Securities plus the Applicable Premium as
of, and accrued and unpaid interest to, the redemption date (subject to the
right of Holders on the relevant record date to receive interest due on the
relevant interest payment date). The Company shall cause notice of such
redemption to be mailed by first-class mail to each Holder's registered address,
not less than 30 nor more than 60 days prior to the redemption date. Any notice
to Holders of such a redemption must include the appropriate calculation of the
redemption price, but does not need to include the redemption price itself. The
actual redemption price must be set forth in an Officers' Certificate delivered
to the Trustee no later than two Business Days prior to the redemption date.
"Applicable Premium" means, with respect to any Security on any redemption
date, the excess (but not less than zero) of (i) the present value at such
redemption date of all remaining scheduled payments of interest (excluding
accrued interest) and principal on such Security (discounted at the equivalent
of the on Treasury Rate plus 50 basis points over (ii) the then outstanding
principal amount of such Security.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the date fixed
for redemption (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the then
remaining average life
7
to February 24, 2007, provided, however, that if the average life to February
24, 2007 of the Securities is not equal to the constant maturity of a United
States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the
average life to February 24, 2007, of the Securities is less than one year,
the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 principal
amount may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
Any notice of redemption may provide that the redemption will be subject to
specified conditions, provided that such conditions are not solely within the
Company's control.
7. PUT PROVISIONS
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 repurchase price equal to 101% of the principal amount of the Securities to
be repurchased plus accrued and unpaid interest to, but excluding, the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
8
8. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations of
$1,000 principal amount 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 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) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an 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. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time shall be entitled to
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,
the principal of and interest on which will be sufficient, or a combination
thereof sufficient, to pay the principal of and premium (if any) and interest on
the Securities to maturity or redemption, as the case may be.
12. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (1) the Indenture
and the Securities may be amended with the written consent of the Holders of at
least
9
a majority in principal amount outstanding of the Securities and (2) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 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 or to secure the Securities, or to add additional covenants 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.
13. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (a) default for 30 days in
payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon optional redemption, upon declaration of
acceleration or otherwise, or failure by the Company to redeem or purchase
Securities when required; (c) failure by the Company to comply with certain
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (d) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company or the Significant Subsidiaries if the amount accelerated (or so unpaid)
exceeds $5.0 million; (e) certain events of bankruptcy or insolvency with
respect to the Company and the Significant Subsidiaries; and (f) certain
judgments or decrees for the payment of money in excess of $5.0 million. 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
10
Securities unless it receives indemnity or security satisfactory to it.
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
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
14. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, 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
A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. 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) 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
entireties), 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).
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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 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 BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request and
without charge to the Security holder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Roto-Rooter, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
12
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:________________________________
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.10 of the Indenture, state the
principal amount: $
Dated:_____________ Your Signature:__________________________________
(Sign exactly as your
name appears on the
other side of this Security.)
Signature Guarantee:_______________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.