exv4w1



 









Exhibit 4.1




Execution Copy




MANOR CARE, INC.,




THE SUBSIDIARY GUARANTORS PARTIES HERETO,




AND




U.S. BANK NATIONAL ASSOCIATION,

AS TRUSTEE




2% Convertible Senior Notes due 2036




INDENTURE




Dated as of May 17, 2006










 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	 	 
	SECTION 1.1. Definitions.
	 	 	1	 
	SECTION 1.2. Other Definitions.
	 	 	11	 
	SECTION 1.3. Incorporation by Reference of Trust Indenture Act
	 	 	12	 
	SECTION 1.4. Rules of Construction
	 	 	13	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	THE SECURITIES
	 	 	 	 
	SECTION 2.1. Title and Terms
	 	 	13	 
	SECTION 2.2. Form of Securities.
	 	 	15	 
	SECTION 2.3. Legends
	 	 	16	 
	SECTION 2.4. Execution and Authentication
	 	 	20	 
	SECTION 2.5. Registrar and Paying Agent
	 	 	22	 
	SECTION 2.6. Paying Agent To Hold Money in Trust
	 	 	22	 
	SECTION 2.7. Securityholder Lists
	 	 	23	 
	SECTION 2.8. General Provisions Relating to Transfer and Exchange
	 	 	23	 
	SECTION 2.9. Book-Entry Provisions for the Global Securities
	 	 	24	 
	SECTION 2.10. Special Transfer Provisions
	 	 	25	 
	SECTION 2.11. Mutilated, Destroyed, Lost or Stolen Securities
	 	 	27	 
	SECTION 2.12. Outstanding Securities
	 	 	28	 
	SECTION 2.13. Temporary Securities
	 	 	29	 
	SECTION 2.14. Cancellation
	 	 	29	 
	SECTION 2.15. Payment of Interest; Defaulted Interest
	 	 	29	 
	SECTION 2.16. Computation of Interest
	 	 	30	 
	SECTION 2.17. CUSIP and ISIN Numbers
	 	 	30	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	COVENANTS
	 	 	 	 
	SECTION 3.1. Payment of Securities
	 	 	31	 
	SECTION 3.2. Financial Statements
	 	 	31	 
	SECTION 3.3. Future Subsidiary Guarantors; Release of Guarantees
	 	 	32	 
	SECTION 3.4. Maintenance of Office or Agency
	 	 	33	 
	SECTION 3.5. Corporate Existence
	 	 	34	 
	SECTION 3.6. Payment of Taxes and Other Claims
	 	 	34	 
	SECTION 3.7. Payments for Consent
	 	 	34	 
	SECTION 3.8. Compliance Certificate
	 	 	35	 
	SECTION 3.9. Further Instruments and Acts
	 	 	35	 
	SECTION 3.10. Statement by Officers as to Default
	 	 	35	 
	SECTION 3.11. Tax Treatment
	 	 	35	 
	SECTION 3.12. Additional Interest
	 	 	35	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	SUCCESSOR COMPANY
	 	 	 	 
	SECTION 4.1. Consolidation, Merger and Sale of Assets
	 	 	36	 




i








 





	 	 	 	 	 
	 	 	Page
	ARTICLE V
	 	 	 	 
	REDEMPTION OF SECURITIES
	 	 	 	 
	SECTION 5.1. Optional Redemption
	 	 	37	 
	SECTION 5.2. Applicability of Article
	 	 	37	 
	SECTION 5.3. Election to Redeem; Notice to Trustee
	 	 	37	 
	SECTION 5.4. Selection by Trustee of Securities to Be Redeemed
	 	 	37	 
	SECTION 5.5. Notice of Redemption
	 	 	38	 
	SECTION 5.6. Deposit of Redemption Price
	 	 	39	 
	SECTION 5.7. Securities Payable on Redemption Date
	 	 	39	 
	SECTION 5.8. Securities Redeemed in Part
	 	 	39	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	DEFAULTS AND REMEDIES
	 	 	 	 
	SECTION 6.1. Events of Default
	 	 	40	 
	SECTION 6.2. Acceleration
	 	 	42	 
	SECTION 6.3. Other Remedies
	 	 	42	 
	SECTION 6.4. Waiver of Past Defaults
	 	 	42	 
	SECTION 6.5. Control by Majority
	 	 	43	 
	SECTION 6.6. Limitation on Suits
	 	 	43	 
	SECTION 6.7. Rights of Holders to Receive Payment
	 	 	43	 
	SECTION 6.8. Collection Suit by Trustee
	 	 	44	 
	SECTION 6.9. Trustee May File Proofs of Claim
	 	 	44	 
	SECTION 6.10. Priorities
	 	 	44	 
	SECTION 6.11. Undertaking for Costs
	 	 	44	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	TRUSTEE
	 	 	 	 
	SECTION 7.1. Duties of Trustee
	 	 	45	 
	SECTION 7.2. Rights of Trustee
	 	 	46	 
	SECTION 7.3. Individual Rights of Trustee
	 	 	47	 
	SECTION 7.4. Trustee’s Disclaimer
	 	 	47	 
	SECTION 7.5. Notice of Defaults
	 	 	47	 
	SECTION 7.6. Reports by Trustee to Holders
	 	 	48	 
	SECTION 7.7. Compensation and Indemnity
	 	 	48	 
	SECTION 7.8. Replacement of Trustee
	 	 	49	 
	SECTION 7.9. Successor Trustee by Merger
	 	 	50	 
	SECTION 7.10. Eligibility; Disqualification
	 	 	50	 
	SECTION 7.11. Preferential Collection of Claims Against Company
	 	 	50	 
	SECTION 7.12. Trustee’s Application for Instruction from the Company
	 	 	50	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	DISCHARGE OF INDENTURE
	 	 	 	 
	SECTION 8.1. Discharge of Liability on Securities
	 	 	50	 
	SECTION 8.2. Reinstatement
	 	 	51	 
	SECTION 8.3. Officers’ Certificate; Opinion of Counsel
	 	 	52	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	AMENDMENTS
	 	 	 	 
	SECTION 9.1. Without Consent of Holders
	 	 	52	 




ii








 





	 	 	 	 	 
	 	 	Page
	SECTION 9.2. With Consent of Holders
	 	 	53	 
	SECTION 9.3. Compliance with Trust Indenture Act
	 	 	54	 
	SECTION 9.4. Revocation and Effect of Consents and Waivers
	 	 	54	 
	SECTION 9.5. Notation on or Exchange of Securities
	 	 	54	 
	SECTION 9.6. Trustee To Sign Amendments
	 	 	54	 
	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	SUBSIDIARY GUARANTEE
	 	 	 	 
	SECTION 10.1. Subsidiary Guarantee
	 	 	55	 
	SECTION 10.2. Limitation on Liability; Termination, Release and Discharge Upon Merger or Consolidation; Termination on Conversion
	 	 	56	 
	SECTION 10.3. Right of Contribution
	 	 	57	 
	SECTION 10.4. No Subrogation
	 	 	58	 
	 
	 	 	 	 
	ARTICLE XI
	 	 	 	 
	PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE; REPURCHASE AT THE OPTION OF HOLDERS
	 	 	 
	SECTION 11.1. Purchase at the Option of the Holder Upon a Fundamental Change
	 	 	58	 
	SECTION 11.2. Purchase of Securities at the Option of the Holder
	 	 	60	 
	SECTION 11.3. Further Conditions and Procedures for Purchase at the Option of the Holder Upon a Fundamental Change and Purchase of Securities at the Option of the Holder
	 	 	62	 
	 
	 	 	 	 
	ARTICLE XII
	 	 	 	 
	CONVERSION
	 	 	 	 
	SECTION 12.1. Conversion of Securities.
	 	 	65	 
	SECTION 12.2. Adjustments to Conversion Rate
	 	 	68	 
	SECTION 12.3. Conversion After a Public Acquirer Change of Control
	 	 	76	 
	SECTION 12.4. Effect of Reclassification, Consolidation, Merger or Sale
	 	 	76	 
	SECTION 12.5. Responsibility of Trustee
	 	 	78	 
	SECTION 12.6. Notice to Holders Prior to Certain Actions
	 	 	78	 
	SECTION 12.7. Stockholder Rights Plan
	 	 	79	 
	 
	 	 	 	 
	ARTICLE XIII
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	SECTION 13.1. Trust Indenture Act Controls
	 	 	79	 
	SECTION 13.2. Notices
	 	 	80	 
	SECTION 13.3. Communication by Holders with other Holders
	 	 	81	 
	SECTION 13.4. Certificate and Opinion as to Conditions Precedent
	 	 	81	 
	SECTION 13.5. Statements Required in Certificate or Opinion
	 	 	81	 
	SECTION 13.6. When Securities Disregarded
	 	 	82	 
	SECTION 13.7. Rules by Trustee, Paying Agent and Registrar
	 	 	82	 
	SECTION 13.8. Legal Holidays
	 	 	82	 
	SECTION 13.9. GOVERNING LAW; WAIVER OF JURY TRIAL
	 	 	82	 
	SECTION 13.10. No Recourse Against Others
	 	 	82	 
	SECTION 13.11. Successors
	 	 	83	 
	SECTION 13.12. Multiple Originals
	 	 	83	 
	SECTION 13.13. Qualification of Indenture
	 	 	83	 
	SECTION 13.14. Table of Contents; Headings
	 	 	83	 




iii








 





	 	 	 	 	 
	 	 	Page
	SECTION 13.15. Force Majeure
	 	 	83	 
	SECTION 13.16. Severability Clause
	 	 	83	 






	 	 	 
	EXHIBIT A

	 	Form of the Security
	EXHIBIT B

	 	Form of Indenture Supplement to Add Subsidiary Guarantors




iv








 







CROSS-REFERENCE TABLE




	 	 	 	 	 
	TIA	 	Indenture
	Section	 	Section
	310(a)(1)
	 	 	7.10	 
	(a)(2)
	 	 	7.10	 
	(a)(3)
	 	 	N.A.	 
	(a)(4)
	 	 	N.A.	 
	(a)(5)
	 	 	7.10	 
	(b)
	 	 	7.8; 7.10	 
	(c)
	 	 	N.A.	 
	311(a)
	 	 	7.11	 
	(b)
	 	 	7.11	 
	(c)
	 	 	N.A.	 
	312(a)
	 	 	2.7	 
	(b)
	 	 	13.3	 
	(c)
	 	 	13.3	 
	313(a)
	 	 	7.6	 
	(b)(1)
	 	 	N.A.	 
	(b)(2)
	 	 	7.6	 
	(c)
	 	 	7.6	 
	(d)
	 	 	7.6	 
	314(a)
	 	 	3.2; 3.8, 13.5	 
	(b)
	 	 	N.A.	 
	(c)(1)
	 	 	13.4	 
	(c)(2)
	 	 	13.4	 
	(c)(3)
	 	 	N.A.	 
	(d)
	 	 	N.A.	 
	(e)
	 	 	13.5	 
	(f)
	 	 	N.A.	 
	315(a)
	 	 	7.1	 
	(b)
	 	 	7.5; 13.2	 
	(c)
	 	 	7.1	 
	(d)
	 	 	7.1	 
	(e)
	 	 	6.11	 
	316(a)(last sentence)
	 	 	13.6	 
	(a)(1)(A)
	 	 	6.5	 
	(a)(1)(B)
	 	 	6.4	 
	(a)(2)
	 	 	N.A.	 
	(b)
	 	 	6.7	 
	(c)
	 	 	6.5	 
	317(a)(1)
	 	 	6.8	 
	(a)(2)
	 	 	6.9	 
	(b)
	 	 	2.6	 
	318(a)
	 	 	13.1	 
	(b)
	 	 	N.A.	 
	(c)
	 	 	13.1	 






N.A. means Not Applicable.


v








 






Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this
Indenture.


vi








 





          INDENTURE dated as of May 17, 2006, among MANOR CARE, INC., a Delaware corporation (the
“Company”), THE SUBSIDIARY GUARANTORS (as defined) and U.S. BANK NATIONAL ASSOCIATION (the
“Trustee”), as Trustee.




          Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Company’s 2% Convertible Senior Notes due 2036 (the
“Securities”) on the date hereof and the guarantees thereof by certain of the Company’s
subsidiaries.




ARTICLE I




Definitions and Incorporation by Reference




          SECTION 1.1. Definitions.




          “2013 Notes” means the Company’s 6.25% Senior Notes due 2013.




          “2023 Notes” means the Company’s 2.125% Convertible Senior Notes due 2023.




          “2035 Notes” means the Company’s 2.125% Convertible Senior Notes due 2035.




          “Additional Interest” means all interest, if any, payable pursuant to Section 2 of the
Registration Rights Agreement.




          “Affiliate” of any specified Person means any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing; provided, however, that the existence of a
management contract by the Company or an Affiliate of the Company to manage another entity shall
not be deemed to be control.




          “Applicable Five Day Trading Period” means, with respect to any interest period in which
Contingent Interest may be payable, the five Trading Days ending on the second Trading Day
immediately preceding the first day of such interest period.




          “Attributable Debt” in respect of a Sale and Lease-Back Transaction means, as at the time of
determination, the present value (discounted at the interest rate borne by the Securities,
compounded semi-annually) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale and Lease-Back Transaction (including any period
for which such lease has been extended).




          “Bankruptcy Law” means Title 11 of the United States Code or any similar federal or state law
for the relief of debtors.




          “Beneficial Owner” shall mean any person who is considered a beneficial owner of a security in
accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act.










 



2




          “Bid Agent” means a bid agent appointed by the Company to act in such capacity for the
purposes of determining the Securities Price, provided that such agent shall not be the Company or
an Affiliate of the Company. The Bid Agent appointed by the Company shall initially be the
Trustee.




          “Board of Directors” means, as to any Person, the board of directors of such Person or any
duly authorized committee thereof.




          “Board Resolution” means a copy of a resolution certified by the Secretary or Assistant
Secretary of a Person to have been duly adopted by the Board of Directors of such Person and to be
in full force and effect on the date of such certification, and delivered to the Trustee.




          “Business Day” means each day that is not a Saturday, Sunday or other day on which banking
institutions in New York, New York and Cleveland, Ohio are authorized or required by law to close.




          “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 Debt represented by such obligation will be the capitalized amount of such obligation
at the time any determination thereof is to be made as determined in accordance with GAAP, and the
Stated Maturity thereof will be the date of the last payment of rent or any other amount due under
such lease prior to the first date such lease may be terminated without penalty.




          “Cash Settlement Averaging Period” means, with respect to any Securities, the 20 consecutive
Trading-Day period beginning on and including the second Trading Day after a Holder delivers a
conversion notice to the Conversion Agent, except that with respect to any conversion notice
received after the date of issuance of a notice of redemption pursuant to Article V, “Cash
Settlement Averaging Period” means the 20 consecutive Trading Days beginning on and including the
twenty-third Trading Day prior to the applicable Redemption Date.




          “Clearstream” means Clearstream Banking, société anonyme, or any successor securities clearing
agency.




          “Code” means the Internal Revenue Code of 1986, as amended.




          “Common Equity” of any Person means capital stock of such Person that is generally entitled to
(1) vote in the election of directors of such Person or (2) if such Person is not a corporation,
vote or otherwise participate in the selection of the governing body, partners, managers or others
that will control the management or policies of such Person.










 



3




          “Common Stock” means the Company’s Common Stock, par value $0.01 per share.




          “Company” means Manor Care, Inc. or its successors and assigns.




          “Continuing Director” means a director who either was a member of the Board of Directors of
the Company on the date of the Offering Memorandum or who becomes a director of the Company
subsequent to that date and whose election, appointment or nomination for election by stockholders
of the Company, is duly approved by a majority of the Continuing Directors on the Board of
Directors of the Company at the time of such approval, either by a specific vote or by approval of
the proxy statement issued by the Company on behalf of the entire Board of Directors of the Company
in which such individual is named as nominee for director.




          “Conversion Agent” means the office or agency appointed by the Company where Securities may be
presented for conversion. The Conversion Agent appointed by the Company shall initially be the
Trustee




          “Conversion Price” means the principal amount of Securities that can be exchanged for one
share of Common Stock (initially approximately $49.75), subject to adjustments set forth herein.




          “Conversion Rate” means the number of shares of Common Stock issuable in respect of $1,000
principal amount of Securities, initially 20.0992 shares, subject to adjustments as set forth
herein.




          “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.




          “Debt” 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)	 	the principal component of all obligations of such Person in
respect of letters of credit, bankers’ acceptances or other similar instruments
(including reimbursement obligations with respect thereto except to the extent
such reimbursement obligation relates to a trade payable and such obligation is
satisfied within 30 days of Incurrence);
	 
	 	(4)	 	the principal component of all obligations of such Person to
pay the deferred and unpaid purchase price of property (except trade payables),
which purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto;










 



4


	 	(5)	 	Capitalized Lease Obligations and all Attributable Debt of such
Person; and
	 
	 	(6)	 	the principal component of Debt of other Persons to the extent
Guaranteed by such Person.




The amount of Debt of any Person at any date will be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such date.




          “Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.




          “Definitive Securities” mean certificated Securities.




          “DTC” means The Depository Trust Company, its nominees and their respective successors and
assigns, or such other depository institution hereinafter appointed by the Company.




          “Euroclear” means Euroclear Bank S.A./N.V. or any successor securities clearing agency.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.




          “Fair Market Value” means the amount that a willing buyer would pay a willing seller in an
arm’s length transaction.




          “Fiscal Year” means the fiscal year of the Company ending on December 31 of each year.




          “Fundamental Change 105% Exception” has the meaning provided in the definition of Fundamental
Change in this Section 1.1.




          A “Fundamental Change” shall be deemed to have occurred at such time after the original
issuance of the Securities as any of the following occurs:





	 	(1)	 	any “person” or “group” within the meaning of Section 13(d) of
the Exchange Act, other than the Company, any Subsidiary of the Company or any
employee benefit plan of the Company or any such Subsidiary, files a Schedule
TO or any other schedule, form or report under the Exchange Act disclosing that
such person or group has become the direct or indirect ultimate Beneficial
Owner of Common Equity of the Company representing more than 50% of the voting
power of the Company’s Common Equity;
	 
	 	(2)	 	consummation of any share exchange, consolidation or merger of
the Company pursuant to which the Common Stock will be converted into










 



5


	 	 	 	cash, securities or other property or any sale, lease or other transfer (in
one transaction or a series of transactions) of all or substantially all of
the consolidated assets of the Company and its Subsidiaries, taken as a
whole, to any Person other than one of the Company’s Subsidiaries; provided,
however, that a transaction where the holders of more than 50% of all
classes of the Company’s Common Equity immediately prior to such transaction
own, directly or indirectly, more than 50% of all classes of Common Equity
of the continuing or surviving corporation or transferee immediately after
such event shall not be a Fundamental Change;
	 
	 	(3)	 	Continuing Directors cease to constitute at least a majority of
the Company’s Board of Directors;
	 
	 	(4)	 	the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; or
	 
	 	(5)	 	the Company’s Common Stock ceases to be listed on a national
securities exchange or quoted on the Nasdaq National Market or another
established automated over-the-counter trading market in the United States;




provided, however, that a Fundamental Change shall not be deemed to have occurred if either (I) the
Last Reported Sale Price per share of the Common Stock for any five Trading Days within the period
of 10 consecutive Trading Days ending immediately before the later of the Fundamental Change or the
announcement thereof shall equal or exceed 105% of the Conversion Price per share of Common Stock
in effect on each of those Trading Days (this clause being referred to as the “Fundamental Change
105% Exception”) or (II) at least 90% of the consideration, excluding cash payments for fractional
shares, in the transaction or transactions constituting the Fundamental Change consists of shares
of common stock with full voting rights traded on a national securities exchange or quoted on the
Nasdaq National Market or which shall be so traded or quoted when issued or exchanged in connection
with such Fundamental Change (such securities being referred to as “Publicly Traded Securities”)
and as a result of such transaction or transactions such Securities become convertible into such
Publicly Traded Securities (excluding cash payments for fractional shares).




          “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant segment of the
accounting profession as in effect from time to time.




          “Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Debt 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 Debt of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase










 



6


	 	 	 	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 Debt of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part);




provided, however, that the term “Guarantee” will not include endorsements for collection or
deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding
meaning.




          “Holder” or “Securityholder” means the Person in whose name a Security is registered in the
Securities Register.




          “Incur” means issue, create, assume, Guarantee, incur or otherwise become liable for; and the
terms “Incurred” and “Incurrence” have meanings correlative to the foregoing.




          “Indenture” means this Indenture, as amended or supplemented from time to time.




          “Initial Purchasers” means, collectively, J.P. Morgan Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Banc of America Securities LLC, UBS Securities LLC, SunTrust Capital
Markets, Inc., Wachovia Capital Markets, LLC, NatCity Investments, Inc. and Huntington Capital
Corp.




          “Issue Date” means May 17, 2006.




          “Last Reported Sale Price” of the Common Stock on any date means the closing sale price per
share (or, if no closing sale price is reported, the average of the bid and ask prices or, if more
than one in either case, the average of the average bid and average ask prices) on that date as
reported in the composite transactions for the principal U.S. securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a U.S. national or regional
securities exchange, as reported by the Nasdaq National Market.




          If the Common Stock is not listed for trading on a U.S. national or regional securities
exchange and not reported by the Nasdaq National Market on the relevant date, the Last Reported
Sale Price shall be the last quoted bid price for the Common Stock in the over-the-counter market
on the relevant date as reported by the National Quotation Bureau or similar organization.




          If the Common Stock is not so quoted, the Last Reported Sale Price shall be the average of the
mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at
least three nationally recognized independent investment banking firms selected by the Company for
this purpose.




          “Majority Owned” means having “beneficial ownership” (as defined in Rule 13(d)(3) under the
Exchange Act) of more than 50% of the total voting power of all shares of the










 



7



respective entity’s capital stock that are entitled to vote generally in the election of
directors. “Majority Owner” has the correlative meaning.




          “Market Disruption Event” means the occurrence or existence during the one-half hour period
ending on the scheduled close of trading on any trading day for the Common Stock of any material
suspension or limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or
future contracts relating to the Common Stock.




          “Moody’s” means Moody’s Investors Service, Inc., or, if Moody’s Investors Service, Inc. shall
cease rating debt securities having a maturity at original issuance of at least one year and such
ratings business shall have been transferred to a successor Person, such successor Person;
provided, however, that if there is no successor Person, then “Moody’s” shall mean any other
nationally recognized rating agency, other than S&P, that rates debt securities having a maturity
at original issuance of at least one year and that shall have been designated by the Company.




          “Non-Recourse Debt” means Debt or that portion of Debt (i) as to which neither the Company nor
its Subsidiaries (other than a Non-Recourse Subsidiary) (A) provides credit support (including any
undertaking, agreement or instrument which would constitute Debt), (B) is directly or indirectly
liable or (C) constitute the lender and (ii) in respect of which a default (including any rights
which the holders thereof may have to take enforcement action against a Non-Recourse Subsidiary)
would not permit (upon notice, lapse of time or both) any holder of any other Debt of the Company
or its Subsidiaries (including any Non-Recourse Subsidiary) to declare a default on such other Debt
or cause a payment thereof to be accelerated or payable prior to its Stated Maturity.




          “Non-Recourse Subsidiary” means a Subsidiary which (i) has not acquired any assets (other than
cash) directly or indirectly from the Company or any Subsidiary, (ii) only owns assets acquired
after the Issue Date or assets acquired prior to the date such entity becomes a Subsidiary and
(iii) has no Debt other than Non-Recourse Debt.




          “Offering Memorandum” means the offering memorandum, dated May 11, 2006, relating to the
offering by the Company of $250.0 million of the 2% Convertible Senior Notes due 2036.




          “Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, the Treasurer or the Secretary of the Company. The
term Officer of any Subsidiary Guarantor has a correlative meaning.




          “Officers’ Certificate” means a certificate signed by two Officers or attorneys-in-fact or by
an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company or the
Subsidiary Guarantors, as applicable.




          “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.










 



8




          “Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company, government or
any agency or political subdivision hereof or any other entity.




          “Preferred Stock”, as applied to the Capital Stock of any corporation, means Capital Stock of
any class or classes (however designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such corporation.




          “Public Acquirer Change of Control” means a Fundamental Change in which the acquirer has a
class of common stock traded on any U.S. national securities exchange or quoted on the Nasdaq
National Market or which will be so traded or quoted when issued or exchanged in connection with
such Fundamental Change (the “Public Acquirer Common Stock”). If an acquirer does not itself have
a class of common stock satisfying the foregoing requirement, it shall be deemed to have Public
Acquirer Common Stock if a corporation that directly or indirectly is the Majority Owner of the
acquirer has a class of common stock satisfying the foregoing requirement; in such case, all
references to Public Acquirer Common Stock shall refer to such class of common stock.




          “Public Acquirer Common Stock” has the meaning assigned to it in the definition of Public
Acquirer Change of Control in this Section 1.01.




          “Publicly Traded Securities” has the meaning provided in the definition of Fundamental Change
in this Section 1.1.




          “Purchase Price” has the meaning provided in paragraph 7 of the Securities.




          “QIB” means any “qualified institutional buyer” (as term is defined in Rule 144A).




          “Redemption Date” means, with respect to any redemption of Securities, the date of redemption
with respect thereto.




          “Registration Rights Agreement” means the Registration Rights Agreement dated as of the Issue
Date among the Initial Purchasers, the Subsidiary Guarantors and the Company.




          “Regular Record Date” for the interest on the Securities (including Contingent Interest and
Additional Interest, if any), means the May 15 (whether or not a Business Day) next preceding an
interest payment date on June 1 and the November 15 (whether or not a Business Day) next preceding
an interest payment date on December 1.




          “Regulation S” means Regulation S under the Securities Act.




          “Rule 144A” means Rule 144A under the Securities Act.










 



9




          “S&P” means Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies, Inc.,
or, if Standard & Poor’s Ratings Service shall cease rating debt securities having a maturity at
original issuance of at least one year and such ratings business shall have been transferred to a
successor Person, such successor Person; provided, however, that if there is no successor Person,
then “S&P” shall mean any other nationally recognized rating agency, other than Moody’s, that rates
debt securities having a maturity at original issuance of at least one year and that shall have
been designated by the Company.




          “Sale and Lease-Back Transaction” means any arrangement with any Person providing for the
leasing by the Company or its Subsidiaries of any property or assets (other than any such
arrangement involving (i) a lease for a term, including renewal rights, of not more than 36 months,
(ii) a lease of property within 18 months from the acquisition or, in the case of the construction,
alteration or improvement of property, the later of the completion of the construction, alteration
or improvement of such property or the commencement of commercial operation of the property, or
(iii) leases between or among the Company and a Subsidiary or Subsidiaries), which property or
asset has been or is to be sold or transferred by the Company or a Subsidiary to such Person.




          “SEC” means the United States Securities and Exchange Commission.




          “Securities” has the meaning ascribed to it in the second introductory paragraph of this
Indenture.




          “Securities Act” means the Securities Act of 1933 (15 U.S.C. §§ 77a – 77aa), as
amended, and the rules and regulations of the SEC promulgated thereunder.




          “Securities Custodian” means the custodian with respect to the Global Security (as appointed
by DTC), or any successor Person thereto and shall initially be the Trustee.




          “Securities Price” means, as of any date of determination, the average of the secondary market
bid quotations per $1,000 principal amount of Securities obtained by the Bid Agent for $10,000,000
of Securities at approximately 4:00 p.m. (New York City time) on such determination date from three
unaffiliated recognized securities dealers in The City of New York (none of which shall be an
Affiliate of the Company) selected by the Company; provided, however, if (a) at least three such
bids are not obtained by the Bid Agent or (b) in the Company’s reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Securities as of such
determination date, then the Securities Price for such determination date shall equal (i) the
Conversion Rate in effect as of such determination date multiplied by (ii) the average Last
Reported Sale Price for the five Trading Days ending on such determination date, appropriately
adjusted to take into account the occurrence, during the period commencing on the first of such
trading days during such five Trading Day period and ending on such determination date, of any
event described in Section 12.2.




          “Securities Register” means the register of Securities, maintained by the Registrar, pursuant
to Section 2.5.




          “Senior Credit Obligations” means, with respect to the Company, one or more debt facilities
(including, without limitation, Credit Agreement dated as of May 27, 2005 as










 



10



amended on August 3, 2005, among the Company, certain subsidiaries of the Company, JP Morgan
Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, SunTrust
Bank, UBS Securities LLC, and Merrill Lynch Bank USA, as Documentation Agents, and J.P. Morgan
Securities Inc., as Sole Lead Arranger and Sole Book Manager and the lenders parties thereto from
time to time, as may be amended or modified from time to time) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term loans or letters of
credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time (and whether or not with the original administrative agent and
lenders or another administrative agent or agents or other lenders and whether provided under the
original Credit Agreement or any other credit or other agreement or indenture).




          “Shelf Registration Statement” shall have the meaning contemplated by and in accordance with
the terms of the Registration Rights Agreement.




          “Significant Subsidiary” means any 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.




          “Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision, but shall not include any contingent obligations to
repay, redeem or repurchase any such principal prior to the date originally scheduled for the
payment thereof.




          “Stock Price” means the price per share of Common Stock paid in connection with a Fundamental
Change, which shall be equal to (i) if holders of Common Stock receive only cash in such corporate
transaction, the cash amount paid per share of Common Stock and (ii) in all other cases, the
average of the Last Reported Sale Prices of Common Stock over the five Trading Day period ending on
the Trading Day preceding the Effective Date.




          “Subsidiary” of the Company means (i) a corporation a majority of whose Capital Stock with
voting power, under ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by the Company, by the Company and one or more Subsidiaries of the Company or by
one or more Subsidiaries of the Company or (ii) any other Person (other than a corporation) in
which the Company, one or more Subsidiaries of the Company or the Company and one or more
Subsidiaries of the Company, directly or indirectly, at the date of determination thereof, has
greater than a 50% ownership interest.




          “Subsidiary Guarantee” means, individually, any Guarantee of payment of the Securities by a
Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture hereto
(including pursuant to Exhibit B), and, collectively, all such Guarantees. Each such Subsidiary
Guarantee will be in the form prescribed by this Indenture.




          “Subsidiary Guarantor” means each Subsidiary of the Company (other than a Subsidiary that does
not guarantee obligations under the Senior Credit Obligations, the 2013







 



11




Notes, the 2023 Notes and the 2035 Notes) in existence on the Issue Date and, any Subsidiary
that is required to Guarantee the Securities under the terms of this Indenture.




          “TIA” or “Trust Indenture Act” means the Trust Indenture Act of 1939 (15 U.S.C. §§
77aaa-77bbbb), as in effect on the date of this Indenture, except as provided in Section
9.3.




          “Trading Day” means a day during which (i) trading in the Common Stock generally occurs, (ii)
there is no Market Disruption Event and (iii) a closing sale price for the Common Stock is provided
on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock
Exchange, on the principal other U.S. national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not listed on a U.S. national or regional
securities exchange, on the principal other market on which the Common Stock is then traded.




          “Trustee” means the party named as such in this Indenture until a successor replaces it and,
thereafter, means the successor.




          “Trust Officer” shall mean, when used with respect to the Trustee, any officer within the
corporate trust department of the Trustee, including any vice president, assistant vice president,
trust officer or any other officer of the Trustee who customarily performs functions similar to
those performed by the Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the administration of this
Indenture.




          SECTION 1.2. Other Definitions.




	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	“Additional Shares”
	 	 	12.2	(f)
	“Adjustment Event”
	 	 	12.2	(k)
	“Agent”
	 	 	3.4	 
	“Agent Member”
	 	 	2.9	 
	“Applicable Consideration”
	 	 	12.4	(a)
	“Authenticating Agent”
	 	 	2.4	 
	“Certificate of Destruction”
	 	 	2.14	 
	“Company Notice”
	 	 	11.3	(a)
	“Company Notice Date”
	 	 	11.3	(a)
	“Company Order”
	 	 	2.4	 
	“Contingent Interest”
	 	 	2.1	(d)
	“Conversion Date”
	 	 	12.1	(b)
	“cross acceleration provision”
	 	 	6.1	 
	“Current Dividend Rate”
	 	 	12.2	(d)
	“Daily Settlement Amount”
	 	 	12.1	(c)
	“Daily Conversion Value”
	 	 	12.1	(c)
	“Defaulted Interest”
	 	 	2.15	 












 



12


	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	“Determination Date”
	 	 	12.2	(k)
	“Effective Date”
	 	 	12.2	(f)
	“Event of Default”
	 	 	6.1	 
	“Expiration Time”
	 	 	12.2	(e)
	“Fundamental Change Purchase Date”
	 	 	11.1	 
	“Fundamental Change Purchase Notice”
	 	 	11.1	(b)
	“Fundamental Change Purchase Price”
	 	 	11.1	 
	“Global Securities”
	 	 	2.2	(b)
	“Global Security Legend”
	 	 	2.3	 
	“Initial Dividend Rate”
	 	 	12.2	(d)
	“judgment default provision”
	 	 	6.1	 
	“Legal Holiday”
	 	 	13.8	 
	“MD&A”
	 	 	3.2	(a)
	“Obligations”
	 	 	10.1	 
	“Paying Agent”
	 	 	2.5	 
	“Payment Default”
	 	 	6.1	 
	“Purchase Date”
	 	 	11.2	(a)
	“Purchase Notice”
	 	 	11.2	(a)(1)
	“Registrar”
	 	 	2.5	 
	“Restricted Securities”
	 	 	2.3	(a)
	“Restricted Securities Legend”
	 	 	2.3	(a)
	“Settlement Amount”
	 	 	12.1	(c)
	“Special Interest Payment Date”
	 	 	2.15	(a)
	“Special Record Date”
	 	 	2.15	(a)
	“Spin-Off”
	 	 	12.2	(c)
	“Successor Company”
	 	 	4.1	 






          SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the
mandatory provisions of the TIA which are incorporated by reference in and made a part of this
Indenture. The following TIA terms have the following meanings:




          “Commission” means the SEC.




          “indenture securities” mean the Securities.




          “indenture security holder” means a Securityholder.




          “indenture to be qualified” means this Indenture.




          “indenture trustee” or “institutional trustee” means the Trustee.




          “obligor” on the indenture securities means the Company and any other obligor on the indenture
securities.




          All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by
reference to another statute or defined by SEC rule have the meanings assigned to them by such
definitions.










 



13




          SECTION 1.4. Rules of Construction. Unless the context otherwise requires:





          (1) a term has the meaning assigned to it;




          (2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;




          (3) “or” is not exclusive;




          (4) “including” means including without limitation;




          (5) words in the singular include the plural and words in the plural include the
singular;




          (6) the principal amount of any noninterest bearing or other discount security at any
date shall be the principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP; and




          (7) the principal amount of any Preferred Stock shall be (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock, whichever is greater.



ARTICLE II




The Securities




          SECTION 2.1. Title and Terms. (a) The Securities shall be known and designated as the “2%
Convertible Senior Notes due 2036” of the Company. The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is limited to $250.0 million, except
for Securities authenticated and delivered upon registration of, transfer of, or in exchange for,
or in lieu of other Securities pursuant to Section 2.8, 2.9, 2.10,
2.11, 2.13, 5.8, 9.5, 11.3 or 12.1. The Securities
shall be issuable in denominations of $1,000 or integral multiples thereof.




          (b) The Securities shall mature on June 1, 2036.




          (c) Interest shall accrue from and including May 17, 2006 until the principal thereof is paid
or made available for payment. Interest shall be payable semi-annually in arrears on June 1 and
December 1 in each year, commencing December 1, 2006.




          (d) In addition, interest, if any (“Contingent Interest”), will accrue on each Security during
any six-month period from June 1 to and including November 30 and from December 1 to and including
May 31, as appropriate, commencing with the six-month period beginning June 1, 2013, if the average
Securities Price for the Applicable Five Trading Day Period with respect to such interest period
equals 120% or more of $1,000 principal amount of Securities. The amount of Contingent Interest
payable per $1,000 principal amount of Securities in respect of any interest period shall equal
0.125% of the average Securities Price for the







 



14




Applicable Five Day Trading Period with respect to
such interest period. Contingent interest, if any, will accrue from June 1 or December 1, as
applicable, and will be payable on the next succeeding December 1 or June 1 interest payment date,
as the case may be. Contingent interest will be paid to the person in whose name a Security is
registered at the close of business on May 15 or November 15, as the case may be, immediately
preceding the relevant interest payment date on which Contingent Interest is payable. All payments
of Contingent Interest shall be made in cash.




          Upon determination that Holders will be entitled to receive Contingent Interest during an
interest period, on or prior to the first day of such interest period, the Company shall notify the
Trustee and issue a press release through PR Newswire Association LLC, Dow Jones & Company, Inc. or
Bloomberg Business News containing such information with respect to the payment of Contingent
Interest or publish such information on its web site or through such other public medium as the
Company may use at that time.




          (e) Except as provided in the last sentence of this Section 2.1(e), a Holder of any
Security at the close of business on a Regular Record Date shall be entitled to receive interest
(including Contingent Interest and Additional Interest, if any), on such Security on the
corresponding interest payment date. Holders of Securities at the close of business on a Regular
Record Date will receive payment of interest (including any Contingent Interest and Additional
Interest) payable on the corresponding interest payment date notwithstanding the conversion of such
Securities at any time after the close of business on such Regular Record Date. Securities
surrendered for conversion during the period from the close of business on any Regular Record Date
to the opening of business on the corresponding interest payment date (except for (i) Securities in
respect of which a Redemption Date has been declared that falls within this period or on such
interest payment date, (ii) Securities in respect of which a Fundamental Change Purchase Date has
been established that falls within this period or on such interest payment day or (iii) to the
extent of any overdue interest, if any overdue interest exists at the time of conversion with
respect to a Security) must be accompanied by payment of an amount equal to the interest (including
any Contingent Interest or Additional Interest) that the Holder is to receive on the Securities.
Except where Securities surrendered for conversion must be accompanied by payment as described
above, no interest or Contingent Interest or Additional Interest on converted Securities will be
payable by the Company on any interest payment date subsequent to the date of conversion.
Notwithstanding the foregoing, a Holder shall be entitled to receive accrued and unpaid interest,
including any Contingent Interest and Additional Interest in respect of a Security (x) if the
Company calls such Security for redemption and such Holder converts its Security prior to the
Redemption Date, (y) if the Company establishes a Fundamental Change Purchase Date during the
period from the close of business on any Regular Record Date to the opening of business on the
corresponding interest payment date that falls within this period or on such interest payment day
and such Holder converts its Security prior to the Fundamental
Change Purchase Date or (z) to the extent of any overdue interest, if any overdue interest
exists at the time of conversion with respect to a Security.




          (f) Principal of and interest (including Contingent Interest and Additional Interest, if any),
on, Global Securities shall be payable to DTC in immediately available funds.










 



15




          (g) Principal on Definitive Securities shall be payable in immediately available funds or, at
the option of the Company, at the office or agency of the Company maintained for such purpose,
initially the corporate trust office of the Trustee. Interest (including Contingent Interest and
Additional Interest, if any), on Definitive Securities will be payable (i) to Holders having an
aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these
Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either
by check mailed to each Holder or, upon application by a Holder to the Registrar not later than the
relevant Record Date, by wire transfer in immediately available funds to that Holder’s account
within the United States, which application shall remain in effect until the Holder notifies, in
writing, the Registrar to the contrary.




          (h) The Securities shall be redeemable at the option of the Company as provided in Article
V.




          (i) The Securities shall be repurchaseable by the Company at the option of Holders as provided
in Article XI.




          (j) The Securities shall be convertible at the option of the Holders as provided in
Article XII.




          (k) The Securities shall be jointly and severally guaranteed by the Subsidiary Guarantors as
provided in Article X.




          SECTION 2.2. Form of Securities.




          (a) Except as otherwise provided pursuant to this Section 2.2, the Securities are
issuable in fully registered form without coupons in substantially the form of Exhibit A
hereto, with such applicable legends as are provided for in Section 2.3. The Securities
are not issuable in bearer form. The terms and provisions contained in the form of Security shall
constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. Any of the Securities may have such letters,
numbers or other marks of identification and such notations, legends and endorsements as the
officers executing the same may approve (execution thereof to be conclusive evidence of such
approval) and as are not inconsistent with the provisions of this Indenture, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange or automated quotation system on which the Securities may be
listed or designated for issuance, or to conform to usage.




          (b) The Securities are being offered and sold by the Company pursuant to a purchase agreement.
Securities offered and sold to QIBs in accordance with Rule 144A, as provided in such purchase
agreement, shall be issued initially in the form of one or more
permanent global Securities in fully registered form without interest coupons, substantially
in the form of Exhibit A hereto, with the applicable legends as provided in Section
2.3 (each a “Global Security” and collectively the “Global Securities”). Each Global Security
shall be duly executed by the Company and authenticated and delivered by the Trustee, and shall be
registered in the name of DTC or its nominee and retained by the Trustee, as Custodian, at its
corporate







 



16




trust office, for credit to the accounts of the Agent Members holding the Securities
evidenced thereby. 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, as Custodian, and of
DTC or its nominee, as hereinafter provided.




          (c) Definitive Securities may be exchanged for interests in Global Securities
pursuant to Section 2.9.




          SECTION 2.3. Legends




          (a) Restricted Securities Legends. Each Security issued hereunder shall, upon
issuance, bear the legend set forth in Section 2.3(a)(1), and each Common Stock certificate
representing shares of the Common Stock issued upon conversion of any Security issued hereunder,
shall, upon issuance, bear the legend set forth in Section 2.3(a)(2) (each such legend, a
“Restricted Securities Legend”), and such legend shall not be removed except as provided in
Section 2.3(a)(3). Each Security that bears or is required to bear the Restricted
Securities Legend set forth in Section 2.3(a)(1) (together with each Common Stock
certificate representing shares of the Common Stock issued upon conversion of such Security that
bears or is required to bear the Restricted Securities Legend set forth in Section
2.3(a)(2), collectively, the “Restricted Securities”) shall be subject to the restrictions on
transfer set forth in this Section 2.3(a) (including the Restricted Securities Legend set
forth below), and the Holder of each such Restricted Security, by such Holder’s acceptance thereof,
shall be deemed to have agreed to be bound by all such restrictions on transfer.




          As used in Section 2.3(a), the term “transfer” encompasses any sale, pledge, transfer
or other disposition whatsoever of any Restricted Security.




          (1) Restricted Securities Legend for Securities.




          Except as provided in Section 2.3(a)(3), any certificate evidencing such Security (and
all Securities issued in exchange therefor or substitution thereof, other than stock certificates
representing shares of the Common Stock, if any, issued upon conversion thereof which shall bear
the legend set forth in Section 2.3(a)(2), if applicable) shall bear a Restricted
Securities Legend in substantially the following form:



“THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY:








 



17



THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT WITHIN THE
LATER OF (X) TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY AND (Y) THREE MONTHS AFTER IT
CEASES TO BE AN AFFILIATE (WITHIN THE MEANING OF RULE 144 ADOPTED UNDER THE SECURITIES ACT) OF THE
ISSUER, RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE
UPON CONVERSION OF SUCH SECURITY, EXCEPT (A) TO THE ISSUER; (B) UNDER A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (C) TO A PERSON THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES
ACT) THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL
BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, ALL IN
COMPLIANCE WITH RULE 144A (IF AVAILABLE); (D) THROUGH OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; OR (E) UNDER ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (2) IT WILL,
PRIOR TO ANY TRANSFER OF THIS SECURITY WITHIN THE LATER OF (X) TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY AND (Y) THREE MONTHS AFTER IT CEASES TO BE AN AFFILIATE
(WITHIN THE MEANING OF RULE 144 ADOPTED UNDER THE SECURITIES ACT) OF THE ISSUER, FURNISH TO THE
TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED
PURSUANT TO THE INDENTURE 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. AS
USED HEREIN, THE








 



18


 TERM “UNITED STATES” HAS THE MEANING GIVEN TO IT BY REGULATION S UNDER THE
SECURITIES ACT.”





     (2) Restricted Securities Legend for the Common Stock Issued Upon Conversion of the
Securities.



          Each stock certificate representing Common Stock issued upon conversion of the Securities
bearing the legend set forth in Section 2.3(a)(1) will bear the following legend (unless
such Common Stock has been sold pursuant to Rule 144 or pursuant to a registration statement that
has been declared effective under the Securities Act):



“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT WITHIN THE
LATER OF (X) TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES UPON THE CONVERSION OF WHICH THIS
SECURITY WAS ISSUED AND (Y) THREE MONTHS AFTER IT CEASES TO BE AN AFFILIATE (WITHIN THE MEANING OF
RULE 144 ADOPTED UNDER THE SECURITIES ACT) OF THE ISSUER, RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY, EXCEPT (A) TO THE ISSUER; (B) UNDER A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (C) TO A PERSON THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT) THAT IS
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER AND TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE
WITH RULE 144A (IF AVAILABLE); (D) THROUGH OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; OR (E) UNDER ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (2) IT WILL, PRIOR TO ANY TRANSFER OF
THIS SECURITY WITHIN THE LATER OF (X) TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES UPON THE
CONVERSION OF WHICH THIS SECURITY WAS ISSUED AND (Y) THREE MONTHS AFTER IT CEASES TO BE AN
AFFILIATE (WITHIN THE MEANING OF RULE 144 ADOPTED UNDER THE SECURITIES ACT) OF THE ISSUER, FURNISH
TO THE TRANSFER AGENT AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
MAY BE REQUIRED 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. AS USED HEREIN, THE TERM “UNITED STATES” HAS THE MEANING GIVEN TO IT BY REGULATIONS UNDER THE SECURITIES ACT.”





     (3) Removal of the Restricted Securities Legends.



          Each Security and each Common Stock certificate representing shares of the Common Stock issued
upon conversion of any Security (other than a Common Stock certificate










 



19



representing shares of the
Common Stock issued upon conversion of a Security that previously has been sold pursuant
to a registration statement that has been declared effective under the Securities Act and which
continues to be effective at the time of such sale) shall bear the applicable Restricted Securities
Legend set forth in Section 2.3(a)(1) or 2.3(a)(2), as the case may be, until the
earlier of:




               (i) the date which is the later of two years after the original issuance date of such Security
and three months after a Holder ceased to be an affiliate of the Company; and



               (ii) the date such Security has, or such shares of the Common Stock have been sold pursuant to
a registration statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such sale).


The Holder must give notice thereof to the Trustee and any transfer agent for the Common Stock, as
applicable.




          Notwithstanding the foregoing, the Restricted Securities Legend may be removed from any
Security or any Common Stock certificate representing shares of the Common Stock issued upon
conversion of any Security if there is delivered to the Company such satisfactory evidence, which
may include an opinion of independent counsel, as may be reasonably required by the Company, that
neither such legend nor the restrictions on transfer set forth therein are required to ensure that
transfers of such Security or shares of the Common Stock issued upon conversion of Securities, as
the case may be, will not violate the registration requirements of the Securities Act or the
qualification requirements under any state securities laws. Upon provision of such satisfactory
evidence, at the written direction of the Company, (i) in the case of a Security, the Trustee shall
authenticate and deliver in exchange for such Security another Security or Securities having an
equal aggregate principal amount that does not bear such legend or (ii) in the case of a Common
Stock certificate representing shares of the Common Stock, the transfer agent for the Common Stock
shall authenticate and deliver in exchange for the Common Stock certificate or certificates
representing such shares of Common Stock bearing such legend, one or more new Common Stock
certificates representing a like aggregate number of shares of Common Stock that do not bear such
legend. If the Restricted Securities Legend has been removed from a Security or Common Stock
certificates representing shares of the Common Stock issued upon conversion of any Security as
provided above, no other Security issued in exchange for all or any part of such Security or Common
Stock certificates representing shares of the Common Stock issued upon conversion of such Security
shall bear such legend, unless the Company has reasonable cause to believe that such other Security
is a “restricted security” (or such shares of Common Stock are “restricted securities”) within the
meaning of Rule 144 and instructs the Trustee in writing to cause a Restricted Securities Legend to
appear thereon.




          Any Security (or Security issued in exchange or substitution therefor) as to which such
restrictions on transfer shall have expired in accordance with their terms or as to which the
conditions for removal of the Restricted Securities Legend set forth in Section 2.3(a)(1)
as set forth therein have been satisfied may, upon surrender of such Security for exchange to the
Registrar in accordance with the provisions of Section 2.8, be exchanged for a new Security
or







 



20




Securities, of like tenor and aggregate principal amount, which shall not bear the Restricted
Securities Legend required by Section 2.3(a)(1).




          Any Common Stock certificate representing shares of the Common Stock issued upon conversion of
any Security as to which such restrictions on transfer shall have expired in accordance with their
terms or as to which the conditions for removal of the Restricted Securities Legend set forth in
Section 2.3(a)(2) as set forth therein have been satisfied may, upon surrender of the
Common Stock certificates representing such shares of Common Stock for exchange in accordance with
the procedures of the transfer agent for the Common Stock, be exchanged for a new Common Stock
certificate or certificates representing a like aggregate number of shares of Common Stock, which
shall not bear the Restricted Securities Legend required by Section 2.3(a)(2).





     (4) Global Security Legend



          Each Global Security shall also bear the following legend (the “Global Security Legend”) on
the face thereof:



“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



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.”





     (5) Legend for Definitive Securities



          Definitive Securities, in addition to the legend set forth in Section 2.3(a)(1), will
also bear a legend substantially in the following form:



“THIS SECURITY WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A GLOBAL SECURITY
UNLESS THE HOLDER OF THIS SECURITY, SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO SECURITIES.”




          SECTION 2.4. Execution and Authentication. One Officer shall sign the Securities for the Company
by manual or facsimile signature. If an Officer whose signature is on







 



21




a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.




          A Security shall not be valid until an authorized signatory of the Trustee manually
authenticates the Security. The signature of the Trustee on a Security shall be conclusive
evidence that such Security has been duly and validly authenticated and issued under this
Indenture. A Security shall be dated the date of its authentication.




          At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities executed by the Company to the Trustee for authentication, together
with a written order of the Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company (the “Company Order”) for the authentication and
delivery of such Securities, and the Trustee in accordance with such Company Order shall
authenticate and deliver such Securities as in this Indenture
provided and not otherwise. The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is limited to $250.0 million outstanding, except for Securities authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities of
the same class pursuant to Section 2.8, 2.9, 2.10, 2.11,
2.13, 5.8, 9.5, 11.3 or 12.1. All Securities issued on the
Issue Date shall be identical in all respects other than issue dates, the date from which interest
accrues and any changes relating thereto. Notwithstanding anything to the contrary contained in
this Indenture, subject to Section 2.12, all Securities issued under this Indenture shall
vote and consent together on all matters as one class and no series of Securities will have the
right to vote or consent as a separate class on any matter.




          The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the
Company to authenticate the Securities. Initially, the Trustee will act as Authenticating Agent.
Any such instrument shall be evidenced by an instrument signed by a Trust Officer of the Trustee, a
copy of which shall be furnished to the Company. Unless limited by the terms of such appointment,
any such Authenticating Agent may authenticate Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent. An Authenticating Agent has the same rights as any Registrar, Paying Agent
or agent for service of notices and demands.




          In case the Company or any Subsidiary Guarantor, pursuant to Article IV or Section
10.2, shall be consolidated or merged with or into any other Person or shall convey, transfer,
lease or otherwise dispose of its properties and assets substantially as an entirety to any Person,
and the successor Person resulting from such consolidation, or surviving such merger, or into which
the Company or any Subsidiary Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article IV, any of
the Securities authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of the successor Person with such
changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as
the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon
Company Order of the successor Person, shall authenticate and deliver Securities as specified in
such order for the purpose of such exchange. If Securities shall at any time be







 



22




authenticated and
delivered in any new name of a successor Person pursuant to this Section 2.4 in exchange or
substitution for or upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the exchange of all Securities
at the time outstanding for Securities authenticated and delivered in such new name.




          SECTION 2.5. Registrar and Paying Agent. The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an
office or agency where Securities may be presented for payment (the “Paying Agent”). The Company
shall cause each of the Registrar and the Paying Agent to maintain an office or agency in the
Borough of Manhattan, The City of New York. The Registrar shall keep a register of the Securities
and of their transfer and exchange (the “Securities Register”). The Company may have one or more
co-registrars and one or more additional paying agents. The term “Paying Agent” includes any
additional paying agent and the term “Registrar” includes any co-registrar.




          The Company shall enter into an appropriate agency agreement with any Registrar, 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 each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.7. The Company or any of its
domestically organized, wholly owned Subsidiaries may act as Paying Agent, Registrar, co-registrar
or transfer agent.




          The Company initially appoints the Trustee as Registrar and Paying Agent for the Securities.
The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or
Paying Agent and to the Trustee; provided, however, that no such removal shall become effective
until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement
entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above.
The Registrar or Paying Agent may resign at any time upon written notice to the Company and the
Trustee.




          SECTION 2.6. Paying Agent To Hold Money in Trust. By no later than 10:00 a.m., New York City time,
on the date on which any principal of or interest (including Contingent Interest and Additional
Interest, if any), on any Security is
due and payable, the Company shall deposit with the Paying Agent a sum sufficient in
immediately available funds to pay such principal or interest (including Contingent Interest and
Additional Interest, if any), when due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by such Paying Agent for the payment of principal of
or interest (including Contingent Interest and Additional Interest, if any), on the Securities and
shall notify the Trustee in writing of any default by the Company or any Subsidiary Guarantor in
making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time
may







 



23




require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and
to account for any funds disbursed by such Paying Agent. Upon complying with this Section
2.6, the Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.




          SECTION 2.7. 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 and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar,
or to the extent otherwise required under the TIA, the Company, on its own behalf and on behalf of
each of the Subsidiary Guarantors, shall furnish or cause the Registrar to furnish to the Trustee,
in writing at least seven 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 and the Company shall otherwise
comply with TIA § 312(a).




          SECTION 2.8. General Provisions Relating to Transfer and Exchange. The Securities are issuable
only in registered form. A Holder may transfer a Security only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying with the terms of
this Indenture. No such transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon, final acceptance and registration of the transfer by the Registrar in
the Securities Register. Furthermore, any Holder of a Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interests in such Global Security may be
effected only through a book-entry system maintained by the Holder of such Global Security (or its
agent) and that ownership of a beneficial interest in the Global Security shall be required to be
reflected in a book-entry.




          When Securities are presented to the Registrar with a request to register the transfer or to
exchange them for an equal aggregate principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder thereof or by an
attorney who is authorized in writing to act on behalf of the Holder). Subject to Section
2.4, to permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar’s request. No service charge shall
be made for any registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or other similar
governmental charge payable upon exchanges in connection with which a Security is issued to a
Person other than the Holder submitting the Security for exchange).




          Neither the Company nor the Registrar shall be required to exchange or register a transfer of
any Securities:




          (a) for a period of 15 days prior to the mailing of a notice of redemption of Securities
selected for redemption under Article V;










 



24




          (b) so selected for redemption or, if a portion of any Security is selected for redemption,
the portion thereof selected for redemption; or




          (c) surrendered for conversion or, if a portion of any Security is surrendered for conversion,
the portion thereof surrendered for conversion.




          Each Holder of a Security agrees to indemnify the Company and the Trustee against any
liability that may result from the transfer, exchange or assignment of such Holder’s Security in
violation of any provision of this Indenture and/or applicable United States federal or state
securities law.




          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 beneficial owners
of any Global Security) other than to require delivery of such certificates and other documentation
or evidence as are expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance as to form with the
express requirements hereof.




          SECTION 2.9. Book-Entry Provisions for the Global Securities. (a) The Global Securities initially
shall:





               (i) be registered in the name of DTC (or a nominee thereof);




               (ii) be delivered to the Trustee as custodian for DTC;




               (iii) bear the Restricted Securities Legend set forth in Section 2.3(a)(1); and




               (iv) bear the Global Security Legend set forth in Section 2.3(b).



          Members of, or participants in, DTC (“Agent Members”) shall have no rights under this
Indenture with respect to any Global Security held on their behalf by DTC, or the Trustee as its
custodian, or under such Global Security, and DTC may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing contained
herein shall prevent the Company, the Trustee or any agent of the Company or Trustee from giving
effect to any written certification, proxy or other authorization furnished by DTC or impair, as
between DTC and the Agent Members, the operation of customary practices governing the exercise of
the rights of a Holder of any Security. With respect to any Global Security deposited on behalf of
the subscribers for the Securities represented thereby with the Trustee as custodian for DTC for
credit to their respective accounts (or to such other accounts as they may direct) at Euroclear or
Clearstream, the provisions of the “Operating Procedures of the Euroclear System” and the “Terms
and Conditions Governing Use of Euroclear” and the “Management Regulations” and “Instructions to
Participants” of Clearstream, respectively, shall be applicable to the Global Securities.










 



25




          (b) The Holder of a Global Security may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the Securities.




          (c) A Global Security may not be transferred, in whole or in part, to any Person other than
DTC (or a nominee thereof), and no such transfer to any such other Person may be registered.
Beneficial interests in a Global Security may be transferred in accordance with the rules and
procedures of DTC and the provisions of Section 2.10.




          (d) If at any time:





               (i) DTC notifies the Company in writing that it is unwilling or unable to continue to act as
depositary for the Global Securities and a successor depositary for the Global Securities is not
appointed by the Company within 90 days of such notice;




               (ii) DTC ceases to be registered as a “clearing agency” under the Exchange Act and a successor
depositary for the Global Securities is not appointed by the Company within 90 days of such
cessation;




               (iii) the Company, at its option, notifies the Trustee in writing that it elects to cause the
issuance of the Definitive Securities under this Indenture in exchange for all or any part of the
Securities represented by a Global Security or Global Securities, subject to the procedures of DTC;
or




               (iv) an Event of Default has occurred and is continuing and the Registrar has received a
request from DTC for the issuance of Definitive Securities in exchange for such Global Security or
Global Securities;


DTC shall surrender such Global Security or Global Securities to the Trustee for cancellation and
the Company shall execute, and the Trustee, upon receipt of an Officers’ Certificate and Company
Order for the authentication and delivery of Securities, shall authenticate and deliver in exchange
for such Global Security or Global Securities, Definitive Securities in an aggregate principal
amount equal to the aggregate principal amount of such Global Security or Global Securities. Such
Definitive Securities shall be registered in such names as DTC shall identify in
writing as the beneficial owners of the Securities represented by such Global Security or Global
Securities (or any nominee thereof).




          (e) Notwithstanding the foregoing, in connection with any transfer of beneficial interests in
a Global Security to the beneficial owners thereof pursuant to Section 2.9(d), the
Registrar shall reflect on its books and records the date and a decrease in the principal amount of
such Global Security in an amount equal to the principal amount of the beneficial interests in such
Global Security to be transferred.




          SECTION 2.10. Special Transfer Provisions. Unless a Security is (i) transferred after the time
period referred to in Rule 144(k) under the Securities Act or (ii) sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which







 



26




continues to be
effective at the time of such sale), the following provisions shall apply to any sale, pledge or
other transfer of Securities:




          (a) Transfer of Securities to a QIB.




          The following provisions shall apply with respect to the registration of any proposed transfer
of Securities to a QIB:





          (1) If the Securities to be transferred consist of a beneficial interest in the Global
Securities, the transfer of such interest may be effected only through the book-entry
systems maintained by DTC and, to the extent applicable, Euroclear and Clearstream.




          (2) If the Securities to be transferred consist of Definitive Securities, the Registrar
shall register the transfer if such transfer is being made by a proposed transferor who has
checked the box provided for on the form of Security stating (or has otherwise advised the
Company and the Registrar in writing) that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed a certification stating or has
otherwise advised the Company and the Registrar in writing that:




               (A) it is purchasing the Securities for its own account or an account with respect to
which it exercises sole investment discretion, in each case for investment and not with a
view to distribution;




               (B) it and any such account is a QIB within the meaning of Rule 144A;




               (C) it is aware that the sale to it is being made in reliance on Rule 144A;




               (D) it acknowledges that it has received such information regarding the Company as it
has requested pursuant to Rule 144A or has determined not to request such information; and




               (E) it is aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A.



          In addition, the Registrar shall reflect on its books and records the date and an increase in
the principal amount of the Global Securities in an amount equal to the aggregate principal amount
of the Definitive Securities to be transferred, and the Trustee shall cancel the Definitive
Securities so transferred.




          (b) Other Exchanges.




          In the event that Global Securities are exchanged for Securities in definitive registered form
pursuant to Section 2.9 prior to the effectiveness of a Shelf Registration Statement with
respect to such Securities, such Securities may be exchanged only in accordance







 



27




with the provisions
of clause (a) above (including the certification requirements intended to ensure that such
transfers comply with Rule 144A) and such other procedures as may from time to time be adopted by
the Company.




          (c) General.




          By its acceptance of any Security bearing the Restricted Securities Legend, each Holder of
such a Security acknowledges the restrictions on transfer of such Security set forth in this
Indenture and agrees that it will transfer such Security only as provided in this Indenture. The
Registrar shall not register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. The Registrar shall be
entitled to receive and rely on written instructions from the Company verifying that such transfer
complies with such restrictions on transfer. In connection with any transfer of Securities, each
Holder agrees by its acceptance of the Securities to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that the Registrar shall
not be required to determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.




          The Registrar shall retain copies of all certifications, letters, notices and other written
communications received pursuant to Section 2.9 hereof or this Section 2.10. The
Company shall have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable written notice to the
Registrar.




          SECTION 2.11. Mutilated, Destroyed, Lost or Stolen Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met,
such that the Securityholder (a) satisfies the Company or the Trustee within a reasonable time
after such Securityholder has notice of such loss, destruction or wrongful taking and the Registrar
has not registered a transfer prior to receiving such notification, (b) makes such request to the
Company or Trustee prior to the
Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform
Commercial Code and (c) satisfies any other reasonable requirements of the Trustee. Such Holder
shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which any of
them may suffer if a Security is replaced, and, in the absence of notice to the Company, any
Subsidiary Guarantor or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon Company Order the Trustee shall authenticate and make available
for delivery, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or
stolen Security, a new Security of like tenor and principal amount, bearing a number not
contemporaneously outstanding.










 



28




          In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a new Security, pay
such Security.




          Upon the issuance of any new Security under this Section 2.11, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of the Trustee) in
connection therewith.




          Every new Security issued pursuant to this Section 2.11 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional contractual obligation
of the Company, any Subsidiary Guarantor (if applicable) and any other obligor upon the Securities,
whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.




          The provisions of this Section 2.11 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.




          SECTION 2.12. Outstanding Securities. Securities outstanding at any time are all Securities
authenticated by the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.12 as not outstanding. A Security does
not cease to be outstanding in the event the Company or a Subsidiary of the Company holds the
Security, provided, however, that (i) for purposes of determining which are outstanding for consent
or voting purposes hereunder, the provisions of Section 13.6 shall apply and (ii) in
determining whether the Trustee shall be protected in making a determination whether the Holders of
the requisite principal amount of outstanding Securities are present at a meeting of Holders of
Securities for quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying
upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee
actually knows to be held by the Company or an Affiliate of the Company shall not be considered
outstanding.




          If a Security is replaced or paid pursuant to Section 2.11, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced
Security is held by a bona fide purchaser.




          If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a
Redemption Date or maturity date money sufficient to pay all principal and interest payable on that
date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on them ceases to accrue.










 



29




          SECTION 2.13. Temporary Securities. In the event that Definitive Securities are to be issued under
the terms of this Indenture, until such Definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities
upon surrender of the temporary Securities at any office or agency maintained by the Company for
that purpose and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee
shall authenticate and make available for delivery in exchange therefor, one or more Definitive
Securities representing an equal principal amount of Securities. Until so exchanged, the Holder of
temporary Securities shall in all respects be entitled to the same benefits under this Indenture as
a Holder of Definitive Securities.




          SECTION 2.14. Cancellation. The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Securities surrendered for registration of transfer, exchange, payment or
cancellation and dispose of such Securities in accordance with its internal policies and customary
procedures including delivery of a certificate (a “Certificate of Destruction”) describing such
Securities disposed (subject to the record retention requirements of the Exchange Act) or deliver
canceled Securities to the Company pursuant to written direction by an Officer. The Company may
not issue new Securities to replace Securities it has paid or delivered to the Trustee for
cancellation for any reason other than in connection with a transfer or exchange.




          At such time as all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall
be returned by DTC to the Trustee 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
Definitive Securities, transferred in exchange for an interest in another Global
Security, redeemed, repurchased 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.




          SECTION 2.15. Payment of Interest; Defaulted Interest. Interest (including any Contingent Interest
and Additional Interest) on any Security which is payable, and is punctually paid or duly provided
for, on any interest payment date shall be paid to the Person in whose name such Security (or one
or more predecessor Securities) is registered at the close of business on the Regular Record Date
for such payment at the office or agency of the Company maintained for such purpose pursuant to
Section 2.5.




          Any interest (including any Contingent Interest and Additional Interest) on any Security which
is payable, but is not paid when the same becomes due and payable and such nonpayment continues for
a period of 30 days shall forthwith cease to be payable to the Holder







 



30




on the Regular Record Date,
and such defaulted interest and (to the extent lawful) interest on such defaulted interest
(including any Contingent Interest and Additional Interest) at the rate borne by the Securities
(such defaulted interest (including any Contingent Interest and Additional Interest) and interest
thereon herein collectively called “Defaulted Interest”) shall be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:




          (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities (or their respective predecessor Securities) are registered at the close of
business on a Special Record Date (as defined below) for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and the date (not less than
30 days after such notice) of the proposed payment (the “Special Interest Payment Date”), and at
the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a record date (the “Special
Record Date”) for the payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date
and Special Interest Payment Date therefor to be given in the manner provided for in Section
13.2, not less than 10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor
having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to
the Persons in whose names the Securities (or their respective predecessor Securities) are
registered at the close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).




          (b) The Company may make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.




          Subject to the foregoing provisions of this Section 2.15, each Security delivered
under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other
Security shall carry the rights to interest (including any Contingent Interest and Additional
Interest) accrued and unpaid, and to accrue, which were carried by such other Security.




          SECTION 2.16. Computation of Interest. Interest (including any Contingent Interest and Additional
Interest) on the Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.




          SECTION 2.17. CUSIP and ISIN Numbers. The Company in issuing the Securities may use “CUSIP” and
“ISIN” numbers (if then generally in use) and, if so, the Trustee







 



31




shall use “CUSIP” and “ISIN”
numbers in notices of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that reliance may be
placed only on the other identification numbers printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such CUSIP or ISIN numbers. The Company
shall promptly notify the Trustee in writing of any change in the CUSIP and ISIN numbers.




ARTICLE III




Covenants




          SECTION 3.1. Payment of Securities. The Company shall promptly pay the principal of and interest
(including any Contingent Interest and Additional Interest, if any), on the Securities on the dates
and in the manner provided in the Securities and in this Indenture. Principal and interest
(including any Contingent Interest and Additional Interest), shall be considered paid on the date
due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture
immediately available funds sufficient to pay all principal and interest (including any Contingent
Interest and Additional Interest), then due and the Trustee or the Paying Agent, as the case may
be, is not prohibited from paying such money to the Securityholders on that date pursuant to the
terms of this Indenture.




          The Company shall pay interest on overdue principal at the rate specified therefor in the
Securities, and it shall pay interest on overdue installments of interest at the same rate to the
extent lawful.




          Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the
extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by
the United States of America from principal or interest (including any Contingent Interest and
Additional Interest), payments hereunder. If the Company pays withholding taxes on behalf of a
Holder as a result of an adjustment to the Conversion Rate, the Company may, at its option, set off
such payment against payments of cash and shares of Common Stock on the Securities




          SECTION 3.2. Financial Statements. In the event and for so long as the Company is not subject to
Section 13 or 15(d) of the Exchange Act, it shall file with the Trustee and cause to be mailed to
each Holder at such Holder’s registered address the following:




          (a) within 120 days after the end of each fiscal year, its consolidated balance sheets as of
the close of such fiscal year and the preceding fiscal year and related consolidated statements of
income and shareholders’ equity and cash flows, showing the financial condition of the Company and
its consolidated Subsidiaries as of the close of such fiscal year and the two preceding fiscal
years, all audited by an independent public accounting firm of recognized national standing and
accompanied by an opinion of such accounting firm to the effect that such financial statements
fairly present the financial condition and results of operations of the Company and its
consolidated Subsidiaries in accordance with GAAP consistently applied, except as disclosed in the
notes thereto. Such balance sheets and related statements shall be







 



32




substantially comparable in
detail to the audited balance sheets and related statements incorporated by reference in the
Company’s Offering Memorandum and shall be accompanied by a “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” (“MD&A”) substantially comparable in detail to
the MD&A incorporated by reference in the Offering Memorandum with respect to the Company’s fiscal
years ended December 31, 2003, 2004 and 2005;




          (b) within 60 days after the end of each of the first three fiscal quarters of each fiscal
year, its consolidated balance sheets and related consolidated statements of income and cash flows,
stating the financial condition of the Company and its consolidated Subsidiaries as of the close of
such fiscal quarter and as of the end of the preceding fiscal year (and the corresponding quarter
in the preceding fiscal year) and the then-elapsed portion of such fiscal year (and the
corresponding period in the preceding fiscal year). Such balance sheets and related statements
shall be prepared in accordance with GAAP consistently applied except as disclosed in the notes
thereto and shall be accompanied by an MD&A substantially comparable in detail to the MD&A
incorporated by reference in the Offering Memorandum;




          (c) the Company shall deliver to the Holder, upon request of such Holder, as many copies of
the foregoing as may be reasonably requested by such Holder; and




          (d) within the period prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees, upon the request of any Holder or beneficial holder of the Securities or the
Common Stock issued upon conversion thereof, to make available to such
Holder or beneficial holder of such Securities or Common Stock in connection with any sale
thereof and any prospective purchaser of Securities or Common Stock designated by such Holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under the Securities Act
and it will take such further action as any Holder or beneficial holder of such Securities or
Common Stock may reasonably request, all to the extent required from time to time to enable such
Holder or beneficial holder to sell its Securities or Common Stock without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A, as such Rule may be
amended from time to time.




          Delivery of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to
rely exclusively on Officers’ Certificates).




          SECTION 3.3. Future Subsidiary Guarantors; Release of Guarantees. After the Issue Date, the
Company will cause (i) each Subsidiary (other than a Subsidiary that does not guarantee obligations
under the Senior Credit Obligations, the 2013 Notes, 2023 Notes and the 2035 Notes) created or
acquired by the Company or one or more of its Subsidiaries to execute and deliver to the Trustee a
Subsidiary Guarantee pursuant to which such Subsidiary Guarantor will unconditionally Guarantee, on
a joint and several basis, the full and prompt payment of the principal of and interest (including
any Contingent Interest and Additional Interest), on the Securities on a senior basis; provided
that a Subsidiary Guarantee from any Subsidiary shall be







 



33




released upon the release of such
Subsidiary from any liability under (x) the indentures relating to the 2013 Notes, the 2023 Notes
and the 2035 Notes or any related Guarantee or similar obligation and (y) any Senior Credit
Obligations and any Guarantee or similar obligation in respect thereof and any Guarantee or similar
obligation in respect thereof; provided that such release of a Subsidiary Guarantor shall not occur
in the event such Subsidiary Guarantor is required to deliver a Subsidiary Guarantee in accordance
with the paragraph below and then such Subsidiary Guarantee shall only be released in accordance
with the paragraph below. Upon notice by the Company to the Trustee of the occurrence of the
events described in either of the two preceding sentences, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Subsidiary Guarantor from its
obligations under the Subsidiary Guarantee.




          The Company will not permit any Subsidiary to Guarantee the payment of any Debt of the Company
unless (i) such Subsidiary simultaneously executes and delivers a supplemental indenture to the
Indenture providing for a Guarantee of payment of the Securities by such Subsidiary; (ii) such
Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of,
any rights of reimbursement, indemnity or subrogation or any other rights against the Company or
any Subsidiary as a result of any payment by such Subsidiary under its Subsidiary Guarantee; and
(iii) such Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that (A) the
supplemental indenture has been duly executed and authorized and (B) the supplemental indenture
constitutes a valid, binding and enforceable obligation of such Subsidiary, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to
fraudulent transfers) and except insofar as enforcement thereof is subject to general
principles of equity; provided that such Subsidiary Guarantee shall be released upon the release of
such Subsidiary from liability in respect of Guarantees of Debt of the Company; and, provided,
further, that any release of a Subsidiary Guarantee under the preceding proviso will not impair the
rights of the Holders to receive Subsidiary Guarantees of the Securities in accordance with this
paragraph in the event future Debt of the Company is Guaranteed by such Subsidiary.




          SECTION 3.4. Maintenance of Office or Agency. The Company will maintain in The City of New York,
an office or agency where the Securities may be presented or surrendered for payment, where, if
applicable, the Securities may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities and this Indenture may be
served. The agency of the Trustee (the “Agent”) currently located in The City of New York shall be
such office or agency of the Company, unless the Company shall designate and maintain some other
office or agency for one or more of such purposes. The Company will give prompt written notice to
the Trustee of any change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Agent of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.




          The Company may also from time to time designate one or more other offices or agencies (in or
outside of The City of New York) where the Securities may be presented or surrendered for any or
all such purposes and may from time to time rescind any such







 



34




designation; provided, however, that
no such designation or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and any change in the
location of any such other office or agency.




          SECTION 3.5. Corporate Existence. Except as otherwise provided in Article IV and
Section 10.2(b), the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate, partnership, limited
liability company or other existence of each Significant Subsidiary or the respective corporate,
partnership, limited liability company or other existences of each member of any group of
Subsidiaries that taken together would constitute a Significant Subsidiary of the Company and the
rights (charter and statutory), licenses and franchises of the Company and each Significant
Subsidiary or each member of any group of Subsidiaries that taken together would constitute a
Significant Subsidiary of the Company; provided, however, that the Company shall not be required to
preserve any such right, license or franchise or the corporate, partnership, limited liability
company or other existence of any Significant Subsidiary or the respective corporate, partnership,
limited liability company or other existences of each member of any group of Subsidiaries that
taken together would constitute a Significant Subsidiary of the Company, if the Board of Directors
of the Company shall determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and each of its Subsidiaries, taken as a whole, and that the loss
thereof is not, and will
not be, disadvantageous in any material respect to the Holders; provided, further, that the
Company shall not be required to preserve any such right, license or franchise or the corporate,
partnership, limited liability company or other existence of a Subsidiary that is neither a
Significant Subsidiary nor a member of any group of Subsidiaries that taken together would
constitute a Significant Subsidiary of the Company.




          SECTION 3.6. Payment of Taxes and Other Claims. The Company will pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a material liability or lien upon the
property of the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith by appropriate
proceedings and for which appropriate reserves, if necessary (in the good faith judgment of
management of the Company), are being maintained in accordance with GAAP or where the failure to
effect such payment will not be disadvantageous to the Holders.




          SECTION 3.7. Payments for Consent. Neither the Company nor any of its Subsidiaries will, directly
or indirectly, pay or cause to be paid any consideration, whether by way of interest, fees or
otherwise, to any Holder of any Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities unless such
consideration is offered to be paid or is paid to all Holders of the Securities that consent, waive
or agree to amend in the time frame set forth in the solicitation documents relating to such
consent, waiver or amendment.










 



35




          SECTION 3.8. 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, one of the signers of
which shall be the principal executive officer, principal financial officer or principal accounting
officer of the Company, stating that in the course of the performance by the signers of their
duties as Officers of the Company they would normally have knowledge of any Default or Event of
Default and whether or not the signers know of any Default or Event of Default that occurred during
such period. If they do, the certificate shall describe the Default or Event of Default, its
status and the action the Company is taking or proposes to take with respect thereto. The Company
also shall comply with TIA § 314(a)(4).




          SECTION 3.9. Further Instruments and Acts. Upon request of the Trustee, the Company will execute
and deliver such further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.




          SECTION 3.10. Statement by Officers as to Default. The Company shall deliver to the Trustee, as soon as possible and in any event within 30
days after the Company becomes aware of the occurrence of any Event of Default or an event which,
with notice or the lapse of time or both, would constitute an Event of Default, an Officers’
Certificate setting forth the details of such Event of Default or default, its status and the
action which the Company proposes to take with respect thereto.




          SECTION 3.11. Tax Treatment. The Company agrees, and by acceptance of beneficial ownership interest
in the Securities each beneficial holder of Securities will be deemed to have agreed, for United
States federal income tax purposes (1) to treat the Securities as indebtedness that is subject to
Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and, for purposes of the
Contingent Payment Regulations, to treat any cash and the fair market value of stock beneficially
received by a beneficial holder upon any conversion of the Securities as a contingent payment and
(2) to be bound by the Company’s determination of the “comparable yield” and “projected payment
schedule,” within the meaning of the Contingent Payment Regulations, with respect to the
Securities. A Holder of Securities may obtain the amount of original issue discount, issue date,
yield to maturity, comparable yield and projected payment schedule by submitting a written request
for it to the Company at the following address: Manor Care, Inc., 333 North Summit Street,
16th Floor, Toledo, Ohio 43699-0086, Attention: Steven M. Cavanaugh, Chief Financial
Officer.




          SECTION 3.12. Additional Interest. If Additional Interest is payable by the Company pursuant to the
Registration Rights Agreement, the Company shall deliver to the Trustee an Officers’ Certificate to
that effect stating (i) the amount of such Additional Interest that are payable and (ii) the date
on which such Additional Interest is payable. Unless and until a Trust Officer of the Trustee
receives such a certificate, the Trustee may assume without inquiry that no Additional Interest is
payable. If the Company has paid Additional Interest directly to the persons entitled to them, the
Company shall deliver to the Trustee an Officers’ Certificate setting forth the particulars of such
payment.










 



36




ARTICLE IV




Successor Company 




          SECTION 4.1. Consolidation, Merger and Sale of Assets. The Company shall not consolidate with or
merge with or into, or convey, transfer or lease all or substantially all its assets to, another
Person, unless:





     (i) the resulting, surviving or transferee Person (the “Successor Company”) if not the
Company shall be a corporation, partnership, trust or limited liability company organized
and existing under the laws of the United States of America, any State thereof or the
District of Columbia and the Successor Company (if not the Company) shall expressly assume,
by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the Securities,
this Indenture and, to the extent that it is otherwise still operative, the
Registration Rights Agreement;




     (ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;




     (iii) each Subsidiary Guarantor (unless it is the other party to the transactions
described above, in which case clause (i) and Section 10.2 shall apply) shall have
by supplemental indenture confirmed that its Subsidiary Guarantee shall apply for such
Person’s obligations in respect of this Indenture and the Securities and its obligations
under the Registration Rights Agreement shall continue to be in effect; and




     (iv) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture, if any, comply with this Indenture.



          For purposes of this Section 4.1, the sale, lease, conveyance, assignment, transfer,
or other disposition of all or substantially all of the properties and assets of one or more
Subsidiaries of the Company, which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and assets of the Company
on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.




          The Successor Company will succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture, but, in the case of a lease of all or substantially
all its assets, the Company will not be released from the obligation to pay the principal of and
interest (including Contingent Interest and Additional Interest, if any), on the Securities.










 



37




ARTICLE V




Redemption of Securities




          SECTION 5.1. Optional Redemption. The Securities may be redeemed, as a whole or from time to time
in part, subject to the conditions and at the redemption price specified in paragraph 5 of the form
of Securities set forth in Exhibit A hereto, which are hereby incorporated by reference and made a
part of this Indenture, together with accrued and unpaid interest (including Contingent Interest
and Additional Interest, if any), to the Redemption Date.




          SECTION 5.2. Applicability of Article. Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance
with such provision and this Article V.




          SECTION 5.3. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities pursuant to Section 5.1 shall
be evidenced by a Board Resolution. In case of any redemption at the election of the Company, the
Company shall, upon not later than the earlier of the date that is 45 days prior to the Redemption
Date fixed by the Company or the date on which notice is given to the Holders (except as provided
in Section 5.5 or unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and shall
deliver to the Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 5.4. Any such notice may be cancelled at any
time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of
no effect.




          SECTION 5.4. Selection by Trustee of Securities to Be Redeemed. If less than all the Securities
are to be redeemed at any time pursuant to an optional redemption, the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from
the outstanding Securities not previously called for redemption, by lot, or on a pro rata basis
among the classes of Securities or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements) and which may
provide for the selection for redemption of portions of the principal of the Securities; provided,
however, that no such partial redemption shall reduce the portion of the principal amount of a
Security not redeemed to less than $1,000.




          The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.




          For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to redemption of Securities shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of such Security which has been or is
to be redeemed.




          If any Securities selected for partial redemption are thereafter surrendered for conversion in
part before termination of the conversion right with respect to the portion of the Securities so
selected, the converted portion of such Securities shall be deemed (so far as may







 



38




be), solely for
purposes of determining the aggregate principal amount of Securities to be redeemed by the Company,
to be the portion selected for redemption. Securities which have been converted during a selection
of Securities to be redeemed may be treated by the Trustee as outstanding for the purpose of such
selection. Nothing in this Section 5.4 shall affect the right of any Holder to convert any
Securities pursuant to Article XII before the termination of the conversion right with
respect thereto.




          SECTION 5.5. Notice of Redemption. Notice of redemption shall be given in the manner provided for
in Section 13.2 not less than 35 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed. At the Company’s expense, the Trustee shall give notice
of redemption in the Company’s name and at the Company’s expense; provided, however, that the
Company shall deliver to the Trustee, at least 45 days prior to the Redemption Date, an
Officers’ Certificate requesting that the Trustee give such notice at the Company’s expense and
setting forth the information to be stated in such notice as provided in the following items.




          All notices of redemption shall state:





          (1) the Redemption Date,




          (2) the redemption price and the amount of accrued interest (including Contingent
Interest and Additional Interest, if any), to the Redemption Date payable as provided in
Section 5.7, if any,




          (3) the then current Conversion Rate, a statement that the Securities called for
redemption may be converted at any time before the close of business on the third Trading
Day prior to the Redemption Date, and that Holders who wish to convert Securities must
comply with the procedures in paragraph 8 of the Securities,




          (4) if less than all outstanding Securities are to be redeemed, the identification of
the particular Securities (or portion thereof) to be redeemed, as well as the aggregate
principal amount of Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption,




          (5) in case any Security is to be redeemed in part only, the notice which relates to
such Security shall state that on and after the Redemption Date, upon surrender of such
Security, the Holder will receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining unredeemed,




          (6) that on the Redemption Date the redemption price (and accrued interest, if any,
(including Contingent Interest and Additional Interest, if any), to the Redemption Date
payable as provided in Section 5.7) will become due and payable upon each such
Security, or the portion thereof, to be redeemed, and, unless the Company defaults in making
the redemption payment, that interest (including Contingent Interest and Additional
Interest, if any), on Securities called for redemption (or the portion thereof) will cease
to accrue on and after said date,









 



39



          (7) the place or places where such Securities are to be surrendered for payment of the
redemption price and accrued interest, if any, and any Contingent Interest, and Additional
Interest,




          (8) the name and address of the Paying Agent and the Conversion Agent,




          (9) that Securities called for redemption must be surrendered to the Paying Agent to
collect the redemption price,




          (10) the CUSIP number, and that no representation is made as to the accuracy or
correctness of the CUSIP number, if any, listed in such notice or printed on the Securities,
and




          (11) the paragraph of the Securities pursuant to which the Securities are to be
redeemed.



          SECTION 5.6. Deposit of Redemption Price. Prior to any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 2.6) an amount of money sufficient to
pay the redemption price of, and accrued interest (including any Contingent Interest and Additional
Interest), on, all the Securities which are to be redeemed on that date other than Securities or
portions of Securities called for redemption that are beneficially owned by the Company and have
been delivered by the Company to the Trustee for cancellation.




          SECTION 5.7. Securities Payable on Redemption Date. Notice of redemption having been given as
aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable
at the redemption price therein specified (together with accrued and unpaid interest, if any, and
any Contingent Interest and Additional Interest, to but excluding the Redemption Date), and from
and after such date (unless the Company shall default in the payment of the redemption price and
accrued and unpaid interest (including Contingent Interest and Additional Interest, if any)) such
Securities shall cease to bear interest Contingent Interest or Additional Interest. Upon surrender
of any such Security for redemption in accordance with said notice, such Security shall be paid by
the Company at the redemption price, together with accrued interest, if any, any Contingent
Interest and Additional Interest, to the Redemption Date (subject to the rights of Holders of
record on the relevant record date to receive interest due on the relevant interest payment date).




          If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid, bear interest (including Contingent Interest and
Additional Interest, if any), from the Redemption Date at the rate borne by the Securities.




          SECTION 5.8. Securities Redeemed in Part. Any Security which is to be redeemed only in part
(pursuant to the provisions of this Article V) shall be surrendered at the office or agency
of the Company maintained for such purpose pursuant to Section 3.4 (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s
attorney duly authorized in writing), and the Company shall execute, and the Trustee





 









 





40




shall authenticate and make available for delivery to the Holder of such Security at the expense of the
Company, a new Security or Securities, of any authorized denomination as requested by such Holder,
in an aggregate principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered, provided that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.




ARTICLE VI




Defaults and Remedies




          SECTION 6.1.   Events of Default. Each of the following is an “Event of Default”:





               (1) default in any payment of interest, including any Contingent Interest or Additional
Interest (as required by the Registration Rights Agreement) on any Security when the same
becomes due and payable, and such default continues for a period of 30 days;




               (2) default in the payment of the principal of any Security when the same becomes due
and payable at its Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise;




               (3) failure by the Company to comply with its obligation to convert the Securities into
cash or a combination of cash and Common Stock, as applicable, upon exercise of a Holder’s
conversion right and such failure continues for a period of five calendar days;




               (4) failure by the Company or any Subsidiary Guarantor to comply with any of its
obligations under Article IV or Section 10.2;




               (5) the Company defaults in the performance of or a breach by the Company of any other
covenant or agreement in this Indenture or under the Securities (other than those referred
to in (1), (2), (3) or (4) above) and such default continues for 60 days after the notice
specified below;




               (6) there is a default under any mortgage, agreement or other instrument under which
there may be issued or by which there may be outstanding, or by which there may be secured
or evidenced any Debt for money borrowed by the Company or any of its Subsidiaries (other
than Non-Recourse Debt of a Non-Recourse Subsidiary), whether such Debt now exists, or is
created after the date of this Indenture, which default




                         (A) is caused by a failure to pay principal of, or interest or premium, if any, on such
Debt prior to the expiration of the grace period provided in such Debt (“Payment Default”)
or




                         (B) results in the acceleration of such Debt prior to its maturity (the “cross
acceleration provision”)











 



41



and, in each case, the principal amount of any such Debt, together with the principal amount
of any other such Debt under which there has been a Payment Default or the maturity of which
has been so accelerated, aggregates $20.0 million or more or its foreign currency equivalent
at the time and such acceleration shall not have been rescinded or annulled within 10 days after written notice of such acceleration has been received by the
Company or such Subsidiary;




               (7) the Company pursuant to or within the meaning of any Bankruptcy Law:




                         (A) commences a voluntary case or proceeding;




                         (B) consents to the entry of judgment, decree or order for relief against it in an
involuntary case or proceeding;




                         (C) consents to the appointment of a Custodian of it or for any substantial part of its
property; or




                         (D) makes a general assignment for the benefit of its creditors;




                         (E) consents to or acquiesces in the institution of a bankruptcy or an insolvency
proceeding against it;




                         (F) takes any corporate action to authorize or effect any of the foregoing; or




                         (G) takes any comparable action under any foreign laws relating to insolvency; or




               (8) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:




                         (A) is for relief against the Company in an involuntary case;




                         (B) appoints a Custodian of the Company for all or substantially all of the Company’s
property; or




                         (C) orders the winding up or liquidation of the Company; and in each case the order or
decree or relief remains unstayed and in effect for 90 days; or




               (9) there has been entered in a court of competent jurisdiction a final judgment for
the payment of $20.0 million or more rendered against the Company or any Subsidiary, which
judgment is not fully covered by insurance or not discharged or stayed within 90 days after
(A) the date on which the right to appeal thereof has expired if no such appeal has
commenced, or (B) the date on which all rights to appeal have been extinguished (“judgment
default provision”).









 



42


     The foregoing will constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.



     Notwithstanding the foregoing, a Default under clause (5) of this Section 6.1 will not
constitute an Event of Default until the Trustee or the Holders of 25% or more in principal amount
of the outstanding Securities notify the Company of the Default in writing and the Company does not
cure such Default within the time specified in clause (5) of this Section 6.1 after receipt
of such notice.



     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 Default or Event of Default under clauses
(3), (4), (5), (6), (7), (8) or (9) of this Section 6.1, which such notice shall contain
the status thereof and a description of the action being taken or proposed to be taken by the
Company in respect thereof.



     SECTION 6.2.   Acceleration. If an Event of Default occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in outstanding principal amount of
the outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the
request of such Holders shall, declare the principal of and accrued and unpaid interest, if any,
(including Contingent Interest and Additional Interest, if any), on all the Securities to be due
and payable. Upon such a declaration, such principal, premium, if any, and accrued and unpaid
interest (including Contingent Interest, and Additional Interest, if any), shall be due and payable
immediately.



     SECTION 6.3.   Other Remedies. If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal of or interest
(including Contingent Interest and Additional Interest, if any), on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.



     The Trustee may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair
the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative.



     SECTION 6.4.   Waiver of Past Defaults. The Holders of a majority in principal amount
of the outstanding Securities by notice to the Trustee may (a) waive, by their consent (including,
without limitation consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Securities), an existing Default or Event of Default and its consequences except (i) a
Default or Event of Default in the payment of the principal of or interest (including Contingent
Interest and Additional Interest, if any), on a Security or (ii) a Default or Event of Default in
respect of a provision that under Section 9.2 cannot be amended without the consent of each
Securityholder affected and (b) rescind any such acceleration with respect to the Securities and
its consequences if (1) rescission would not conflict with any judgment or decree









 



43

of a court of
competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the
principal of and interest (including Contingent Interest and Additional Interest, if any), on the
Securities that have become due solely by such declaration of acceleration, have been cured or
waived. When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any consequent right.




          SECTION 6.5.   Control by Majority. The Holders of a majority in principal amount of
the outstanding Securities may direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture
or, subject to Sections 7.1 and 7.2, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all
losses and expenses caused by taking or not taking such action.




          SECTION 6.6.   Limitation on Suits. Subject to Section 6.7, a Securityholder
may not pursue any remedy with respect to this Indenture or the Securities unless:





               (1) such Holder has previously given to the Trustee written notice stating that an
Event of Default is continuing;




               (2) Holders of at least 25% in principal amount of the outstanding Securities have
requested that the Trustee pursue the remedy;




               (3) such Holders have offered to the Trustee security or indemnity reasonably
satisfactory to it against any loss, liability or expense;




               (4) the Trustee has not complied with such request within 60 days after receipt of the
request and the offer of security or indemnity; and




               (5) the Holders of a majority in principal amount of the outstanding Securities have
not given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with
such request 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 6.7.   Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture (including, without limitation, Section 6.6), the right of any
Holder to receive payment of principal of or interest (including Contingent Interest and Additional
Interest, if any), 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.










 



44




          SECTION 6.8.   Collection Suit by Trustee. If an Event of Default specified in
clauses (1) or (2) of Section 6.1 occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company for the whole
amount then due and owing (together with interest on any unpaid interest (including any Contingent
Interest) to the extent lawful) and the amounts provided for in Section 7.7.




          SECTION 6.9.   Trustee May File Proofs of Claim. The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and the Securityholders allowed in any judicial
proceedings relative to the Company, its Subsidiaries or its or their respective creditors or
properties and, unless prohibited by law or applicable regulations, may be entitled and empowered
to participate as a member of any official committee of creditors appointed in such matter, and 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 7.7.




          SECTION 6.10.   Priorities. If the Trustee collects any money or property pursuant to
this Article VI, it shall pay out the money or property in the following order:





     FIRST: to the Trustee for amounts due under Section 7.7;




     SECOND: to Securityholders for amounts due and unpaid on the Securities for principal
and interest (including Contingent Interest and Additional Interest, if any), 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 6.10. 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 and expenses, against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to Section
6.7 or a suit by Holders of more than 10% in outstanding principal amount of the Securities.










 



45




ARTICLE VII




Trustee




          SECTION 7.1.   Duties of Trustee. (a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in its exercise as a prudent Person would exercise or use under
the circumstances in the conduct of such Person’s own affairs; provided that if an Event of Default
occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or
powers under this Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee indemnity or security satisfactory to the Trustee against loss,
liability or expense.




          (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, opinions or orders furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates, opinions or orders which
by any provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).



          (c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:





               (1) this paragraph does not limit the effect of paragraph (b) of this Section
7.1;




               (2) the Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer of the Trustee unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and




               (3) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section
6.5.



          (d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.1.




          (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.










 



46




          (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 7.1
and to the provisions of the TIA.




          (i) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company shall be sufficient if signed by an Officer of the Company.




          (j) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders unless such Holders shall
have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs,
expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.




          SECTION 7.2.   Rights of Trustee. Subject to Section 7.1:




          (a) The Trustee may conclusively rely on any document (whether in its original or facsimile
form) reasonably believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the document. The Trustee
shall receive and retain financial reports and statements of the Company as provided herein, but
shall have no duty to review or analyze such reports or statements to determine compliance under
covenants or other obligations of the Company.




          (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.




          (c) The Trustee may act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.




          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct
constitutes willful misconduct or negligence.




          (e) The Trustee may consult with counsel of its selection, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Securities shall be full
and complete authorization and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or opinion of such
counsel.










 



47




          (f) The Trustee shall not be responsible or liable for special, indirect, or consequential
loss or damage of any kind whatsoever (including, but not limited to, loss of profit) resulting
from actions taken in good faith and which the Trustee believes to be authorized or within its
rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.




          (g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at its designated corporate trust
office, and such notice references the Securities and this Indenture.




          (h) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.




          (i) The Trustee may request that the Company deliver a certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified actions pursuant to
this Indenture.




          SECTION 7.3.   Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Securities and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11. In addition, the Trustee shall be
permitted to engage in transactions with the Company; provided, however, that if the Trustee
acquires any conflicting interest the Trustee must (i) eliminate such conflict within 90 days of
acquiring such conflicting interest, (ii) apply to the SEC for permission to continue acting as
Trustee or (iii) resign.




          SECTION 7.4.   Trustee’s Disclaimer. The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the Securities, shall
not be accountable for the Company’s use of the proceeds from the Securities, shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee and shall not be
responsible for any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the Trustee’s
certificate of authentication.




          SECTION 7.5.   Notice of Defaults. If a Default or Event of Default occurs and is
continuing and if a Trust Officer of the Trustee has actual knowledge thereof, the Trustee shall
mail by first class mail to each Securityholder at the address set forth in the Securities Register
notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of or interest (including Contingent Interest
and Additional Interest, if any), on any Security (including payments pursuant to the optional
redemption or required repurchase provisions of such Security, if any), the Trustee may withhold
the notice if and so long as its board of directors, a committee of its board of directors or a












 



48



committee of its Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.




          SECTION 7.6.   Reports by Trustee to Holders. As promptly as practicable after each
May 15 beginning with the May 15 following the date of this Indenture, and in any event prior to
November 15 in each year, the Trustee shall mail to each Securityholder a brief report dated as of
such May 15 that complies with TIA § 313(a), if required by such TIA § 313(a). The Trustee also
shall comply with TIA § 313(b). The Trustee shall also transmit by mail all reports required by
TIA § 313(c).




          A copy of each report at the time of its mailing to Securityholders shall be filed with the
SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to
notify promptly the Trustee in writing whenever the Securities become listed on any stock exchange
and of any delisting thereof.




          SECTION 7.7.   Compensation and Indemnity. The Company shall pay to the Trustee from
time to time such compensation for its acceptance of this Indenture and services hereunder as the
Company and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall
not be limited by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, costs of preparing and reviewing reports, certificates and other
documents, costs of preparation and mailing of notices to Securityholders and reasonable costs of
counsel retained by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, in addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any and all loss,
liability, damages, claims or expense (including reasonable attorneys’ fees and expenses) incurred
by it without negligence or bad faith on its part in connection with the administration of this
trust and the performance of its duties hereunder, including the costs and expenses of enforcing
this Indenture (including this Section 7.7) and of defending itself against any claims (whether asserted by any
Securityholder, the Company or otherwise). The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the claim and the
Trustee shall provide reasonable cooperation at the Company’s expense in the defense. The Trustee
may have separate counsel and the Company shall pay the fees and expenses of such counsel, provided
that the Company shall not be required to pay such fees and expenses if it assumes the Trustee’s
defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of
interest between the Company and the Trustee in connection with such defense. The Company need not
reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee
through the Trustee’s own willful misconduct, negligence or bad faith.




          To secure the Company’s payment obligations in this Section 7.7, 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 (including Contingent
Interest and Additional Interest, if any), on particular Securities. Such lien shall survive the
satisfaction and discharge of this Indenture. The Trustee’s right to receive payment of any










 



49



amounts due under this Section 7.7 shall not be subordinate to any other liability or Debt
of the Company.




          The Company’s payment obligations pursuant to this Section 7.7 shall survive the
discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in clauses (7) and (8) of Section 6.1 with respect to the Company, the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.




          SECTION 7.8.   Replacement of Trustee. The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in principal amount of the Securities may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:





               (1) the Trustee fails to comply with Section 7.10;




               (2) the Trustee is adjudged bankrupt or insolvent;




               (3) a receiver or other public officer takes charge of the Trustee or its property; or




               (4) the Trustee otherwise becomes incapable of acting.



          If the Trustee resigns or is removed by the Company or by the Holders of a majority in
principal amount of the Securities and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.




          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7.




          If a successor Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the
Securities may petition, at the Company’s expense, any court of competent jurisdiction for the
appointment of a successor Trustee.




          If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign
is stayed as provided in TIA § 310(b), 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 7.8, the
Company’s obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee.










 



50




          SECTION 7.9.   Successor Trustee by Merger. If the Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.




          In case at the time such successor or successors by merger, conversion or consolidation to the
Trustee shall succeed to the trusts created by this Indenture, any of the Securities shall have
been authenticated but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the
name of the successor to the Trustee; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor
Trustee shall only apply to its successor or successors by merger, consolidation or conversion.




          SECTION 7.10.   Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the
operation of TIA § 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 § 310(b)(1) are met.




          SECTION 7.11.   Preferential Collection of Claims Against Company. The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in
TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the
extent indicated.




          SECTION 7.12.   Trustee’s Application for Instruction from the Company. Any
application by the Trustee for written instructions from the Company may, at the option of the
Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this
Indenture and the date on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date specified in such
application (which date shall not be less than three Business Days after the date any officer of
the Company actually receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the effective date in the
case of an omission), the Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted.




ARTICLE VIII




Discharge of Indenture




          SECTION 8.1.   Discharge of Liability on Securities. When (1) the Company shall
deliver to the Registrar for cancellation all Securities theretofore authenticated (other than












 



51



any
Securities which have been destroyed, lost or stolen and in lieu of or in substitution for which
other Securities shall have been authenticated and delivered) and not theretofore canceled, or (2)
all the Securities not theretofore canceled or delivered to the Registrar for cancellation shall
have (a) been deposited for conversion and the Company shall deliver to the Holders shares of
Common Stock sufficient to pay all amounts owing in respect of all Securities (other than any
Securities which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Securities shall have been authenticated and delivered) not
theretofore canceled or delivered to the Registrar for cancellation or (b) become due and payable
on the Stated Maturity, Purchase Date, Fundamental Change Purchase Date or Redemption Date, as
applicable, and the Company shall deposit with the Trustee cash or shares of Common Stock, as
applicable, sufficient to pay all amounts owing in respect of all Securities (other than any
Securities which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Securities shall have been authenticated and delivered) not
theretofore canceled or delivered to the Registrar for cancellation, including the principal amount
and interest (including Contingent Interest and Additional Interest, if any), accrued and unpaid to
such Stated Maturity, Purchase Date, Fundamental Change Purchase Date or Redemption Date, as the
case may be, and if in either case (1) or (2) the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then the Indenture with respect to the Securities
shall cease to be of further effect (except as to (i) remaining rights of registration of transfer,
substitution and exchange and conversion of Securities; (ii) rights hereunder of Holders to receive
payments of the amounts then due, including interest (including Contingent Interest and Additional
Interest, if any), with respect to the Securities and the other rights, duties and obligations of
Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee; and (iii) the
rights, obligations and immunities of the Trustee, Authenticating Agent, Paying Agent, Conversion
Agent and Registrar under the Indenture with respect to the Securities), and the Trustee, on demand
of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by
Section 8.3 and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging the Indenture with respect to the Securities; the
Company, however, hereby agrees to reimburse the Trustee, Authenticating Agent, Paying Agent,
Conversion Agent and Registrar for any costs or expenses thereafter reasonably and properly
incurred by the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar and to
compensate the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and Registrar for any
services thereafter reasonably and properly rendered by the Trustee, Authenticating Agent, Paying
Agent, Conversion Agent and Registrar in connection with the Indenture with respect to the
Securities or the Securities.




          SECTION 8.2.   Reinstatement. If the Trustee or the Paying Agent is unable to apply
any money to the Holders entitled thereto by reason of any order or judgment of any court of
governmental authority enjoining, restraining or otherwise prohibiting such application, the
Company’s obligations under the Indenture with respect to the Securities and the Securities shall
be revived and reinstated as though no deposit had occurred pursuant to Section 8.1 until
such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance
with the Indenture and the Securities to the Holders entitled thereto; provided, however, that if
the Company makes any payment of principal amount of or interest (including Contingent Interest and
Additional Interest, if any), on any Securities following 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 held by the Trustee or Paying Agent.










 



52




          SECTION 8.3.   Officers’ Certificate; Opinion of Counsel. Upon any application or
demand by the Company to the Trustee to take any action under Section 8.1, the Company
shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if
any, provided for in the Indenture relating to the proposed action have been complied with, and an
Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have
been complied with.




          Each certificate or Opinion of Counsel provided for in this Indenture and delivered to the
Trustee with respect to compliance with a condition or covenant pursuant to the previous paragraph
shall include: (1) a statement that the Person making such certificate or opinion has read such
covenant or condition; (2) a brief statement as to the nature and scope of the examination or
investigation upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (4) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been complied with.




ARTICLE IX




Amendments




          SECTION 9.1.   Without Consent of Holders. The Company, the Subsidiary Guarantors and
the Trustee may amend this Indenture or the Securities without notice to or consent of any
Securityholder:





               (1) to cure any ambiguity, omission, defect or inconsistency;




               (2) to comply with Article IV in respect of the assumption by a Successor
Company of an obligation of the Company under this Indenture;




               (3) to provide for uncertificated Securities in addition to or in place of certificated
Securities; provided, however, that the uncertificated Securities are issued in registered
form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;




               (4) to add Guarantees with respect to the Securities;




               (5) to secure the Securities;




               (6) 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;




               (7) to comply with any requirement of the SEC in connection with the qualification of
this Indenture under the TIA; or




               (8) to make any change that does not materially adversely affect the rights of any
Securityholder.









 



53


          After an amendment under this Section 9.1 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 9.1.




          SECTION 9.2.   With Consent of Holders. The Company, the Subsidiary Guarantors and
the Trustee may amend this Indenture or the Securities without notice to any Securityholder but
with the written consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Securities) and compliance with the provisions
of this Indenture may be waived with the written consent of the Holders of at least a majority in
principal amount of the Securities then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer for, Securities).
However, without the consent of each Securityholder affected, an amendment or waiver may not:





               (1) reduce the amount of Securities whose Holders must consent to an amendment;




               (2) reduce the rate of or extend the stated time for payment of interest, including
Contingent Interest and Additional Interest, on any Security;




               (3) reduce the principal of or extend the Stated Maturity of any Security;




               (4) make any change that adversely affects the conversion rights of any Securities;




               (5) reduce the redemption price, the Fundamental Change Purchase Price, the Purchase
Price payable upon the redemption or repurchase of any Security or amend or modify in any
manner adverse to holders of the Securities the Company’s obligation to make such payments,
whether through an amendment to or waiver of Article V, Article IX , a
definition or otherwise;




               (6) make any Security payable in money other than that stated in the Security (it being
understood that all references to cash in this Indenture and the Securities are to U.S.
legal tender) or, other than in accordance with the provisions of this Indenture in effect
on the Issue Date, eliminate any existing Guarantee of the Securities;




               (7) impair the right of any Holder to receive payment of principal of and interest
(including Contingent Interest and Additional Interest, if any), on such Holder’s Securities
on or after the due dates therefor or to institute suit for the enforcement of any payment
on or with respect to such Holder’s Securities; or




               (8) make any change to the amendment provisions which require each Holder’s consent or
to the waiver provisions.









 



54


          It shall not be necessary for the consent of the Holders under this Section 9.2 to
approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such
consent approves the substance thereof. A consent to any amendment or waiver under this Indenture
by any Holder of the Securities given in connection with a tender or exchange of such Holder’s
Securities will not be rendered invalid by such tender or exchange.




          After an amendment under this Section 9.2 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 9.2.




          SECTION 9.3.   Compliance with Trust Indenture Act. Every amendment to this Indenture
or the Securities shall comply with the TIA as then in effect.




          SECTION 9.4.   Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that evidences the same debt as
the consenting Holder’s Security, even if notation of the consent or waiver is not made on the
Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to
such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective or otherwise in accordance with any
related solicitation documents. After an amendment or waiver becomes effective, it shall bind
every Securityholder. An amendment or waiver shall become effective upon receipt by the Trustee of
the requisite number of written consents under Section 9.1 or 9.2, as applicable.




          The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Securityholders entitled to give their consent or take any other action described
above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at
such record date (or their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such action, whether or
not such Persons continue to be Holders after such record date. No such consent shall become valid
or effective more than 120 days after such record date.




          SECTION 9.5.   Notation on or Exchange of Securities. If an amendment changes the
terms of a Security, the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms. Failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment.




          SECTION 9.6.   Trustee To Sign Amendments. The Trustee shall sign any amendment
authorized pursuant to this Article IX if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not
sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Sections 7.1 and 7.2) shall be
fully protected in












 



55



relying upon, an Officers’ Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture and that such amendment is the legal,
valid and binding obligation of the Company and any Subsidiary Guarantors, enforceable against them
in accordance with its terms, subject to customary exceptions and complies with the provisions
hereof (including Section 9.3).




ARTICLE X




Subsidiary Guarantee




          SECTION 10.1.   Subsidiary Guarantee. Each Subsidiary Guarantor hereby fully, unconditionally and irrevocably guarantees, as
primary obligor and not merely as surety, jointly and severally with each other Subsidiary
Guarantor, to each Holder of the Securities and the Trustee the full and punctual payment when due,
whether at maturity, by acceleration, by redemption or otherwise, of the principal of and interest,
including Contingent Interest, if any, and Additional Interest, if any, on the Securities and all
other obligations and liabilities of the Company under this Indenture (including without limitation
interest (including any Contingent Interest and Additional Interest) accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company or any Subsidiary Guarantor whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) (all the foregoing being
hereinafter collectively called the “Obligations”). Each Subsidiary Guarantor further agrees (to
the extent permitted by law) that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from it, and that it will remain bound under this Article
X notwithstanding any extension or renewal of any Obligation.




          Each Subsidiary Guarantor waives presentation to, demand of payment from and protest to the
Company of any of the Obligations and also waives notice of protest for nonpayment. Each
Subsidiary Guarantor waives notice of any default under the Securities or the Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder to assert any claim or demand or to enforce any right or remedy against the Company or any
other person under this Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any
of the terms or provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Obligations or any of them; (e)
the failure of any Holder to exercise any right or remedy against any other Subsidiary Guarantor;
or (f) any change in the ownership of the Company.




          Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a
Guarantee of payment when due (and not a Guarantee of collection) and waives any right to require
that any resort be had by any Holder to any security held for payment of the Obligations.




          The obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than payment of the Obligations in
full), including any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination













 



56



whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder to assert any
claim or demand or to enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any extent vary the risk
of any Subsidiary Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor
as a matter of law or equity.




          Subject to the provisions of Section 3.3, each Subsidiary Guarantor agrees that its
Subsidiary Guarantee herein shall remain in full force and effect until payment in full of all the
Obligations or such Subsidiary Guarantor is released from its Subsidiary Guarantee upon the merger
or the sale of all the Capital Stock or assets of the Subsidiary Guarantor in compliance with
Section 10.2. Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if at any time payment,
or any part thereof, of principal of or interest (including Contingent Interest and Additional
Interest, if any), on any of the Obligations is rescinded or must otherwise be restored by any
Holder upon the bankruptcy or reorganization of the Company or otherwise.




          In furtherance of the foregoing and not in limitation of any other right which any Holder has
at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the failure of the
Company to pay any of the Obligations when and as the same shall become due, whether at maturity,
by acceleration, by redemption or otherwise, each Subsidiary Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders an amount equal to the sum of (i) the unpaid amount of such Obligations then due and owing
and (ii) accrued and unpaid interest (including Contingent Interest and Additional Interest, if
any), on such Obligations then due and owing (but only to the extent not prohibited by law).




          Each Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor, on the
one hand, and the Holders, on the other hand, (x) the maturity of the Obligations guaranteed hereby
may be accelerated as provided in this Indenture for the purposes of its Subsidiary Guarantee
herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby and (y) in the event of any such declaration of
acceleration of such Obligations, such Obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantor for the purposes of this Subsidiary Guarantee.




          Each Subsidiary Guarantor also agrees to pay any and all reasonable costs and expenses
(including reasonable attorneys’ fees and expenses) incurred by the Trustee or the Holders in
enforcing any rights under this Section 10.1.




          SECTION 10.2.   Limitation on Liability; Termination, Release and Discharge Upon Merger or
Consolidation; Termination on Conversion. (a) The obligations of each Subsidiary Guarantor
hereunder will be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (including,












 



57



without limitation, any
guarantees under the Senior Credit Obligations, the 2013 Notes, the 2023 Notes and the 2035 Notes)
and after giving effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its
Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in
the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being
void or voidable under any similar laws affecting the rights of creditors generally.




          (b) Each Subsidiary Guarantor may consolidate with or merge into or sell its assets to the
Company or another Subsidiary Guarantor without limitation. Subject to Article III and
Article IV, each Subsidiary Guarantor may consolidate with or merge into or sell all or
substantially all its assets to a corporation, partnership or trust other than the Company or
another Subsidiary Guarantor (whether or not affiliated with the Subsidiary Guarantor), except that
if the surviving corporation of any such merger or consolidation is a Subsidiary of the Company,
such merger, consolidation or sale shall not be permitted unless (i) the Person formed by or
surviving any such consolidation or merger assumes all the obligations of such Subsidiary under the
Subsidiary Guarantee pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee in respect of the Securities, this Indenture and the Subsidiary
Guarantee, (ii) immediately after giving effect to such transaction, no Default or Event of Default
exists; and (iii) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel addressed to the Trustee with respect to the foregoing matters. Upon the sale or
disposition of a Subsidiary Guarantor (by merger, consolidation, the sale of its Capital Stock or
the sale of all or substantially all of its assets (other than by lease)) and whether or not the
Subsidiary Guarantor is the surviving corporation in such transaction to a Person (whether or not
an Affiliate of the Subsidiary Guarantor) which is not the Company or a Subsidiary of the Company,
which sale or disposition is otherwise in compliance with this Indenture, such Subsidiary Guarantor
will be released from all its obligations under this Indenture and its Subsidiary Guarantee and
such Subsidiary Guarantee will terminate; provided, however, that any such termination will occur
only to the extent that (x) with respect to each Subsidiary Guarantor, each such Subsidiary
Guarantor will be released from obligations under its Subsidiary Guarantee if all the obligations
of such Subsidiary Guarantor under the Senior Credit Obligations, the 2013 Notes, the 2023 Notes,
the 2035 Notes and related documentation terminate upon consummation of such transaction. Each
Subsidiary Guarantee with respect to a Security will automatically terminate immediately prior to
such Security’s conversion.




          (c) Each Subsidiary Guarantor will be deemed released from all its obligations under this
Indenture, its Subsidiary Guarantee and the Registration Rights Agreement and such Subsidiary
Guarantee will terminate upon the discharge of the Securities pursuant to the provisions of
Article VIII hereof.




          SECTION 10.3.   Right of Contribution. Each Subsidiary Guarantor hereby agrees that
to the extent that any Subsidiary Guarantor shall have paid more than its proportionate share of
any payment made on the obligations under the Subsidiary Guarantees, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against the Company or any other
Subsidiary Guarantor who has not paid its proportionate share of such payment. The provisions of
this Section 10.3 shall in no respect limit the obligations and











 



58



liabilities of each
Subsidiary Guarantor to the Trustee and the Holders and each Subsidiary Guarantor shall remain
liable to the Trustee and the Holders for the full amount guaranteed by such Subsidiary Guarantor
hereunder.




          SECTION 10.4.   No Subrogation. Notwithstanding any payment or payments made by each
Subsidiary Guarantor hereunder, no Subsidiary Guarantor shall be entitled to be subrogated to any
of the rights of the Trustee or any Holder against the Company or any other Subsidiary Guarantor or any collateral
security or guarantee or right of offset held by the Trustee or any Holder for the payment of the
Obligations, nor shall any Subsidiary Guarantor seek or be entitled to seek any contribution or
reimbursement from the Company or any other Subsidiary Guarantor in respect of payments made by
such Subsidiary Guarantor hereunder, until all amounts owing to the Trustee and the Holders by the
Company on account of the Obligations are paid in full. If any amount shall be paid to any
Subsidiary Guarantor on account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such Subsidiary Guarantor in trust
for the Trustee and the Holders, segregated from other funds of such Subsidiary Guarantor, and
shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by such Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the
Trustee, if required), to be applied against the Obligations.




ARTICLE XI




Purchase at Option of Holder Upon a Fundamental Change; Repurchase at the Option of Holders




          SECTION 11.1.   Purchase at the Option of the Holder Upon a Fundamental Change. If a
Fundamental Change shall occur at any time, each Holder shall have the right, at such Holder’s
option, to require the Company to purchase any or all of such Holder’s Securities on a date that is
no later than 35 Business Days after the date of the Company Notice of the occurrence of such
Fundamental Change (subject to extension to comply with applicable law, as provided in Section
11.3(d)) (the “Fundamental Change Purchase Date”). The Securities shall be repurchased in
integral multiples of $1,000 of the principal amount. The Company shall purchase such Securities at
a price (the “Fundamental Change Purchase Price”), which shall be paid in cash, equal to 100% of
the principal amount of the Securities to be repurchased plus, unless the Fundamental Change
Purchase Date is between a Regular Record Date and the interest payment date to which it relates,
accrued and unpaid interest, including Contingent Interest and Additional Interest, if any, to but
excluding the Fundamental Change Purchase Date.




          (a) Notice of Fundamental Change. The Company, or at its request (which must be
received by the Paying Agent at least three Business Days (or such lesser period as agreed to by
the Paying Agent) prior to the date the Paying Agent is requested to give such notice as described
below), the Paying Agent in the name of and at the expense of the Company, shall mail to all
Holders and the Trustee a Company Notice of the occurrence of a Fundamental Change and of the
purchase right arising as a result thereof, including the information required by Section
11.3(a) hereof, on or before the 20th day after the occurrence of such Fundamental Change. The
Company shall promptly furnish to the Paying Agent a copy of such Company Notice.










 



59




          (b) Exercise of Option. For a Security to be so purchased at the option of the
Holder, the Paying Agent must receive such Security duly endorsed for transfer, together with a
written notice of purchase (a “Fundamental Change Purchase Notice”) and the form entitled “Form of
Fundamental Change Purchase Notice” on the reverse thereof duly completed, on or before the 35th day after the date of the Company Notice of the occurrence of such Fundamental
Change, subject to extension to comply with applicable law. The Fundamental Change Purchase Notice
shall state:





               (1) if certificated, the certificate numbers of the Securities which the Holder shall
deliver to be purchased;




               (2) the portion of the principal amount of the Securities which the Holder shall
deliver to be purchased, which portion must be $1,000 in principal amount or an integral
multiple thereof; and




               (3) that such Securities shall be purchased as of the Fundamental Change Purchase Date
pursuant to the terms and conditions specified in paragraph 7 of the Securities and in this
Indenture.



          (c) Procedures. The Company shall purchase from a Holder, pursuant to this Section
11.1, Securities if the principal amount of such Securities is $1,000 or a multiple of $1,000
if so requested by such Holder.




          Any purchase by the Company contemplated pursuant to the provisions of this Section
11.1 shall be consummated by the delivery of the Fundamental Change Purchase Price to be
received by the Holder promptly following the later of the Fundamental Change Purchase Date or the
time of book-entry transfer or delivery of the Securities.




          Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by this Section 11.1 shall have the right
at any time prior to the close of business on the Business Day prior to the Fundamental Change
Purchase Date to withdraw such Fundamental Change Purchase Notice (in whole or in part) by delivery
of a written notice of withdrawal to the Paying Agent in accordance with Section 11.3(b).




          The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental
Change Purchase Notice or written notice of withdrawal thereof.




          On or before 10:00 a.m. (New York City time) on the Fundamental Change Purchase Date, the
Company shall deposit with the Paying Agent (or if the Company or an Affiliate of the Company is
acting as the Paying Agent, shall segregate and hold in trust) cash sufficient to pay the aggregate
Fundamental Change Purchase Price of the Securities to be purchased pursuant to this Section
11.1. Payment by the Paying Agent of the Fundamental Change Purchase Price for such Securities
shall be made promptly following the later of the Fundamental Change Purchase Date or the time of
book-entry transfer or delivery of such Securities. Subject to Section 12.2 herein and
paragraph 6 of the Securities, no payment or adjustment shall be made for dividends on the Common
Stock the record date for which occurred on or prior to the Fundamental Change Purchase Date. If
the Paying Agent holds, in accordance











 



60



with the terms of this Indenture, cash sufficient to pay the
Fundamental Change Purchase Price of such Securities on the Fundamental Change Purchase Date, then,
on and after such date, such Securities shall cease to be outstanding and interest (including
Contingent Interest and Additional Interest, if any), on such Securities shall cease to accrue,
whether or not book-entry transfer of such Securities is made or such Securities are delivered to the Paying Agent, and
all other rights of the Holder shall terminate (other than the right to receive the Fundamental
Change Purchase Price and previously accrued and unpaid interest (including Contingent Interest and
Additional Interest, if any), upon delivery or transfer of the Securities). Nothing herein shall
preclude any withholding tax required by law.




          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 Holders or the Trustee all cash held by the
Paying Agent for the payment of the Fundamental Change Purchase Price and shall notify the Trustee
of any default by the Company in making any such payment. If the Company or an Affiliate of the
Company acts as Paying Agent, it shall segregate the cash 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 deliver all cash held
by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon doing so, the
Paying Agent shall have no further liability for the cash delivered to the Trustee.




          SECTION 11.2.   Purchase of Securities at the Option of the Holder.




          (a) On June 1, 2013 (the “Purchase Date”), at a Purchase Price, which shall be paid in cash,
equal to 100% of the principal amount of the Securities to be repurchased plus accrued and unpaid
interest, including any Contingent Interest and Additional Interest, to but excluding the Purchase
Date, a Holder shall have the option to require the Company to purchase any outstanding Securities,
upon:





               (1) delivery to the Paying Agent by the Holder of a written notice of purchase (a
“Purchase Notice”) at any time from the opening of business on the date that is 20 Business
Days prior to a Purchase Date until the close of business on the fifth Business Day prior to
such Purchase Date, stating:




          (i) if certificated, the certificate numbers of the Securities which the Holder
will deliver to be purchased, or, if not certificated, the Purchase Notice must
comply with appropriate DTC procedures;




          (ii) the portion of the principal amount of the Securities which the Holder
will deliver to be purchased, which portion must be $1,000 in principal amount or an
integral multiple thereof;




          (iii) that such Securities shall be purchased as of the Purchase Date pursuant
to the terms and conditions specified in paragraph 6 of the Securities and in this
Indenture; and




               (2) delivery or book-entry transfer of such Securities to the Paying Agent prior to, on
or after the Purchase Date (together with all necessary endorsements)









 



61



at the offices of the
Paying Agent, such delivery or transfer being a condition to receipt by the Holder of the
Purchase Price therefor; provided, however, that such Purchase Price shall be so paid
pursuant to this Section 11.2 only if the Securities so delivered or transferred to the Paying Agent shall conform in all respects to the description
thereof in the related Purchase Notice.



          (b) The Company shall purchase from a Holder, pursuant to this Section 11.2,
Securities if the principal amount of such Securities is $1,000 or a multiple of $1,000 if so
requested by such Holder.




          (c) Any purchase by the Company contemplated pursuant to the provisions of this Section
11.2 shall be consummated by the delivery of the Purchase Price to be received by the Holder
promptly following the later of the Purchase Date or the time of book-entry transfer or delivery of
the Securities.




          (d) Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent
the Purchase Notice contemplated by this Section 11.2 shall have the right at any time
prior to the close of business on the Business Day prior to the Purchase Date to withdraw such
Purchase Notice (in whole or in part) by delivery of a written notice of withdrawal to the Paying
Agent in accordance with Section 11.3(b).




          (e) The Paying Agent shall promptly notify the Company of the receipt by it of any Purchase
Notice or written notice of withdrawal thereof.




          (f) On or before 10:00 a.m. (New York City time) on the Purchase Date, the Company shall
deposit with the Paying Agent (or if the Company or an Affiliate of the Company is acting as the
Paying Agent, shall segregate and hold in trust) cash sufficient to pay the aggregate Purchase
Price of the Securities to be purchased pursuant to this Section 11.2. Payment by the
Paying Agent of the Purchase Price for such Securities shall be made promptly following the later
of the Purchase Date or the time of book-entry transfer or delivery of such Securities. Subject to
Section 12.2 herein and paragraph 6 of the Securities, no payment or adjustment shall be
made for dividends on the Common Stock the record date for which occurred on or prior to the
Purchase Date. If the Paying Agent holds, in accordance with the terms of the Indenture, cash
sufficient to pay the Purchase Price of such Securities on the Purchase Date, then, on and after
such date, such Securities shall cease to be outstanding and interest (including any Contingent
Interest and Additional Interest), on such Securities shall cease to accrue, whether or not
book-entry transfer of such Securities is made or such Securities are delivered to the Paying
Agent, and all other rights of the Holder shall terminate (other than the right to receive the
Purchase Price and previously accrued interest (including any Contingent Interest and Additional
Interest), upon delivery or transfer of the Securities). Nothing herein shall preclude any
withholding tax required by law.




          (g) 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 Holders or the Trustee all cash held
by the Paying Agent for the payment of the Purchase Price and shall notify the Trustee of any
default by the Company in making any such payment. If the Company or an Affiliate of the Company
acts as Paying Agent, it shall segregate the cash held by it as Paying










 



62



Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to deliver all cash held by
it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon doing so, the Paying Agent shall have no further liability for the cash delivered
to the Trustee.




          SECTION 11.3.   Further Conditions and Procedures for Purchase at the Option of the Holder
Upon a Fundamental Change and Purchase of Securities at the Option of the Holder.




          (a) Notice of Purchase Date or Fundamental Change. The Company shall send notices
(each, a “Company Notice”) to the Holders (and to beneficial owners as required by applicable law)
at their addresses shown in the Securities Register maintained by the Registrar, and delivered to
the Trustee and Paying Agent, not less than 20 Business Days prior to each Purchase Date, or on or
before the 20th day after the occurrence of the Fundamental Change, as the case may be (each such
date of delivery, a “Company Notice Date”). Each Company Notice shall include a form of Purchase
Notice or Fundamental Change Purchase Notice to be completed by a Holder and shall state:





               (1) the applicable Purchase Price or Fundamental Change Purchase Price, excluding
accrued and unpaid interest, and any Contingent Interest and Additional Interest, Conversion
Rate at the time of such notice and any expected adjustments to the Conversion Rate and, to
the extent known at the time of such notice, the amount of interest (including any
Contingent Interest and Additional Interest), if any, that will be payable with respect to
the Securities on the applicable Purchase Date or Fundamental Change Purchase Date;




               (2) the applicable Purchase Date or Fundamental Change Purchase Date and the last date
on which a Holder may exercise its repurchase rights under Section 11.1 or
11.2, as applicable;




               (3) the name and address of the Paying Agent and the Conversion Agent;




               (4) that Securities must be surrendered to the Paying Agent to collect payment of the
Purchase Price or Fundamental Change Purchase Price;




               (5) that Securities as to which a Purchase Notice or Fundamental Change Purchase Notice
has been given may be converted only if the applicable Purchase Notice or Fundamental Change
Purchase Notice has been withdrawn in accordance with the terms of this Indenture;




               (6) that the Purchase Price or Fundamental Change Purchase Price for any Securities as
to which a Purchase Notice or a Fundamental Change Purchase Notice, as applicable, has been
given and not withdrawn shall be paid by the Paying Agent promptly following the later of
the Purchase Date or Fundamental Change Purchase Date, as applicable, or the time of
book-entry transfer or delivery of such Securities;









 



63



               (7) the procedures the Holder must follow under Sections 11.1 or 11.2,
as applicable, and Section 11.3;




               (8) briefly, the conversion rights of the Securities;




               (9) that, unless the Company defaults in making payment of such Purchase Price or
Fundamental Change Purchase Price on Securities covered by any Purchase Notice or
Fundamental Change Purchase Notice, as applicable, interest (including any Contingent
Interest and Additional Interest), will cease to accrue on and after the Purchase Date or
Fundamental Change Purchase Date, as applicable;




               (10) the CUSIP or ISIN number of the Securities;




               (11) the procedures for withdrawing a Purchase Notice or Fundamental Change Purchase
Notice; and




               (12) in the case of a Company Notice pursuant to Section 11.1, the events
causing a Fundamental Change and the date of the Fundamental Change.



          Simultaneously with providing such Company Notice, the Company will publish a notice
containing the information in such Company Notice in a newspaper of general circulation in The City
of New York or publish such information on its then existing website or through such other public
medium as it may use at the time.




          At the Company’s request, made at least five Business Days prior to the date upon which such
notice is to be mailed, and at the Company’s expense, the Paying Agent shall give the Company
Notice in the Company’s name; provided, however, that, in all cases, the text of the Company Notice
shall be prepared by the Company.




          (b) Effect of Purchase Notice or Fundamental Change Purchase Notice; Effect of Event of
Default. Upon receipt by the Company of the Purchase Notice or Fundamental Change Purchase
Notice specified in Section 11.2(a) or Section 11.1(b), as applicable, the Holder
of the Securities in respect of which such Purchase Notice or Fundamental Change Purchase Notice,
as the case may be, was given shall (unless such Purchase Notice or Fundamental Change Purchase
Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Fundamental Change Purchase Price with respect to such Securities.
Such Purchase Price or Fundamental Change Purchase Price shall be paid by the Paying Agent to such
Holder promptly following the later of (x) the Purchase Date or the Fundamental Change Purchase
Date, as the case may be, with respect to such Securities (provided the conditions in Section
11.2(a) or Section 11.1(b), as applicable, have been satisfied) and (y) the time of
delivery or book-entry transfer of such Securities to the Paying Agent by the Holder thereof in the
manner required by Section 11.2(a) or Section 11.1(b), as applicable. Securities in
respect of which a Purchase Notice or Fundamental Change Purchase Notice, as the case may be, has
been given by the Holder thereof may not be converted on or after the date of the delivery of such
Purchase Notice or Fundamental Change Purchase Notice, as the case may be, unless such Purchase
Notice or Fundamental Change Purchase Notice, as the case may be, has first been validly withdrawn
as specified in the following two paragraphs.










 



64




          A Purchase Notice or Fundamental Change Purchase Notice, as the case may be, may be withdrawn
by means of a written notice of withdrawal delivered to the office of the Paying Agent at any time
prior to 5:00 p.m., New York City time, on the Business Day prior to the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, to which it relates specifying:





               (1) the principal amount of the Securities with respect to which such notice of
withdrawal is being submitted;




               (2) if certificated, the certificate number of the Securities in respect of which such
notice of withdrawal is being submitted, or, if not certificated, the written notice of
withdrawal must comply with appropriate DTC procedures; and




               (3) the principal amount, if any, of such Securities which remains subject to the
original Purchase Notice or Fundamental Change Purchase Notice, as the case may be, and
which has been or shall be delivered for purchase by the Company.



          There shall be no purchase of any Securities pursuant to Section 11.2 or Section
11.1, if an Event of Default has occurred and is continuing (other than a default that is cured
by the payment of the Purchase Price or Fundamental Change Purchase Price, as the case may be). The
Paying Agent shall promptly return to the respective Holders thereof any Securities (x) with
respect to which a Purchase Notice or Fundamental Change Purchase Notice, as the case may be, has
been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default that is cured by the payment of the Purchase Price or
Fundamental Change Purchase Price, as the case may be) in which case, upon such return, the
Purchase Notice or Fundamental Change Purchase Notice with respect thereto shall be deemed to have
been withdrawn.




          (c) Securities Purchased in Part. Any Securities that are to be purchased only in part
shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee or the Authenticating Agent
shall authenticate and deliver to the Holder of such Securities, without service charge, a new
Security or Securities, of any authorized denomination as requested by such Holder in aggregate
principal amount equal to, and in exchange for, the portion of the principal amount of the
Securities so surrendered which is not purchased or redeemed.




          (d) Covenant to Comply with Securities Laws Upon Purchase of Securities. In
connection with any offer to purchase Securities under Section 11.2 or Section
11.1, the Company shall, to the extent applicable, (a) comply with Rules 13e-4 and 14e-1 (and
any successor provisions thereto) under the Exchange Act, if applicable; (b) file the related
Schedule TO (or any successor schedule, form or report) under the Exchange Act, if applicable; and
(c) otherwise comply with all applicable federal and state securities laws so as to permit the
rights and obligations under Section 11.2 or Section 11.1 to be exercised in the
time and in the manner specified in Section 11.2 or Section 11.1.










 



65




          (e) Repayment to the Company. The Trustee and the Paying Agent shall return to the
Company any cash or property that remains unclaimed as provided in paragraph 10 of the Securities,
together with interest that the Trustee or Paying Agent, as the case may be, has agreed to pay, if
any, held by them for the payment of a Purchase Price or Fundamental Change Purchase Price, as the
case may be; provided, however, that to the extent that the aggregate amount of cash or property
deposited by the Company pursuant to Section 11.2(f) or Section 11.1(c), as
applicable, exceeds the aggregate Purchase Price or Fundamental Change Purchase Price, as the case
may be, of the Securities or portions thereof which the Company is obligated to purchase as of the
Purchase Date or Fundamental Change Purchase Date, as the case may be, then promptly on and after
the Business Day following the Purchase Date or Fundamental Change Purchase Date, as the case may
be, the Trustee and the Paying Agent shall return any such excess to the Company together with
interest that the Trustee or Paying Agent, as the case may be, has agreed to pay, if any.




          (f) Officers’ Certificate. At least five Business Days before the Company Notice
Date, the Company shall deliver an Officers’ Certificate to the Trustee specifying whether the
Company desires the Trustee to give the Company Notice required by Section 11.3(a) herein.




          (g) Company’s Determination Final and Binding. All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Securities for repurchase shall be
determined by the Company in good faith, whose determination shall be final and binding absent
manifest error.




ARTICLE XII




Conversion




          SECTION 12.1.   Conversion of Securities.




          (a) Right to Convert. A Holder may convert its Securities at any time during which the
conditions stated in paragraph 7 of the Securities are met. Whenever the Securities shall become
convertible upon one or more of the conditions stated in paragraph 8 of the Securities being met,
the Company or, at the Company’s request, the Trustee in the name and at the expense of the
Company, shall notify the Holders of the event triggering such convertibility in the manner
provided in Section 13.2, and the Company shall also publicly announce such information by
publication on the Company’s website or through such other public medium as it may use at such
time. Any notice so given shall be conclusively presumed to have been duly given, whether or not
the Holder receives such notice.




          A Holder converting its Securities must follow the procedures set forth in paragraph 8 of the
Securities. A Holder may convert a portion of the principal amount of Securities if the portion is
$1,000 or a multiple of $1,000.




          The cash payable, and the number of shares of Common Stock issuable, if any, upon conversion
of a Security shall be determined as set forth in Section 12.1(c).










 



66




          (b) Conversion Procedures. To convert Securities, a Holder must satisfy the
requirements in paragraph 8 of the Securities. The date on which the Holder satisfies all those
requirements is the conversion date (the “Conversion Date”).




          On conversion of Securities, any accrued and unpaid interest with respect to the converted
Securities shall not be canceled, extinguished or forfeited, but rather shall be deemed to be paid
in full to the Holder thereof through delivery of cash, or a combination of cash and the Common
Stock (together with the cash payment, if any, in lieu of fractional shares), in exchange for the
Securities being converted pursuant to the provisions hereof, and the cash and the Fair Market
Value (as determined by the Board of Directors, whose determination shall be conclusive evidence of
such Fair Market Value and which shall be evidenced by an Officers’ Certificate delivered to the
Trustee) of any shares of Common Stock (together with any such cash payment in lieu of fractional
shares) shall be treated as issued, to the extent thereof, first in exchange for interest accrued
and unpaid through the Conversion Date, and the balance, if any, of such cash and such Fair Market
Value (determined as aforesaid) of any such Common Stock (and any such cash payment) shall be
treated as issued in exchange for the principal amount of the Securities being converted pursuant
to the provisions hereof. Notwithstanding the foregoing, a Holder shall be entitled to receive
accrued and unpaid interest, including any Contingent Interest and Additional Interest, in respect
of a Security as may be payable to such Holder if the Company calls such Security for redemption
and such Holder converts its Security prior to the Redemption Date.




          If a Holder converts more than one Security at the same time, the cash and number of shares of
Common Stock issuable upon the conversion, if any, shall be based on the total principal amount of
the Securities converted.




          Upon surrender of a Security that is converted in part, the Company shall execute, and the
Trustee or the Authenticating Agent shall authenticate and deliver to the Holder, a new Security in
an authorized denomination equal in principal amount to the unconverted portion of the Security
surrendered.




          If the last day on which Securities may be converted is a legal holiday in a place where a
Conversion Agent is located, the Securities may be surrendered to that Conversion Agent on the next
succeeding day that it is not a legal holiday.




          (c) Payment Upon Conversion. Upon any conversion of Securities, the Company will
deliver to converting Holders in respect of each $1,000 principal amount of Securities being
converted a “Settlement Amount” equal to the sum of the Daily Settlement Amount for each of the 20
Trading Days during the Cash Settlement Averaging Period.




          “Daily Settlement Amount”, for each of the 20 Trading Days during the Cash Settlement
Averaging Period, shall consist of:





     (i) cash equal to the lesser of $50 and the Daily Conversion Value; and




     (ii) to the extent the Daily Conversion Value exceeds $50, a number of shares equal to,
(A) the difference between the Daily Conversion Value and $50, divided by (B) the Last
Reported Sale Price of the Common Stock for such day.









 



67


          “Daily Conversion Value” means, for each of the 20 consecutive Trading Days during the Cash
Settlement Averaging Period, one-twentieth (1/20) of the product of (1) the applicable Conversion
Rate and (2) the Last Reported Sale Prices of the Common Stock (or the consideration into which the
Common Stock has been converted in connection with transactions to which Section 12.4 is
applicable) on such day. For the purposes of determining the Daily Conversion Value the following
provisions shall apply: (i) if the Applicable Consideration includes securities for which the
price can be determined in a manner contemplated by the definition of “Last Reported Sale Price,”
then the value of such securities shall be determined in accordance with the principles set forth
in such definition; (ii) if the Applicable Consideration includes other property (other than
securities as to which clause (i) applies or cash), then the value of such property shall be the
fair market value of such property as determined by the Company’s Board of Directors in good faith;
and (iii) if the Applicable Consideration includes cash, then the value of such cash shall be the
amount thereof.




          The Settlement Amount will be delivered to converting Holders on the third Business Day
immediately following the last day of the Cash Settlement Averaging Period.




          (d) Cash Payments in Lieu of Fractional Shares. The Company shall not issue a
fractional share of Common Stock upon conversion of Securities. Instead the Company shall deliver
cash for the current market value of the fractional share. The current market value of a
fractional share shall be determined to the nearest 1/10,000th of a share by multiplying the Last
Reported Sale Price of a full share of Common Stock on the Trading Day immediately preceding the
Conversion Date by the fractional amount and rounding the product to the nearest whole cent.




          (e) Taxes on Conversion. If a Holder converts Securities, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon
the conversion. However, the Holder shall pay any such tax which is due because the Holder requests
the shares to be issued in a name other than the Holder’s name. The Conversion Agent may refuse to
deliver the certificates representing the Common Stock being issued in a name other than the
Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which shall be
due because the shares are to be issued in a name other than the Holder’s name. Nothing herein
shall preclude any withholding of tax required by law.




          (f) Certain Covenants of the Company. The Company shall, prior to issuance of any
Securities hereunder, and from time to time as may be necessary, reserve out of its authorized but
unissued Common Stock or shares of Common Stock held in treasury, sufficient number of shares of
Common Stock, free of preemptive rights, to permit the conversion of the Securities.




          All shares of Common Stock delivered upon conversion of the Securities shall be newly issued
shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and
shall be free from preemptive rights and free of any lien or adverse claim.




          The Company shall endeavor promptly to comply with all federal and state securities laws
regulating the order and delivery of shares of Common Stock upon the conversion of Securities, if
any, and shall cause to have listed or quoted all such shares of Common Stock on










 



68



each U.S. national securities exchange or over-the-counter or other domestic market on which
the Common Stock is then listed or quoted.




          Before taking any action which would cause an adjustment increasing the Conversion Rate to an
amount that would cause the Conversion Price to be reduced below the then par value, if any, of the
shares of Common Stock issuable upon conversion of the Securities, the Company will take all
corporate action which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.




          SECTION 12.2.   Adjustments to Conversion Rate. The Conversion Rate shall be adjusted
from time to time by the Company as follows (provided that in no event will adjustments to the
Conversion Rate solely by reason of clauses (b) through (e) below result in a Conversion Rate that
exceeds 22.1091 shares per $1,000 principal amount of Securities, subject to adjustment as provided
herein):




          (a) If the Company issues shares of Common Stock as a dividend or distribution on shares of
the Common Stock, or effects a share split or share combination, the Conversion Rate will be
adjusted based on the following formula:









     where,



	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to such event
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after such event
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding immediately prior to such
event
	 
	 	 	 	 
	OS'

	 	=
	 	the number of shares of Common Stock outstanding immediately after such
event.





Such adjustment shall become effective immediately after 9:00 a.m., New York City time, on the
Business Day following the date fixed for such determination. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in treasury by the Company. If
any dividend or distribution of the type described in this Section 12.2(a) is declared but
not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.




          (b) If the Company issues to all or substantially all holders of its Common Stock any rights
or warrants entitling them for a period of not more than 60 calendar days to subscribe for or
purchase shares of Common Stock, at a price per share less than the Last Reported Sale Price of
Common Stock on the Business Day immediately preceding the date of announcement of such issuance, the Conversion Rate will be adjusted based on the following











 



69



formula (provided that the Conversion Rate will be readjusted to the extent that such rights or
warrants are not exercised prior to their expiration):









     where,



	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to such event
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after such event
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding immediately prior to such event
	 
	 	 	 	 
	X   

	 	=
	 	the total number of shares of Common Stock issuable pursuant to such rights
	 
	 	 	 	 
	Y   

	 	=
	 	the number of shares of Common Stock equal to the aggregate price payable to
exercise such rights divided by the average of the Last Reported Sale Prices of Common
Stock over the 10 consecutive Trading Day period ending on the Business Day immediately
preceding the Record Date for the issuance of such rights.





Such adjustment shall be successively made whenever any such rights or warrants are issued and
shall become effective immediately after 9:00 a.m., New York City time, on the Business Day
following the date fixed for such determination. The Company shall not issue any such rights,
options or warrants in respect of shares of Common Stock held in treasury by the Company. To the
extent that shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants been made on the basis
of delivery of only the number of shares of Common Stock actually delivered. If such rights or
warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed.



In determining whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Last Reported Sale Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than cash, to be determined by the
Board of Directors.




          (c) If the Company distributes shares of Capital Stock, evidences of its indebtedness or other
assets or property of the Company to all or substantially all holders of the Common Stock,
excluding:










 



70





               (i) dividends or distributions and rights or warrants referred to in clause (a) or (b)
above; and




               (ii)
dividends or distributions paid exclusively in cash;


then the Conversion Rate will be adjusted based on the following formula:









     where,



	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to such distribution
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after such distribution
	 
	 	 	 	 
	SP0

	 	=
	 	the average of the Last Reported Sale Prices of the Common Stock over the
10 consecutive Trading Day period ending on the Business Day immediately preceding the
record date for such distribution
	 
	 	 	 	 
	   FMV

	 	=
	 	the fair market value (as determined by the Board of Directors) of the shares
of Capital Stock, evidences of indebtedness, assets or property distributed with
respect to each outstanding share of Common Stock on the Record Date for such
distribution.





Such adjustment shall become effective immediately prior to 9:00 a.m., New York City time, on the
Business Day following the date fixed for the determination of stockholders entitled to receive
such distribution.



With respect to an adjustment pursuant to this clause (c) where there has been a payment of a
dividend or other distribution on the Common Stock or shares of Capital Stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other business unit (a
“Spin-Off”) the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the
Record Date fixed for determination of stockholders entitled to receive the distribution will be
increased based on the following formula:









     where,



	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to such distribution
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after such distribution
	 
	 	 	 	 
	     FMV0

	 	=
	 	the average of the Last Reported Sale Prices of the Capital Stock or
similar equity interest distributed to holders of Common Stock applicable












 



71


	 	 	 	 	 
	 

	 	 	 	to one share of Common Stock over the first 10 consecutive Trading Day
period after the effective date of the Spin-Off
	 
	 	 	 	 
	  MP0

	 	=
	 	the average of the Last Reported Sale Prices of Common Stock over the first
10 consecutive Trading Day period after the effective date of the Spin-Off.





Such adjustment shall occur on the tenth Trading Day from, and including, the effective date of the
Spin-Off.




               (d) If any cash dividend or distribution made to all or substantially all holders of Common
Stock during any quarterly fiscal period is in an aggregate amount that, together with other cash
dividends or distributions made during such quarterly fiscal period (the “Current Dividend Rate”),
does not equal $0.16 per share (appropriately adjusted from time to time for any share dividends on
or subdivisions of the Common Stock) (the “Initial Dividend Rate”), the Conversion Rate will be
adjusted based on the following formulas:



                         (i) if the Current Dividend Rate is greater than the Initial Dividend Rate, the Conversion
Rate shall be adjusted based on the following formula:








     where,



	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to the Record Date for such distribution
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after the Record Date for such
distribution
	 
	 	 	 	 
	SP0

	 	=
	 	the Last Reported Sale Prices of the Common Stock on the Trading Day
immediately preceding the ex-dividend date for such distribution
	 
	 	 	 	 
	C   

	 	=
	 	the amount in cash per share the Company distributes to holders of Common
Stock in excess of $0.16 (appropriately adjusted from time to time for any share
dividends on, or subdivisions of, Common Stock).





Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the
record date for such dividend or distribution; provided that if such dividend or distribution is
not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.




                         (ii) if the Current Dividend Rate is less than the Initial Dividend Rate, the Conversion Rate
shall be adjusted based on the following formula:









 



72







     where,



	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to the Record Date for such
distribution
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after the Record Date for such
distribution
	 
	 	 	 	 
	SP0

	 	=
	 	the Last Reported Sale Prices of the Common Stock on the Trading Day
immediately preceding the ex-dividend date for such distribution
	 
	 	 	 	 
	C   

	 	=
	 	the amount in cash per share the Company distributes to holders of Common
Stock that is below $0.16 (appropriately adjusted from time to time for any share
dividends on, or subdivisions of, Common Stock).





Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on

the final Business Day of the relevant fiscal quarter.




          (e) If the Company or any of its Subsidiaries makes a payment in respect of a tender or
exchange offer for Common Stock, to the extent that the cash and value of any other consideration
included in the payment per share of Common Stock exceeds the Last Reported Sale Price of the
Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be
made pursuant to such tender or exchange offer (such last date, the “Expiration Time”), the
Conversion Rate will be increased based on the following formula:









     where,



	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect on the date such tender or exchange offer expires
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect on the day next succeeding the date such tender
or exchange offer expires
	 
	 	 	 	 
	AC

	 	=
	 	the aggregate value of all cash and any other consideration (as determined by
the Board of Directors) paid or payable for shares purchased in such tender or exchange
offer
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding immediately prior to the
date such tender or exchange offer expires












 




73


	 	 	 	 	 
	OS'

	 	=
	 	the number of shares of Common Stock outstanding immediately after the date
such tender or exchange offer expires
	 
	 	 	 	 
	SP'

	 	=
	 	the average of the Last Reported Sale Prices of Common Stock over the 10
consecutive Trading Day period commencing on the Trading Day next succeeding the date
such tender or exchange offer expires.





If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such tender or exchange offer had not been made.



If, however, the application of the foregoing formulas (other than the formula set forth in clause
(d)(ii)) would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate
will be made.



Except as stated herein, the Company will not adjust the Conversion Rate for the issuance of shares
of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or
the right to purchase shares of Common Stock or such convertible or exchangeable securities.




          (f) If a Securityholder elects to exchange its notes in connection with a specified corporate
transaction pursuant to paragraph 8 of the Securities that occurs prior to June 1, 2013, and the
corporate transaction also constitutes a Fundamental Change (without giving effect to the
Fundamental Change 105% Exception), subject to Section 12.3, the Conversion Rate shall be
increased by an additional number of shares of Common Stock (the “Additional Shares”) as described
below, provided that if the Stock Price is greater than $___or less than $___(subject in each
case to adjustment as described below), the number of Additional Shares shall be zero. Any
conversion occurring at a time when the Securities would be convertible in light of the expected or
actual occurrence of a Fundamental Change will be deemed to have occurred in connection with such
Fundamental Change notwithstanding the fact that a Security may then be convertible because another
condition to conversion has been satisfied.




          The number of Additional Shares will be determined by reference to the table attached as
Schedule A hereto, based on the actual effective date of such corporate transaction (the “Effective
Date”) and the Stock Price with respect to such corporate transaction; provided that if the Stock
Price is between two Stock Price amounts in the table or the Effective Date is between two
Effective Dates in the table, the number of Additional Shares will be determined by a straight-line
interpolation between the number of Additional Shares set forth for the higher and lower Stock
Price amounts and the two dates, as applicable, based on a 365-day year.




          The Stock Prices set forth in the first row of the table in Schedule A hereto and set forth in
the first paragraph of this Section 12.2(f) will be adjusted as of any date on which the
Conversion Rate of the Securities is adjusted pursuant to this Section 12.2. The adjusted
Stock Prices will equal the Stock Prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such
adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of
Additional










 



74



Shares will be adjusted in the same manner as the Conversion Rate as set forth in this
Section 12.2.




          (g) Notwithstanding the foregoing provisions of this Section 12.2, no adjustment shall
be made thereunder, nor shall an adjustment be made to the ability of a Holder of a Security to
convert, for any distribution described therein if the Holder will otherwise participate in the
distribution without conversion of such Holder’s Securities.




          (h) The Company may (but is not required to) make such increases in the Conversion Rate, in
addition to those required by clauses (a) through (e) of this Section 12.2 as the Board of
Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock
or rights to purchase Common Stock in connection with a dividend or distribution of shares (or
rights to acquire shares) or any similar event treated as such for income tax purposes.




          To the extent permitted by applicable law, the Company from time to time may increase the
Conversion Rate by any amount for any period of at least 20 days if the Board of Directors shall
have made a determination that such increase would be in the best interests of the Company, which
determination shall be conclusive.





     (i) No adjustment to the Conversion Rate need be made:




     (1) upon the issuance of any shares of Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on securities of the
Company and the investment of additional optional amounts in shares of Common Stock under
any plan;




     (2)
upon the issuance of any shares of Common Stock or options or rights to purchase shares of Common Stock pursuant to any present or future employee, director or consultant
benefit plan or program of or assumed by the Company or any of its Subsidiaries;




     (3) upon the issuance of any shares of Common Stock pursuant to any option, warrant,
right, or exercisable, exchangeable or convertible security not described in (ii) above and
outstanding as of the date the Securities were first issued;




     (4) for a change in the par value of the Common Stock; or




     (5) for accrued and unpaid interest (including any Contingent Interest or Additional
Interest).


To the extent the Securities become convertible into cash, assets or property (other than capital
stock of the Company or securities to which Section 12.3 applies), no adjustment shall be
made thereafter as to the cash, assets or property. Interest shall not accrue on such cash, assets
or property.




          (i) All calculations under this Article XII shall be made by the Company and shall be
made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the










 



75



case may be. The Company will not be required to make an adjustment in the Conversion Rate
unless the adjustment would require a change of at least 1% in the Conversion Rate. However, the
Company will carry forward any adjustments that are less than 1% of the Conversion Rate and make
such carried forward adjustments, regardless of whether aggregate adjustment is less than 1% within
one year of the first such adjustment carried forward, upon redemption, upon a Fundamental Change
or upon the Stated Maturity.




          (j) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate
setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Unless and until a Trust Officer of the Trustee shall have
received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has
knowledge is still in effect. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the date on which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Rate to the holder of each Security at his last address appearing on
the Securities Register provided for in Section 2.5 of this Indenture, within 20 days after
execution thereof. Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.




          (k) Any case in which this Section 12.2 provides that an adjustment shall become
effective immediately after (1) a record date or Stock Record Date for an event, (2) the date fixed
for the determination of stockholders entitled to receive a dividend or distribution pursuant to
Section 12.2(a), (3) a date fixed for the determination of stockholders entitled to receive
rights or warrants pursuant to Section 12.2(b) or (4) the Expiration Time for any tender or
exchange offer pursuant to Section 12.2(e), (each a “Determination Date”), the Company may
elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x)
issuing to the holder of any Security converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such Adjustment Event over
and above the Common Stock issuable upon such conversion before giving effect to such adjustment
and (y) paying to such holder any amount in cash in lieu of any fraction pursuant to Section
12.1. For purposes of this Section 12.2(k), the term “Adjustment Event” shall mean:





     (i) in any case referred to in clause (1) hereof, the occurrence of such event,




     (ii) in any case referred to in clause (2) hereof, the date any such dividend or
distribution is paid or made,




     (iii) in any case referred to in clause (3) hereof, the date of expiration of such
rights or warrants, and




     (iv) in any case referred to in clause (4) hereof, the date a sale or exchange of
Common Stock pursuant to such tender or exchange offer is consummated and becomes
irrevocable.









 



76


          (l) For purposes of this Section 12.2, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.




          SECTION 12.3.   Conversion After a Public Acquirer Change of Control.




          (a) In the event of a Public Acquirer Change of Control, the Company may, in lieu of
increasing the Conversion Rate by Additional Shares pursuant to Section 12.2(f), elect
(subject to the satisfaction of the provisions of this Section 12.3) to adjust the
Conversion Rate and the related conversion obligation such that from and after the Effective Date
of such Public Acquirer Change of Control, holders will be entitled to convert their Securities, in
accordance with Section 12.1 hereof and paragraph 7 of the Securities into a number of
shares of Public Acquirer Common Stock by adjusting the Conversion Rate in effect immediately
before the Public Acquirer Change of Control by multiplying it by a fraction:





     (i) the numerator of which will be (A) in the case of a share exchange, consolidation,
merger or binding share exchange, pursuant to which the Common Stock is converted into cash,
securities or other property, the average value of all cash and any other consideration (as
determined by the Company’s Board of Directors in the manner contemplated by Section
12.4) paid or payable per share of Common Stock or (B) in the case of any other Public
Acquirer Change of Control, the average of the Last Reported Sale Prices of the Common Stock
for the five consecutive Trading Days prior to but excluding the Effective Date of such
Public Acquirer Change of Control, and




     (ii) the denominator of which will be the average of the Last Reported Sale Prices of
the Public Acquirer Common Stock for the five consecutive Trading Days commencing on the
Trading Day next succeeding the Effective Date of such Public Acquirer Change of Control.



          (b) In order to make the election pursuant to this Section 12.3, the Company and the
issuer of the Public Acquirer Common Stock shall execute with the Trustee a supplemental indenture
(which shall comply with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) providing that each Security shall be exchangeable into Public Acquirer
Common Stock and execute an amendment to the Registration Rights Agreement (to the extent any
Registrable Securities (as defined therein) remain outstanding) to make the provisions thereof to
apply to the Public Acquirer Common Stock. Such supplemental indenture shall provide for
provisions and adjustments which shall be a nearly equivalent as may be practicable to the
provisions and adjustments provided for in this Article XII.




          (c) The Company will notify holders of its election by providing notice as set forth in
Section 12.1 promptly after making the election pursuant to this Section 12.3.




          SECTION 12.4.   Effect of Reclassification, Consolidation, Merger or Sale.










 



77




          (a) Except as otherwise provided in Section 12.3, if any of the following events
occur: (i) any reclassification or change of the outstanding shares of Common Stock (other than a
subdivision or combination to which Section 12.2(c) applies), (ii) any consolidation,
merger, binding share exchange or combination of the Company with another Person as a result of
which holders of Common Stock shall be entitled to receive cash, securities or other property with
respect to or in exchange for such Common Stock, or (iii) any sale or conveyance of all or
substantially all of the properties and assets of the Company to any other Person as a result of
which holders of Common Stock shall be entitled to receive cash, securities or other property with
respect to or in exchange for such Common Stock, then the Company or the successor or purchasing
Person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall
comply with the Trust Indenture Act as in force at the date of execution of such supplemental
indenture) providing that each Security shall be convertible into the kind and amount of cash,
securities or other property (and in the same proportion) receivable (the “Applicable
Consideration”) upon such reclassification, change, consolidation, merger, binding share exchange,
combination, sale or conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Securities (assuming, for such purposes, a sufficient number of authorized
shares of Common Stock are available to convert all such Securities) immediately prior to such
reclassification, change, consolidation, merger, binding share exchange, combination, sale or
conveyance assuming such holder of Common Stock exercised his rights of election, if any, as to the
kind or amount of cash, securities or other property receivable upon such reclassification, change,
consolidation, merger, binding share exchange, combination, sale or conveyance in the same manner
as the majority of the holders of Common Stock or, if there is no such majority, by a plurality of
the holders of Common Stock. Such supplemental indenture shall provide for provisions and
adjustments which shall be as nearly equivalent as may be practicable to the provisions and
adjustments provided for in this Article XII and Article XI and the definition of
Fundamental Change, as appropriate, as determined in good faith by the Company (which determination
shall be conclusive and binding), to make such provisions apply to such other Person if different
from the original issuer of the Securities.




          (b) Notwithstanding the foregoing, in the event of a Public Acquirer Change of Control in
which the Company has made the election pursuant to Section 12.3 to adjust the Conversion
Rate and related exchange obligation, then the Company and the issuer of the Public Acquirer Common
Stock shall execute and deliver to the Trustee a supplemental indenture (accompanied by an Opinion
of Counsel that such supplemental indenture complies with the Trust Indenture Act as in force at
the date of execution of such supplemental indenture) modifying applicable provisions and
adjustments of this Article XII and Article XI and the definition of Fundamental
Change, as appropriate, as determined in good faith by the Company (which determination shall be
conclusive and binding), to make such provisions and adjustments apply to such other Person if
different from the original issuer of the Securities.




          (c) Any issuer of securities included in the Applicable Consideration shall execute an
amendment to the Registration Rights Agreement (to the extent any Registrable Securities (as
defined therein) remain outstanding) to make the provisions thereof applicable to such securities
included in the Applicable Consideration.










 



78




          (d) The Company shall cause notice of the execution of any supplemental indenture required by
this Section 12.4 to be mailed to each holder of Securities, at its address appearing on
the Securities Register provided for in Section 2.5 of this Indenture, within 20 calendar
days after execution thereof. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.




          (e) The above provisions of this Section 12.4 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, binding share exchanges, combinations, sales
and conveyances.




          (f) If this Section 12.4 applies to any event or occurrence, Section 12.2
shall not apply in respect of such event or occurrence.




          SECTION 12.5.   Responsibility of Trustee. The Trustee and any other Conversion Agent
shall not at any time be under any duty or responsibility to the Company or any holder of
Securities to determine the Conversion Rate or whether any facts exist which may require any
adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any
such adjustment when made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent
shall not be accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Security; and the Trustee and any other Conversion Agent make
no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Company to issue, transfer or deliver any cash or shares of
Common Stock or stock certificates or other securities or property upon the surrender of any
Security for the purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article XII. Without limiting the generality of
the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to
determine the correctness of any provisions contained in any supplemental indenture entered into
pursuant to Section 12.4 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders upon the conversion of their
Securities after any event referred to in such Section 12.4(a) or to any adjustment to be
made with respect thereto, but, subject to the provisions of Section 7.1, may accept as
conclusive evidence of the correctness of any such provisions, and shall be protected in relying
upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee
prior to the execution of any such supplemental indenture) with respect thereto.




          SECTION 12.6.   Notice to Holders Prior to Certain Actions. In case:




          (a) the Company shall declare a dividend (or any other distribution) on its Common Stock that
would require an adjustment in the Conversion Rate pursuant to Section 12.2; or




          (b) the Company shall authorize the granting to the holders of all or substantially all of its
Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other
rights or warrants; or










 



79




          (c) of any reclassification or reorganization of the Common Stock of the Company (other than a
subdivision or combination of its outstanding Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of any stockholders of the Company is required,
or of the sale or transfer of all or substantially all of the assets of the Company; or




          (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;



the Company shall cause to be filed with the Trustee and to be mailed to each Holder of Securities
at his address appearing on the Securities Register provided for in Section 2.5 of this
Indenture, as promptly as possible but in any event at least three (3) calendar days prior to the
applicable date hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective or occur, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall
not affect the legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.




          Notwithstanding and in addition to the foregoing, the Company shall be required to give the
notices specified in paragraph 6 of the Securities.




          SECTION 12.7.   Stockholder Rights Plan. To the extent that the Company has a rights
plan in effect upon conversion of the Securities into Common Stock, the Holder will receive, in
addition to the Common Stock, the rights under the rights plan, unless prior to any conversion, the
rights have separated from the Common Stock, in which case the Conversion Rate will be adjusted at
the time of separation as if the Company distributed to all holders of Common Stock, shares of the
Company’s capital stock, evidences of indebtedness or assets as described in Section
12.2(c) above, subject to readjustment in the event of the expiration, termination or
redemption of such rights. In lieu of any such adjustment, the Company may amend such applicable
stockholder rights agreement to provide that upon conversion of the Securities the Holders will
receive, in addition to the Common Stock issuable upon such conversion, the rights which would have
attached to such Common Stock if the rights had not become separated from the Common Stock under
such applicable stockholder rights agreement.




ARTICLE XIII




Miscellaneous




          SECTION 13.1.   Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with another provision which is required to be included in this










 



80



Indenture by the TIA, the provision required by the TIA shall control. Each Subsidiary Guarantor
in addition to performing its obligations under its Subsidiary Guarantee shall perform such other
obligations as may be imposed upon it with respect to this Indenture under the TIA.




          SECTION 13.2.   Notices. Any notice or communication shall be in writing (including
telecopy promptly confirmed in writing) and delivered in person or mailed by first-class mail
addressed as follows:



if to the Company:



Manor Care, Inc.

333 North Summit Street, 16th floor

Toledo, Ohio 43699-0086

Attention: Mr. Paul Ormond, Chief Executive Officer

Telecopy: (419) 536-4671



With a copy to:



Latham & Watkins LLP

Sears Tower, Suite 5800

Chicago, Illinois 60606

Attention: Michael Levin, Esq.

Telecopy: (312) 993-9767



if to the Trustee:



U.S. Bank National Association

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Corporate Trust Group

Telecopy: (617) 603-6667




          For purposes of Section 2.5 (with respect to presentation of Securities for payment or
for registrations of transfer or exchange) if to the Trustee:



U.S. Bank National Association

60 Livingston Avenue

Attention: Specialized Finance

St. Paul, Minnesota 55107

Telecopy: (651) 495-8158

Telephone for confirmation of telecopy:

(651) 495-3513




          The Company or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.










 



81




          Any notice or communication mailed to a registered Securityholder shall be mailed to the
Securityholder at the Securityholder’s address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time prescribed.




          Failure to mail a notice or communication to a Securityholder or any defect in it shall not
affect its sufficiency with respect to other Securityholders. If a notice or communication is
mailed in the manner provided above, it is duly given, whether or not the addressee receives it,
except that notices to the Trustee shall be effective only upon receipt.




          SECTION 13.3.   Communication by Holders with other Holders. Securityholders may
communicate pursuant to TIA § 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 § 312(c).




          SECTION 13.4.   Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Company to the Trustee to take or refrain from taking any action under this
Indenture, the Company shall furnish to the Trustee:





               (1) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with; and




               (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent have been
complied with.



          SECTION 13.5.   Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a covenant or condition provided for in this Indenture
shall include:





               (1) a statement that the individual making such certificate or opinion has read such
covenant or condition;




               (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;




               (3) a statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and




               (4) a statement as to whether or not, in the opinion of such individual, such covenant
or condition has been complied with.



          In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’
Certificate or on certificates of public officials.










 



82




          SECTION 13.6.   When Securities Disregarded. In determining whether the Holders of
the required principal amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be disregarded and deemed not
to be outstanding, except that, for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities which a Trust
Officer of the Trustee actually knows are so owned shall be so disregarded. Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any such determination.




          SECTION 13.7.   Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by, or a meeting of, Securityholders. The Registrar and the Paying
Agent may make reasonable rules for their functions.




          SECTION 13.8.   Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or other
day on which commercial banking institutions are authorized or required to be closed in New York
City or Cleveland, Ohio. 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, Contingent Interest or Additional
Interest, if any, shall accrue for the intervening period. If a Regular Record Date is a Legal
Holiday, the record date shall not be affected.




          SECTION 13.9.   GOVERNING LAW; WAIVER OF JURY TRIAL. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.




          EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY; PROVIDED,
HOWEVER, THAT SUCH WAIVER OF TRIAL BY JURY BY THE COMPANY AND THE TRUSTEE SHALL IN NO WAY LIMIT ANY AND ALL RIGHT TO TRIAL BY JURY OF ANY HOLDER OF THE
SECURITIES IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR
THE TRANSACTION CONTEMPLATED HEREBY.




          SECTION 13.10.   No Recourse Against Others. An incorporator, director, officer,
employee, Affiliate or stockholder of the Company or any Subsidiary Guarantor, solely by reason of
this status, shall not have any liability for any obligations of the Company or any Subsidiary
Guarantor under the Securities, this Indenture or the Subsidiary Guarantees or for any claim based
on, in respect of or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and release shall be
part of the consideration for the issue of the Securities.










 



83




          SECTION 13.11.   Successors. All agreements of the Company in this Indenture and the
Securities shall bind their respective successors. All agreements of the Trustee in this Indenture
shall bind its successors.




          SECTION 13.12.   Multiple Originals. The parties may sign any number of copies of
this Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.




          SECTION 13.13.   Qualification of Indenture. The Company shall qualify this Indenture
under the TIA in accordance with the terms and conditions of the Registration Rights Agreement and
shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the
Company, the Trustee and the Holders) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of this Indenture and the Securities and printing this
Indenture and the Securities. The Trustee shall be entitled to receive from the Company any such
Officers’ Certificates, Opinions of Counsel or other documentation as it may reasonably request in
connection with any such qualification of this Indenture under the TIA.




          SECTION 13.14.   Table of Contents; Headings. The table of contents, cross-reference
sheet and headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not intended to be considered a part hereof and shall not modify
or restrict any of the terms or provisions hereof.




          SECTION 13.15.   Force Majeure. In no event shall the Trustee be responsible or
liable for any failure or delay in the performance of its obligations hereunder arising out of or
caused by, directly or indirectly, forces beyond its control, including, without limitation,
strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts
of God, and interruptions, loss or malfunctions of utilities, communications or computer (software
and hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.




          SECTION 13.16.   Severability Clause. In case any provision in this Indenture shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and such provision shall be
ineffective only to the extent of such invalidity, illegality or unenforceability.










 



84




          IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date
first written above.




	 	 	 	 	 	 
	 	 	MANOR CARE, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Cavanaugh
	 

	 	 	 	 
	 

	 	Name:
	 	Steven M. Cavanaugh
	 

	 	Title:
	 	Vice President and Chief Financial Officer






	 	 	 	 	 	 
	 	 	SUBSIDIARY GUARANTORS
	 	 	(as set forth on Schedule B hereto)
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Richard A. Parr
	 

	 	 	 	 
	 

	 	Name:
	 	Richard A. Parr
	 

	 	Title:
	 	Attorney-in-Fact on behalf of the
	 

	 	GUARANTORS Listed in Schedule 1 hereto






	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy A. Donmoyer
	 

	 	 	 	 
	 

	 	Name:
	 	Timothy A. Donmoyer
	 

	 	Title:
	 	Vice President












 










SCHEDULE A




     * The following table sets forth the stock price and the number of additional shares to be
received per $1,000 principal amount of notes:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Stock Price
	Effective date	 	$45.23	 	$50.00	 	$55.00	 	$60.00	 	$65.00	 	$70.00	 	$75.00	 	$80.00	 	$85.00	 	$90.00	 	$95.00	 	$100.00	 	$105.00	 	$110.00
	 
	June 1, 2006
	 	 	2.0099	 	 	 	1.4368	 	 	 	0.9796	 	 	 	0.6763	 	 	 	0.4700	 	 	 	0.3273	 	 	 	0.2273	 	 	 	0.1561	 	 	 	0.1049	 	 	 	0.0679	 	 	 	0.0412	 	 	 	0.0219	 	 	 	0.0081	 	 	 	0.0000	 
	June 1, 2007
	 	 	2.0099	 	 	 	1.4407	 	 	 	0.9667	 	 	 	0.6559	 	 	 	0.4479	 	 	 	0.3069	 	 	 	0.2093	 	 	 	0.1411	 	 	 	0.0930	 	 	 	0.0586	 	 	 	0.0341	 	 	 	0.0167	 	 	 	0.0043	 	 	 	0.0000	 
	June 1, 2008
	 	 	2.0099	 	 	 	1.4146	 	 	 	0.9172	 	 	 	0.5996	 	 	 	0.3943	 	 	 	0.2594	 	 	 	0.1698	 	 	 	0.1094	 	 	 	0.0684	 	 	 	0.0400	 	 	 	0.0205	 	 	 	0.0071	 	 	 	0.0000	 	 	 	0.0000	 
	June 1, 2009
	 	 	2.0099	 	 	 	1.3953	 	 	 	0.8705	 	 	 	0.5458	 	 	 	0.3439	 	 	 	0.2177	 	 	 	0.1376	 	 	 	0.0848	 	 	 	0.0502	 	 	 	0.0274	 	 	 	0.0119	 	 	 	0.0016	 	 	 	0.0000	 	 	 	0.0000	 
	June 1, 2010
	 	 	2.0099	 	 	 	1.3365	 	 	 	0.7851	 	 	 	0.4616	 	 	 	0.2716	 	 	 	0.1602	 	 	 	0.0940	 	 	 	0.0536	 	 	 	0.0286	 	 	 	0.0128	 	 	 	0.0025	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	June 1, 2011
	 	 	2.0099	 	 	 	1.2215	 	 	 	0.6521	 	 	 	0.3453	 	 	 	0.1843	 	 	 	0.1005	 	 	 	0.0562	 	 	 	0.0318	 	 	 	0.0175	 	 	 	0.0085	 	 	 	0.0026	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	June 1, 2012
	 	 	2.0099	 	 	 	0.9568	 	 	 	0.3812	 	 	 	0.1394	 	 	 	0.0503	 	 	 	0.0199	 	 	 	0.0093	 	 	 	0.0046	 	 	 	0.0017	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	June 1, 2013
	 	 	2.0099	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	 











 





SCHEDULE 1




GUARANTORS




AMERICAN HOSPITAL BUILDING CORPORATION

AMERICAN REHABILITATION GROUP, INC.

AMERICANA HEALTHCARE CENTER OF PALOS TOWNSHIP, INC.

AMERICANA HEALTHCARE CORPORATION OF GEORGIA

ANCILLARY SERVICES MANAGEMENT, INC.

ANCILLARY SERVICES, LLC

ANNANDALE ARDEN, LLC

BAILY NURSING HOME, INC.

BAINBRIDGE ARDEN, LLC

BATH ARDEN, LLC

BINGHAM FARMS ARDEN, LLC

BIRCHWOOD MANOR, INC.

BOOTH LIMITED PARTNERSHIP

CANTERBURY VILLAGE, INC.

CHARLES MANOR, INC.

CHESAPEAKE MANOR, INC.

CLAIRE BRIDGE OF ANDERSON, LLC

CLAIRE BRIDGE OF AUSTIN, LLC

CLAIRE BRIDGE OF KENWOOD, LLC

CLAIRE BRIDGE OF SAN ANTONIO, LLC

CLAIRE BRIDGE OF SUSQUEHANNA, LLC

CLAIRE BRIDGE OF WARMINSTER, LLC

COLEWOOD LIMITED PARTNERSHIP

COLONIE ARDEN, LLC

COMMONWEALTH PHYSICAL THERAPY AND REHABILITATION, INC.

CRESTVIEW HILLS ARDEN, LLC

DEKALB HEALTHCARE CORPORATION

DEVON MANOR CORPORATION

DISTCO, INC.

DIVERSIFIED REHABILITATION SERVICES, INC.

DONAHOE MANOR, INC.

EAST MICHIGAN CARE CORPORATION

EXECUTIVE ADVERTISING, INC.

EYE-Q NETWORK, INC.

FIRST LOUISVILLE ARDEN, LLC

FOUR SEASONS NURSING CENTERS, INC.

FRESNO ARDEN, LLC

GENEVA ARDEN, LLC

GEORGIAN BLOOMFIELD, INC.

GREENVIEW MANOR, INC.

HANOVER ARDEN, LLC

HCR HOME HEALTH CARE AND HOSPICE, INC.

HCR INFORMATION CORPORATION










 



2


HCR MANOR CARE SERVICES, INC. (f/k/a Heartland Care Partners, Inc.)

HCR MANORCARE MEDICAL SERVICES OF FLORIDA, INC.

HCR PHYSICIAN MANAGEMENT SERVICES, INC.

HCR REHABILITATION CORP.

HCRA OF TEXAS, INC.

HCRC INC.

HEALTH CARE AND RETIREMENT CORPORATION OF AMERICA

HEARTLAND CARE, LLC

HEARTLAND EMPLOYMENT SERVICES, LLC

HEARTLAND HOME CARE, INC.

HEARTLAND HOME HEALTH CARE SERVICES, INC.

HEARTLAND HOSPICE SERVICES, INC.

HEARTLAND INFORMATION SERVICES, INC. (f/k/a Heartland Medical Information Services, Inc.)

HEARTLAND MANAGEMENT SERVICES, INC.

HEARTLAND REHABILITATION SERVICES OF FLORIDA, INC.

HEARTLAND REHABILITATION SERVICES OF NEW JERSEY, INC.

HEARTLAND REHABILITATION SERVICES OF VIRGINIA, INC.

HEARTLAND REHABILITATION SERVICES, INC.

HEARTLAND SERVICES CORP.

HEARTLAND THERAPY PROVIDER NETWORK, INC.

HGCC OF ALLENTOWN, INC.

IN HOME HEALTH, INC.

INDUSTRIAL WASTES, INC.

IONIA MANOR, INC.

JACKSONVILLE HEALTHCARE CORPORATION

JEFFERSON ARDEN, LLC

KENWOOD ARDEN, LLC

KNOLLVIEW MANOR, INC.

LEADER NURSING AND REHABILITATION CENTER OF BETHEL PARK, INC.

LEADER NURSING AND REHABILITATION CENTER OF GLOUCESTER, INC.

LEADER NURSING AND REHABILITATION CENTER OF SCOTT TOWNSHIP, INC.

LEADER NURSING AND REHABILITATION CENTER OF VIRGINIA INC.

LINCOLN HEALTH CARE, INC.

LIVONIA ARDEN, LLC

MANOR CARE AVIATION, INC.

MANOR CARE OF AKRON, INC.

MANOR CARE OF AMERICA, INC

MANOR CARE OF ARIZONA, INC.

MANOR CARE OF ARLINGTON, INC.

MANOR CARE OF CANTON, INC.

MANOR CARE OF CHARLESTON, INC.

MANOR CARE OF CINCINNATI, INC.

MANOR CARE OF COLUMBIA, INC.

MANOR CARE OF DARIEN, INC.

MANOR CARE OF DELAWARE COUNTY, INC.










 



3


MANOR CARE OF HINSDALE, INC.

MANOR CARE OF FLORIDA, INC.

MANOR CARE OF KANSAS, INC.

MANOR CARE OF KINGSTON COURT, INC.

MANOR CARE OF LARGO, INC.

MANOR CARE OF LEXINGTON, INC.

MANOR CARE OF MEADOW PARK, INC.

MANOR CARE OF MIAMISBURG, INC

MANOR CARE OF NORTH OLMSTED, INC.

MANOR CARE OF PINEHURST, INC.

MANOR CARE OF ROLLING MEADOWS, INC.

MANOR CARE OF ROSSVILLE, INC.

MANOR CARE OF WILLOUGHBY, INC.

MANOR CARE OF WILMINGTON, INC.

MANOR CARE OF YORK (NORTH), INC.

MANOR CARE OF YORK (SOUTH), INC.

MANOR CARE SUPPLY COMPANY

MANORCARE HEALTH SERVICES OF NORTHHAMPTON COUNTY, INC.

MANORCARE HEALTH SERVICES OF OKLAHOMA, INC.

MANORCARE HEALTH SERVICES OF VIRGINIA, INC.

MANORCARE HEALTH SERVICES, INC.

MARINA VIEW MANOR, INC.

MEDI-SPEECH SERVICE, INC.

MEMPHIS ARDEN, LLC

MILESTONE HEALTH SYSTEMS, INC.

MILESTONE HEALTHCARE, INC.

MILESTONE REHABILITATION SERVICES, INC.

MILESTONE STAFFING SERVICES, INC.

MILESTONE THERAPY SERVICES, INC.

MNR FINANCE CORP.

NAPA ARDEN, LLC

PEAK REHABILITATION, INC.

PERRYSBURG PHYSICAL THERAPY, INC

PNEUMATIC CONCRETE, INC.

PORTFOLIO ONE, INC.

REHABILITATION ADMINISTRATION CORPORATION

REINBOLT & BURKAM, INC.

RICHARDS HEALTHCARE, INC.

RIDGEVIEW MANOR, INC.

ROANOKE ARDEN, LLC

ROLAND PARK NURSING CENTER, INC.

RVA MANAGEMENT SERVICES, INC.

SAN ANTONIO ARDEN, LLC

SILVER SPRING — WHEATON NURSING HOME, INC.

SILVER SPRING ARDEN, LLC

SPRINGHILL MANOR, INC.










 




4



STEWALL CORPORATION

STRATFORD MANOR, INC.

STUTEX CORP.

SUN VALLEY MANOR, INC.

SUSQUEHANNA ARDEN LLC

TAMPA ARDEN, LLC

THE NIGHTINGALE NURSING HOME, INC.

THERASPORT PHYSICAL THERAPY, INC.

THREE RIVERS MANOR, INC.

TOTALCARE CLINICAL LABORATORIES, INC.

TUSCAWILLA ARDEN, LLC

WALL ARDEN, LLC

WARMINSTER ARDEN LLC

WASHTENAW HILLS MANOR, INC.

WHITEHALL MANOR, INC.

WILLIAMSVILLE ARDEN, LLC










 





EXHIBIT A




[FORM OF FACE OF SECURITY]




[Restricted Securities Legend, if applicable]




[Global Security Legend, if applicable]



THIS SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF SECTIONS 1272, 1273,
AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. IN ADDITION, THIS SECURITY IS SUBJECT
TO THE RULES FOR DEBT INSTRUMENTS WITH CONTINGENT PAYMENTS UNDER TREASURY REGULATIONS SECTION
1.1275-4(b).
THE COMPANY AGREES, AND BY PURCHASING A BENEFICIAL OWNERSHIP INTEREST IN THE SECURITIES EACH HOLDER
OF SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO
TREAT THE SECURITIES AS INDEBTEDNESS THAT IS SUBJECT TO TREAS. REG. SEC.
1.1275-4 (THE “CONTINGENT PAYMENT REGULATIONS”) AND, FOR PURPOSES OF THE CONTINGENT PAYMENT
REGULATIONS, TO TREAT THE CASH AND FAIR MARKET VALUE OF ANY STOCK BENEFICIALLY RECEIVED BY A
BENEFICIAL HOLDER UPON ANY CONVERSION OF THE SECURITIES AS A CONTINGENT PAYMENT, (2) TO ACCRUE
INTEREST WITH RESPECT TO THE SECURITIES AS ORIGINAL ISSUE DISCOUNT ON A CONSTANT YIELD BASIS USING
THE COMPARABLE YIELD OF 7.23% PER ANNUM COMPOUNDED SEMI-ANNUALLY AND (3) TO BE BOUND BY THE
COMPANY’S DETERMINATION OF THE “COMPARABLE YIELD” AND “PROJECTED PAYMENT SCHEDULE,” WITHIN THE
MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THE SECURITIES. THE COMPANY AGREES
TO PROVIDE PROMPTLY TO HOLDER OF SECURITIES, UPON WRITTEN REQUEST, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH
WRITTEN REQUEST SHOULD BE SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: MANOR CARE, INC., 333 NORTH
SUMMIT STREET, TOLEDO, OHIO 43604-2617,
ATTENTION: CHIEF FINANCIAL OFFICER.







			
	No. [___]

	 	Principal Amount $[___], as





revised by the Schedule of Increases and Decreases in Global Security attached hereto




CUSIP NO.: [_________]

ISIN: [___________]




_____% Convertible Senior Notes due 2036




          Manor Care, Inc., a Delaware corporation, promises to pay to [___], or registered
assigns, the principal sum of [___] Dollars, as revised by the Schedule of Increases
and Decreases in Global Security attached hereto, on June 1, 2036.



Interest Payment Dates: June 1 and December 1

Regular Record Dates: May 15 and November 15




          Additional provisions of this Security are set forth on the other side of this Security.




	 	 	 	 	 
	 	MANOR CARE, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 



TRUSTEE’S CERTIFICATE OF AUTHENTICATION




U.S. BANK NATIONAL ASSOCIATION

as Trustee, certifies

that this is one of

the Securities referred

to in the Indenture.




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 






Date: [                    ]













 









A-2




[FORM OF REVERSE SIDE OF SECURITY]




2% Convertible Senior Notes due 2036





	1.	 	Interest





          Manor Care, 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 of 2% per annum.




          The Company will pay interest semiannually on June 1 and December 1 of each year commencing
December 1, 2006. Interest on the Securities will accrue from the most recent date to which
interest has been paid on the Securities or, if no interest has been paid, from May 17, 2006.
Interest will be computed on the basis of a 360-day year of twelve 30-day months.




          Interest on Securities converted after the close of business on a Regular Record Date, but
prior to the opening of business on the corresponding interest payment date, will be paid to the
Holder on the Regular Record Date but, upon conversion, the Holder must pay the Company the
interest which has accrued and will be paid to the Holder on such interest payment date. No such
payment need be made with respect to Securities in respect of which a Redemption Date has been
declared that falls within such period or on such interest payment date. A Holder shall be
entitled to receive accrued and unpaid interest, including any Contingent Interest and Additional
Interest, in respect of a Security (A) if the Company calls such Security for redemption and such
Holder converts such Security on or prior to the Redemption Date or (B) if the Company establishes
a Fundamental Change Purchase Date during the period from the close of business on any Regular
Record Date to the opening of business on the corresponding interest payment date has been
established that falls within this period or on such interest payment day and such Holder converts
its Security prior to the Fundamental Change Purchase Date or (C) to the extent of any overdue
interest, if any overdue interest exists at the time of conversion with respect to a Security.




          If the principal hereof or any portion of such principal is not paid when due (whether upon
acceleration, upon the date set for payment of the redemption price pursuant to paragraph 5 hereof,
upon the date set for payment of a Purchase Price or Fundamental Change Purchase Price pursuant to
paragraph 6 hereof or upon the Stated Maturity of this Security) or if interest (including
Contingent Interest and Additional Interest, if any) due hereon or any portion of such interest is
not paid when due in accordance with this paragraph, then in each such case the overdue amount
shall bear interest at the rate of 2% per annum, compounded semiannually (to the extent that the
payment of such interest shall be legally enforceable), which interest shall accrue from the date
such overdue amount was due to the date payment of such amount, including interest thereon, has
been made or duly provided for. All such interest shall be payable on demand.





	2.	 	Method of Payment





          By no later than 10:00 a.m. (New York City time) on the date on which any principal of or
interest (including any Contingent Interest and Additional Interest, if any), on any Security is
due and payable, the Company shall deposit with the Paying Agent money sufficient











 



A-3



to pay such amount. The Company will pay interest (including any Contingent Interest and
Additional Interest) (except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the May 15 or November 15 next preceding the interest
payment date even if Securities are cancelled, repurchased or redeemed after the record date and on
or before the interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and private debts.
Payments in respect of Securities represented by a Global Security (including principal and
interest (including any Contingent Interest and Additional Interest), if any, will be made by wire
transfer of immediately available funds to the accounts specified by The Depository Trust Company.
The Company will pay principal of Definitive Securities at the office or agency designated by the
Company in the Borough of Manhattan, The City of New York. Interest (including Contingent Interest
and Additional Interest, if any), on Definitive Securities will be payable (i) to Holders having an
aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these
Securities and (ii) to Holders having an aggregate principal amount of more than $5,000,000, either
by check mailed to each Holder or, upon application by a Holder to the Registrar not later than the
relevant record date, by wire transfer in immediately available funds to that Holder’s account
within the United States, which application shall remain in effect until the Holder notifies, in
writing, the Registrar to the contrary.





	3.	 	Paying Agent, Registrar, Conversion Agent, Authenticating Agent and Bid Agent 





          Initially, U.S. Bank National Association (the “Trustee”), will act as Trustee, Paying Agent,
Registrar, Conversion Agent, Authenticating Agent and Bid Agent. The Company may appoint and
change any Paying Agent, Registrar or co-registrar, Conversion Agent, Authenticating Agent or Bid
Agent without notice to any Securityholder. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar or co-registrar, Conversion Agent or Authenticating Agent, subject to the
terms of the Indenture. Neither the Company nor any of its Affiliates may act as Bid Agent.





	4.	 	Indenture





          The Company issued the Securities under an Indenture dated as of May 17, 2006 (as it may be
amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”),
among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture
(the “Act”). Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the Act for a statement of those terms.




          The Securities are general unsecured senior obligations of the Company limited to $250.0
million aggregate principal amount, except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other Securities pursuant to
Section 2.8, 2.9, 2.10, 2.11, 2.13, 5.8, 9.5, 11.3 or 12.1 of the Indenture. The Securities will
be treated as a single class of securities under the Indenture. The Indenture imposes certain
limitations on, among other things, consolidation, mergers and sale of assets of the Company.










 



A-4




          To guarantee the due and punctual payment of the principal and interest (including any
Contingent Interest) and Additional Interest, if any, on the Securities and all other amounts
payable by the Company under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Subsidiary Guarantors have unconditionally guaranteed (and future
guarantors, together with the Subsidiary Guarantors, will unconditionally Guarantee), jointly and
severally, such obligations on a senior basis pursuant to the terms of the Indenture.





	5.	 	Contingent Interest





          The Company shall pay Contingent Interest in cash to the Holders in respect of any six-month
period from June 1 to and including November 30 and from December 1 to and including May 31,
commencing with the six-month period beginning June 1, 2013, if the average Securities Price for
the Applicable Five Trading Day Period with respect to such interest period equals 120% or more of
$1,000 principal amount of Securities. The amount of Contingent Interest payable per $1,000
principal amount of Securities in respect of any interest period shall equal 0.125% of the average
Securities Price for the Applicable Five Day Trading Period with respect to such interest period.
Contingent interest, if any, will accrue from June 1 or December 1, as applicable, and will be
payable on the next succeeding December 1 or June 1 interest payment date, as the case may be.
Contingent interest will be paid to the person in whose name a Security is registered at the close
of business on May 15 or November 15, as the case may be, immediately preceding the relevant
interest payment date on which Contingent Interest is payable. All payments of Contingent Interest
shall be made in cash.




          Upon determination that Holders will be entitled to receive Contingent Interest during an
interest period, on or prior to the first day of such interest period, the Company shall notify the
Trustee and issue a press release through PR Newswire Association LLC, Dow Jones & Company, Inc. or
Bloomberg Business News containing such information with respect to the payment of Contingent
Interest or publish such information on its web site or through such other public medium as the
Company may use at that time.





	6.	 	Redemption





          No sinking fund is provided for the Securities. The Securities will be redeemable, at the
option of the Company, in whole at any time or in part from time to time, at any time on or after
June 1, 2013, on at least 35 days but not more than 60 days’ prior notice mailed to the registered
address of each Holder of Securities to be so redeemed, at a redemption price equal to 100% of
their principal amount plus accrued but unpaid interest (including any Contingent Interest and
Additional Interest), if any, to but excluding the Redemption Date.




          In the case of any partial redemption, selection of the Securities for redemption will be made
by the Trustee by lot, or on a pro rata basis, or by another method as the Trustee shall deem to be
fair and appropriate, although no Securities of $1,000 in original principal amount or less will be
redeemed in part. If any Security is to be redeemed in part only, the notice of redemption
relating to such Security shall state the portion of the principal amount thereof to be redeemed.
A new Security in principal amount equal to the unredeemed portion











 



A-5



thereof will be issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the Redemption Date, interest (including any Contingent Interest and
Additional Interest), if any, will cease to accrue on Securities or portions thereof called for
redemption as long as the Company has deposited with the Paying Agent funds in satisfaction of the
applicable redemption price pursuant to the Indenture.





	7.	 	Purchase By the Company at the Option of the Holder; Purchase at the Option of the Holder
Upon a Fundamental Change





          (a) Subject to the terms and conditions of the Indenture, a Holder shall have the option to
require the Company to purchase the Securities held by such Holder on June 1, 2013 (the “Purchase
Date”) at a purchase price (the “Purchase Price”) equal to 100% of the principal amount of the
Securities to be purchased plus any accrued and unpaid interest (including any Contingent Interest)
and Additional Interest, if any, to such Purchase Date, upon delivery of a Purchase Notice
containing the information set forth in the Indenture, from the opening of business on the date
that is 20 Business Days prior to such Purchase Date until the close of business on the fifth
Business Day prior to such Purchase Date and upon delivery of the Securities to the Paying Agent by
the Holder as set forth in the Indenture. The Company will pay the Purchase Price in cash for any
Securities to be purchased.




          Securities in denominations larger than $1,000 principal amount may be purchased in part, but
only in integral multiples of $1,000 principal amount.




          (b) If a Fundamental Change shall occur at any time, each Holder shall have the right, at such
Holder’s option and subject to the terms and conditions of the Indenture, to require the Company to
purchase any or all of such Holder’s Securities or any portion of the principal amount thereof that
is equal to $1,000 or an integral multiple of $1,000 on the day that is 35 Business Days after the
date of the Company Notice of the occurrence of the Fundamental Change (subject to extension to
comply with applicable law) for a Fundamental Change Purchase Price equal to the principal amount
of Securities purchased plus, unless the Fundamental Change Purchase Date is between a Regular
Record Date and the interest payment date to which it relates, accrued and unpaid interest,
including any Contingent Interest, and Additional Interest, if any, to but excluding the
Fundamental Change Purchase Date, which Fundamental Change Purchase Price shall be paid by the
Company in cash.




          (c) Holders have the right to withdraw any Purchase Notice or Fundamental Change Purchase
Notice, as the case may be, by delivery to the Paying Agent of a written notice of withdrawal in
accordance with the provisions of the Indenture.




          (d) If cash sufficient to pay a Fundamental Change Purchase Price or Purchase Price, as the
case may be, of all Securities or portions thereof to be purchased as of the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, is deposited with the Paying Agent on the
Business Day following the Purchase Date or the Fundamental Change Purchase Date, as the case may
be, interest (including any Contingent Interest and Additional Interest), if any, shall cease to
accrue on such Securities (or portions thereof) on and after such date, and the Holder thereof
shall have no other rights as such (other than the right to receive the











 



A-6



Purchase Price or Fundamental Change Purchase Price, as the case may be, upon surrender of
such Security).





	8.	 	Conversion





          Subject to the procedures set forth in the Indenture, a Holder may convert Securities into
Common Stock of the Company at any time on or before 5:00 p.m., New York City time, on the Trading
Day immediately preceding the maturity date if at least one of the following conditions is
satisfied on the Conversion Date:




          (a) the average of the Last Reported Sale Prices for the Common Stock for the 20 Trading Days
immediately prior to the Conversion Date is greater than or equal 130% of the Conversion Price per
share of Common Stock on such Conversion Date;




          (b) the credit ratings assigned to the Securities by of Moody’s Investors Service, Inc. or
Standard & Poor’s Ratings Services are lower than Ba3 and BB, respectively, or the Securities are
no longer rated by at least one of these rating agencies;




          (c) the Securities have been called for redemption by the Company, in which case a Holder may
convert Securities into Common Stock at any time prior to the close of business on the third
Trading Day prior to the Redemption Date;




          (d) the Company elects to (i) distribute to all or substantially all holders of Common Stock
rights entitling them to purchase, for a period expiring within 60 days after the date of such
distribution, Common Stock at less than the Last Reported Sale Price at the time of such
distribution or (ii) distribute to all or substantially all holders of Common Stock assets, debt
securities or rights to purchase securities of the Company, which distribution has a per share
value as determined by the Company’s Board of Directors exceeding 10% of the Last Reported Sale
Price of the Common Stock on the day preceding the declaration date for such distribution. In the
case of the foregoing clauses (i) and (ii), the Company must notify the Holders at least 20
Business Days prior to the ex-dividend date for such distribution. Once the Company has given such
notice, Holders may surrender their Securities for conversion at any time thereafter until the
earlier of 5:00 p.m., New York City time, on the Business Day immediately prior to the ex-dividend
date or the Company’s announcement that such distribution will not take place. The ex-dividend date
is the first date upon which a sale of the Common Stock does not automatically transfer the right
to receive the relevant dividend from the seller of the Common Stock to its buyer;




          (e) the Company becomes a party to a consolidation, merger or binding share exchange pursuant
to which the Common Stock would be converted into cash or property (other than securities), in
which case a Holder may surrender Securities for conversion at any time from and after the actual
effective date of the transaction until 30 calendar days after the actual effective date of such
transaction;




          (f) the Company becomes a party to a consolidation, merger, share exchange or transfer also
constituting a Fundamental Change (without giving effect to the Fundamental Change 105% Exception),
in which case a Holder may surrender Securities for conversion at any












 



A-7



time from and after the actual effective date of the transaction until the repurchase date
corresponding to such Fundamental Change; or




          (g) a Fundamental Change of the type described in clauses (1) and (5) of the definition of
Fundamental Change occurs, in which event, the Holder may surrender Securities for conversion at
any time beginning on the actual effective date of such Fundamental Change until and including the
date which is 30 calendar days after the actual effective date of such transaction or if, later,
until the Fundamental Change Purchase Date corresponding to such Fundamental Change.




          Securities in respect of which a Holder has delivered a notice of exercise of the option to
require the Company to purchase such Securities pursuant to paragraph 7 hereof and Section 11.1 or
Section 11.2 of the Indenture may be converted only if the notice of exercise is withdrawn in
accordance with the terms of the Indenture.




          The initial Conversion Rate is 20.0992 shares of our Common Stock per $1,000 principal amount
of Securities, subject to adjustment in certain events described in the Indenture. Upon
conversion, the Company will pay cash and shares of Common Stock, if any, based on a Daily
Conversion Value calculated on a proportionate basis for each day of the 20-day Cash Settlement
Averaging Period, as set forth in the Indenture. The Company shall deliver cash or a check in lieu
of any fractional share of Common Stock.




          Holders of Securities at the close of business on a Regular Record Date will receive payment
of interest (including any Contingent Interest and Additional Interest) payable on the
corresponding interest payment date notwithstanding the conversion of such Securities at any time
after the close of business on such Regular Record Date. Securities surrendered for conversion
during the period from the close of business on any Regular Record Date to the opening of business
on the corresponding interest payment date (except for (i) Securities in respect of which a
Redemption Date has been declared that falls within this period or on such interest payment date,
(ii) Securities in respect of which a Fundamental Change Purchase Date has been established that
falls within this period or on such interest payment day or (iii) to the extent of any overdue
interest, if any overdue interest exists at the time of conversion with respect to a Security) must
be accompanied by payment of an amount equal to the interest (including any Contingent Interest and
Additional Interest) that the Holder is to receive on the Securities. Except where Securities
surrendered for conversion must be accompanied by payment as described above, no separate payment
for interest or Contingent Interest or Additional Interest on converted Securities will be payable
by the Company on any interest payment date subsequent to the date of conversion. Notwithstanding
the foregoing, a Holder shall be entitled to receive accrued and unpaid interest, including any
Contingent Interest and any Additional Interest in respect of a Security (x) if the Company calls
such Security for redemption and such Holder converts its Security prior to the Redemption Date,
(y) if the Company establishes a Fundamental Change Purchase Date during the period from the close
of business on any Regular Record Date to the opening of business on the corresponding interest
payment date has been established that falls within this period or on such interest payment day and
such Holder converts its Security prior to the Fundamental Change Purchase Date or (z) to the
extent of any overdue interest, if any overdue interest exists at the time of conversion with
respect to a Security.










 



A-8




          To convert Securities that are Global Securities, a beneficial owner or participant must
comply with DTC’s procedures for converting a beneficial interest in the Global Security and, if
required, pay funds equal to interest payable on the next interest payment date to which the
converting beneficial owner or participant is not entitled and, if required, pay all taxes or
duties, if any.




          To convert Definitive Securities, a Holder must (1) complete and manually sign the irrevocable
conversion notice on the back of the Securities (or complete and manually sign a facsimile of such
notice), (2) deliver such notice, which is irrevocable, to the Conversion Agent at the office
maintained by the Conversion Agent for such purpose, and surrender the Securities to the Conversion
Agent, (3) furnish appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee, (4) pay any transfer or similar tax, if required and (5) if
required, pay funds equal to interest payable on the next interest payment date to which the Holder
is not entitled.




          A Holder may convert a portion of the Securities only if the principal amount of such portion
is $1,000 or a multiple of $1,000. No payment or adjustment shall be made for dividends on the
Common Stock except as provided in the Indenture. On conversion of the Securities, that portion of
accrued and unpaid interest attributable to the period from the Issue Date to the Conversion Date
and accrued and unpaid Contingent Interest (and Additional Interest, if any) with respect to the
converted portion of the Securities shall not be canceled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the Holder thereof through the delivery of cash and any
Common Stock (together with any cash payment in lieu of fractional shares) delivered in exchange
for the portion of the Securities being converted pursuant to the terms hereof; and the cash and
Fair Market Value of any such shares of Common Stock (together with any such cash payment in lieu
of fractional shares) shall be treated issued, to the extent thereof, first in exchange for
interest accrued and unpaid through the Conversion Date and accrued and unpaid Contingent Interest
(and Additional Interest, if any), and the balance, if any, of such Fair Market Value (as
determined by the Board of Directors, whose determination shall be conclusive evidence of such Fair
Market Value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of
any such Common Stock (and any such cash payment) shall be treated as issued in exchange for the
principal amount of the Securities being converted pursuant to the provisions hereof.
Notwithstanding the foregoing, a Holder shall be entitled to receive accrued and unpaid interest,
including any Contingent Interest and Additional Interest in respect of a Security if the Company
calls such Security for redemption and such Holder converts its Security prior to the Redemption
Date.





	9.	 	Denominations; Transfer; Exchange





          The Securities are in registered form without coupons in denominations of principal amount of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance
with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees











 



A-9



required by law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange of Securities (i) for a period of 15 days prior to the mailing of a notice of
redemption of Securities selected for redemption under Article V of the Indenture; (ii) so selected
for redemption or, if a portion of any Security is selected for redemption, the portion thereof
selected for redemption; or (iii) surrendered for conversion or, if a portion of any Security is
surrendered for conversion, the portion thereof surrendered for conversion.





	10.	 	Persons Deemed Owners





          The registered Holder of this Security may be treated as the owner of it for all purposes.





	11.	 	Unclaimed Money





          If money for the payment of principal or interest (including any Contingent Interest and
Additional Interest), if any, 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.





	12.	 	Amendment, Waiver





          Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities
may be amended with the written consent of the Holders of at least a majority in principal amount
of the then outstanding Securities and (ii) any default (other than with respect to nonpayment or
in respect of a provision that cannot be amended without the written consent of each Securityholder
affected) or noncompliance with any provision may be waived with the written consent of the Holders
of a majority in principal amount of the then outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Securityholder, the Company and
the Trustee may amend the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add guarantees with respect
to the Securities, or to secure the Securities, or to add additional covenants of the Company or
its Subsidiaries, or surrender rights and powers conferred on the Company or its Subsidiaries, 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, but are not limited to, (i) default in any
payment of interest, including any Contingent Interest or Additional Interest (as required by the
Registration Rights Agreement) on any Security when the same becomes due and payable, and such
default continues for a period of 30 days; (ii) default in payment of principal on the Securities
at Stated Maturity, upon required repurchase pursuant to paragraph 7 or upon optional redemption
pursuant to paragraph 5 of the Securities, upon declaration or otherwise; (iii) the failure by the
Company to comply with its obligations to convert the Securities into cash or a combination of cash
and Common Stock, as applicable, upon the exercise of a holder’s











 



A-10



conversion right and such failure continues for a period of five calendar days; (iv) the
failure by the Company or any Subsidiary Guarantor to comply with its obligations under Article IV
or Section 10.2 of the Indenture; (v) the failure by the Company to comply for 60 days after
written notice with its other agreements contained in the Indenture or under the Securities (other
than those referred to in (i), (ii), (iii) or (iv) above); (vi) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be outstanding, or by
which there may be secured or evidenced any Debt for money borrowed by the Company or any of its
Subsidiaries (other than Non-Recourse Debt of a Non-Recourse Subsidiary), whether such Debt now
exists, or is created after the date of the Indenture, which default (a) is caused by a failure to
pay principal of, or interest (including any Contingent Interest or Additional Interest), if any,
or on such Debt prior to the expiration of the grace period provided in such Debt (“Payment
Default”) or (b) results in the acceleration of such Debt prior to its maturity (the “cross
acceleration provision”) and, in each case, the principal amount of any such Debt, together with
the principal amount of any other such Debt under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $20.0 million or more or its foreign currency
equivalent at the time and such acceleration shall not have been rescinded or annulled within 10
days after written notice of such acceleration has been received by the Company or such Subsidiary;
(vii) certain events of bankruptcy, insolvency or reorganization of the Company (the “bankruptcy
provisions”); or (viii) entry in a court of competent jurisdiction of a final judgment for the
payment of $20.0 million or more rendered against the Company or any Subsidiary, which judgment is
not fully covered by insurance or not discharged or stayed within 90 days after (A) the date on
which the right to appeal thereof has expired if no such appeal has commenced, or (B) the date on
which all rights to appeal have been extinguished (the “judgment default provision”). However, a
default under clause (v) will not constitute 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 (v) hereof after
receipt of such notice.




          If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities by notice to the Company to be
due and payable immediately.




          Securityholders may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives
reasonable indemnity or security. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default or Event of Default
(except a Default or Event of Default in payment of principal or interest (including any Contingent
Interest or Additional Interest), if any, if it determines that withholding notice is in their
interest.





	14.	 	Trustee Dealings with the Company





          Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with and collect obligations owed to it by the Company or its Affiliates












 



A-11



and may otherwise deal with the Company or its Affiliates with the same rights it would have
if it were not Trustee.





	15.	 	No Recourse Against Others





          An incorporator, director, officer, employee, Affiliate or stockholder, of each of the
Company, or any Subsidiary Guarantor, solely by reason of this status, shall not have any liability
for any obligations of the Company or any Subsidiary Guarantor under the Securities, the Indenture
or any Subsidiary Guarantees or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for the issue of the
Securities.





	16.	 	Authentication





          This Security shall not be valid until an authorized signatory of the Trustee manually
authenticates this Security.





	17.	 	Abbreviations





          Customary abbreviations may be used in the name of a Securityholder or an assignee, such as
TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with
rights of survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift
to Minors Act).





	18.	 	CUSIP Numbers





          Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed
the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.





	19.	 	Governing Law





          This Security shall be governed by, and construed in accordance with, the laws of the State of
New York.




          The Company will furnish to any Securityholder upon written request and without charge to the
Securityholder a copy of the Indenture which has in it the text of this Security in larger type.
Requests may be made to:





Manor Care, Inc.

333 North Summit Street, 16th Floor

Toledo, Ohio 43699-0086

Attention: Steven M. Cavanaugh, Chief Financial Officer









 



A-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:                                                             



Signature Guarantee:                                                                                                                                                                



(Signature must be guaranteed)



 




Sign exactly as your name appears on the other side of this Security.



The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved signature guarantee
medallion program), pursuant to S.E.C. Rule 17Ad-15.



In connection with any transfer or exchange of any of the Securities evidenced by this certificate
occurring prior to the date that is two years after the later of the date of original issuance of
such Securities and the last date, if any, on which such Securities were owned by the Company or
any Affiliate of the Company, the undersigned confirms that such Securities are being:



CHECK ONE BOX BELOW:




	 	 	 	 	 	 	 
	o

	 	 	1	 	 	acquired for the undersigned’s own account, without transfer; or
	 
	 	 	 	 	 	 
	o

	 	 	2	 	 	transferred to the Company; or
	 
	 	 	 	 	 	 
	o

	 	 	3	 	 	transferred pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the “Securities
Act”); or
	 
	 	 	 	 	 	 
	o

	 	 	4	 	 	transferred pursuant to and in compliance with Rule 144A under
the Securities Act; or
	 
	 	 	 	 	 	 
	o

	 	 	5	 	 	transferred pursuant to and in compliance with Regulation S
under the Securities Act; or












 



A-13


	 	 	 	 	 	 	 
	o

	 	 	6	 	 	transferred pursuant to another available exemption from the
registration requirements of the Securities Act.





Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities
evidenced by this certificate in the name of any person other than the registered Holder thereof;
provided, however, that if box (5) or (6) is checked, the Trustee or the Company may require, prior
to registering any such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may reasonably request to
confirm that such transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, such as the exemption provided by
Rule 144 under such Act.




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Signature	 	 
	 
	 	 	 	 	 	 
	Signature Guarantee:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	(Signature must be guaranteed)

	 	 	 	Signature	 	 





 



The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved signature guarantee
medallion program), pursuant to S.E.C. Rule 17Ad-15.



TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.




          The undersigned represents and warrants that it is purchasing this Security for its own
account or an account with respect to which it exercises sole investment discretion and that it and
any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by Rule 144A.



                                        

Dated:










 



A-14




[TO BE ATTACHED TO GLOBAL SECURITIES]




SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY




The following increases or decreases in this Global Security have been made:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal Amount of this Global	 	 	Signature of authorized	 
	 	 	Amount of decrease in Principal	 	 	Amount of increase in Principal	 	 	Security following such	 	 	signatory of Trustee or	 
	Date	 	Amount of this Global Security	 	 	Amount of this Global Security	 	 	decrease or increase	 	 	Securities Custodian	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 











 



A-15


FORM OF CONVERSION NOTICE




To:     Manor Care, Inc.




          The undersigned registered holder of this Security hereby exercises the option to convert this
Security, or portion hereof (which is $1,000 principal amount or an integral multiple thereof)
designated below, for cash and shares of Common Stock of Manor Care, Inc., if any, in accordance
with the terms of the Indenture referred to in this Security, and directs that cash and the shares,
if any, issuable and deliverable upon such conversion, and any Securities representing any
unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless
a different name has been indicated below. If cash, shares or any portion of this Security not
converted are to be issued in the name of a Person other than the undersigned, the undersigned
shall pay all transfer taxes payable with respect thereto.




          This notice shall be deemed to be an irrevocable exercise of the option to convert this
Security.




	 	 	 
	Dated:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Signature(s)
	 
	 	 
	 

	 	The signature(s) should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C.
Rule 17Ad-15.
	 
	 	 
	 
	 

	 	 
	 

	 	Signature Guarantee






	 	 	 	 	 
	Fill in for registration of shares if to be
delivered, and Securities if to be issued
other than to and in the name of registered
holder:
	 	 	 	 
	 
	 
	 	 	 	 
	 

(Name)

	 	 	 	 Principal
amount to be converted
	 

	 	 	 	(if less than all): $___,000
	 
	 	 	 	 
	 

(Street Address)

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	(City state and zip code)

	 	 	 	Social Security or Other Taxpayer Number
	Please print name and address
	 	 	 	 












 



A-16


FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE



To:     Manor Care, Inc.




          The undersigned registered holder of this Security hereby acknowledges receipt of a notice
from Manor Care, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to
the Company and requests and instructs the Company to repurchase this Security, or the portion
hereof (which is $1,000 principal amount or a integral multiple thereof) designated below, in
accordance with the terms of the Indenture referred to in this Security and this Security and
directs that the check or Common Stock of the Company, as applicable, in payment for this Security
or the portion thereof and any Securities representing any unrepurchased principal amount hereof,
be issued and delivered to the registered holder hereof unless a different name has been indicated
below. If any portion of this Security not repurchased is to be issued in the name of a Person
other than the undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto.




	 	 	 
	Dated:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Signature(s)
	 
	 	 
	 

	 	The signature(s) should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C.
Rule 17Ad-15.
	 
	 	 
	 

	 	 
	 

	 	Signature Guarantee





Fill in if a check is to be issued, or Securities are to be issued, other than to and in the name
of registered holder:




	 	 	 	 	 
	 
	 

(Name)

	 	 	 	 Principal
amount to be purchased
	 

	 	 	 	(if less than all): $___,000
	 
	 	 	 	 
	 

(Street Address)

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	(City state and zip code)

	 	 	 	Social Security or Other Taxpayer Number
	Please print name and address
	 	 	 	 












 



A-17


FORM OF PURCHASE NOTICE



To:     Manor Care, Inc.




          The undersigned registered holder of this Security hereby acknowledges receipt of a notice
from Manor Care, Inc. (the “Company”) as to the holder’s option to require the Company to
repurchase this Security and requests and instructs the Company to repurchase this Security, or the
portion hereof (which is $1,000 principal amount or a integral multiple thereof) designated below,
in accordance with the terms of the Indenture referred to in this Security and directs that the
check or Common Stock of the Company, as applicable, in payment for this Security or the portion
thereof and any Securities representing any unrepurchased principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been indicated below. If any
portion of this Security not repurchased is to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect thereto.




	 	 	 
	Dated:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Signature(s)
	 
	 	 
	 

	 	The signature(s) should be guaranteed by an eligible
guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C.
Rule 17Ad-15.
	 
	 
	 	 
	 

	 	 
	 

	 	Signature Guarantee





Fill in if a check is to be issued, or Securities are to be issued, other than to and in the name
of registered holder:




	 	 	 	 	 
	 
	 

(Name)

	 	 	 	 Principal
amount to be purchased
	 

	 	 	 	(if less than all): $___,000
	 
	 	 	 	 
	 

(Street Address)

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	(City state and zip code)

	 	 	 	Social Security or Other Taxpayer Number
	Please print name and address
	 	 	 	 












 



 


EXHIBIT B




FORM OF INDENTURE SUPPLEMENT TO ADD SUBSIDIARY GUARANTORS




           This Supplemental Indenture, dated as of [                    ] (this “Supplemental Indenture”
or “Guarantee”), among [name of future Subsidiary Guarantor] (the “Guarantor”),
Manor Care, Inc. (together with its successors and assigns, the “Company”), each other then
existing Subsidiary Guarantor under the Indenture referred to below, and U.S. Bank National
Association, as Trustee under the Indenture referred to below.




W I T N E S S E T H:




          WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have heretofore executed and
delivered an Indenture, dated as of May [17], 2006 (as amended, supplemented, waived or otherwise
modified, the “Indenture”), providing for the issuance of an aggregate principal amount of
$250.0 million of ___% Convertible Senior Notes due 2036 of the Company (the
“Securities”);




          WHEREAS, Section 3.3 of the Indenture provides that the Company is required to cause
each Subsidiary (other than a Subsidiary that does not Guarantee obligations under the Senior
Credit Obligations, the 2013 Notes, the 2023 Notes or the 2035 Notes) created or acquired by the
Company or one or more of its Subsidiaries or any Subsidiary that Guarantees the payment of Debt of
the Company to execute and deliver to the Trustee a supplemental indenture pursuant to which such
Subsidiary will unconditionally Guarantee, on a joint and several basis with the other Subsidiary
Guarantors, the full and prompt payment of the principal of and interest, Contingent Interest and
Additional Interest, if any, on the Securities on a senior basis; and




          WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the Company are
authorized to execute and deliver this Supplemental Indenture to amend the Indenture, without the
consent of any Securityholder;




          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guarantor, the Company, the other
Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit
of the Holders of the Securities as follows:




ARTICLE I




Definitions




          SECTION 1.1.   Defined Terms. As used in this Supplemental Indenture, terms defined
in the Indenture or in the preamble or recital hereto are used herein as therein defined, except
that the term “Holders” in this Guarantee shall refer to the term “Holders” as defined in the
Indenture and the Trustee acting on behalf or for the benefit of such Holders. The words “herein,” “hereof” and “hereby” and
other words of similar import used in this Supplemental













 



 




B-2



Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.




ARTICLE II




Agreement to be Bound; Guarantee




          SECTION 2.1.   Agreement to be Bound. The Guarantor hereby becomes a party to the
Indenture as a Subsidiary Guarantor and as such will have all of the rights and be subject to all
of the obligations and agreements of a Subsidiary Guarantor under the Indenture. The Guarantor
agrees to be bound by all of the provisions of the Indenture applicable to a Subsidiary Guarantor
and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.




          SECTION 2.2.   Guarantee. The Guarantor fully, unconditionally and irrevocably
Guarantees to each Holder of the Securities and the Trustee the Obligations pursuant to Article
X of the Indenture on a senior basis.




ARTICLE III




Miscellaneous




          SECTION 3.1.   Notices. All notices and other communications to the Guarantor shall
be given as provided in the Indenture to the Guarantor, at its address set forth below, with a copy
to the Company as provided in the Indenture for notices to the Company.




          SECTION 3.2.   Parties. Nothing expressed or mentioned herein is intended or shall be
construed to give any Person, firm or corporation, other than the Holders and the Trustee, any
legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the
Indenture or any provision herein or therein contained.




          SECTION 3.3.   Governing Law. This Supplemental Indenture shall be governed by, and
construed in accordance with, the laws of the State of New York.




          SECTION 3.4.   Severability Clause. In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.




          SECTION 3.5.   Ratification of Indenture; Supplemental Indentures Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of
Securities heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee
makes no representation or warranty as to the validity or sufficiency of this Supplemental
Indenture.













 



 




B-3




          SECTION 3.6.   Counterparts. The parties hereto may sign one or more copies of this
Supplemental Indenture in counterparts, all of which together shall constitute one and the same
agreement.




          SECTION 3.7.   Headings. The headings of the Articles and the sections in this
Guarantee are for convenience of reference only and shall not be deemed to alter or affect the
meaning or interpretation of any provisions hereof.




               IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.



	 	 	 	 	 	 	 
	 	 	[SUBSIDIARY GUARANTOR],
	 	 	as a Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MANOR CARE, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 












 



 


B-4




	 	 	 	 	 	 	 
	 	 	[INSERT OTHER SUBSIDIARY GUARANTORS]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title: