Document:

Exhibit 4.4

 

 

 

SYMBION, INC.

 

and each of the Guarantors party hereto

 

8.00% SENIOR PIK EXCHANGEABLE NOTES DUE 2017

 

INDENTURE

 

Dated as of June 14, 2011

 

U.S. Bank National Association

 

Trustee

 

 

 

i

 

TABLE OF CONTENTS

 

 

	
 
    	
PAGE
    
	
 
    	
 
    
	
ARTICLE 1
    	
 
    
	
DEFINITIONS AND INCORPORATION BY REFERENCE
    	
 
    
	
 
    	
 
    
	
Section 1.01.    Definitions
    	
1
    
	
Section 1.02.    Incorporation by   Reference of Trust Indenture Act
    	
43
    
	
Section 1.03.    Rules of   Construction and Calculation
    	
43
    
	
 
    	
 
    
	
ARTICLE 2
    	
 
    
	
THE NOTES
    	
 
    
	
 
    	
 
    
	
Section 2.01.    Form and Dating
    	
44
    
	
Section 2.02.    Execution and   Authentication
    	
46
    
	
Section 2.03.    Holder Lists
    	
46
    
	
Section 2.04.    Transfer and Exchange
    	
46
    
	
Section 2.05.    Replacement Notes
    	
60
    
	
Section 2.06.    Outstanding Notes
    	
61
    
	
Section 2.07.    Treasury Notes
    	
61
    
	
Section 2.08.    Temporary Notes
    	
61
    
	
Section 2.09.    Cancellation
    	
61
    
	
Section 2.10.    [Reserved]
    	
62
    
	
Section 2.11.    CUSIP Numbers
    	
62
    
	
Section 2.12.    Issuance of Additional   Notes
    	
62
    
	
 
    	
 
    
	
ARTICLE 3
    	
 
    
	
REDEMPTION
    	
 
    
	
 
    	
 
    
	
Section 3.01.    Notices to Trustee
    	
63
    
	
Section 3.02.    Selection of Notes to be   Redeemed
    	
63
    
	
Section 3.03.    Notice of Redemption
    	
64
    
	
Section 3.04.    Effect of Notice of   Redemption
    	
64
    
	
Section 3.05.    Deposit of Redemption   Price
    	
64
    
	
Section 3.06.    Notes Redeemed in Part
    	
65
    
	
Section 3.07.    Optional Redemption
    	
65
    
	
Section 3.08.    Mandatory Redemption
    	
66
    
	
 
    	
 
    
	
ARTICLE 4
    	
 
    
	
COVENANTS
    	
 
    
	
 
    	
 
    
	
Section 4.01.    Payment of Notes
    	
66
    
	
Section 4.02.    Maintenance of Office or   Agency
    	
66
    
	
Section 4.03.    Paying Agent to Hold   Money in Trust
    	
67
    
	
Section 4.04.    Reports
    	
67
    
	
Section 4.05.    Compliance Certificate
    	
69
    

 

ii

 

	
Section 4.06.    Stay, Extension and   Usury Laws
    	
69
    
	
Section 4.07.  Restricted Payments
    	
69
    
	
Section 4.08.    Dividend and Other   Payment Restrictions Affecting Restricted Subsidiaries
    	
76
    
	
Section 4.09.    Incurrence of   Indebtedness and Issuance of Disqualified Stock and Preferred Stock
    	
79
    
	
Section 4.10.    Asset Sales
    	
84
    
	
Section 4.11.  Transactions with Affiliates
    	
86
    
	
Section 4.12.  Liens
    	
89
    
	
Section 4.13.  Restriction on Optional   Repurchase of the Notes and the 2015 Notes
    	
89
    
	
Section 4.14.    Corporate Existence
    	
90
    
	
Section 4.15.  [Reserved]
    	
90
    
	
Section 4.16.  No Layering of Debt
    	
90
    
	
Section 4.17.  Designation of Restricted   and Unrestricted Subsidiaries
    	
90
    
	
Section 4.18.  Payments for Consent
    	
91
    
	
Section 4.19.  Additional Note Guarantees
    	
91
    
	
Section 4.20.  Distributions by Qualified   Restricted Subsidiaries
    	
91
    
	
 
    	
 
    
	
ARTICLE 5
    	
 
    
	
SUCCESSORS
    	
 
    
	
 
    	
 
    
	
Section 5.01.    Merger, Consolidation,   or Sale of Assets
    	
92
    
	
Section 5.02.    Successor Corporation   Substituted
    	
94
    
	
 
    	
 
    
	
ARTICLE 6
    	
 
    
	
DEFAULTS AND REMEDIES
    	
 
    
	
 
    	
 
    
	
Section 6.01.    Events of Default
    	
94
    
	
Section 6.02.    Acceleration
    	
96
    
	
Section 6.03.    Other Remedies
    	
97
    
	
Section 6.04.    Waiver of Past Defaults
    	
97
    
	
Section 6.05.    Control by Majority
    	
97
    
	
Section 6.06.    Limitation on Suits
    	
98
    
	
Section 6.07.    Rights of Holders to   Receive Payment
    	
98
    
	
Section 6.08.    Collection Suit by   Trustee
    	
98
    
	
Section 6.09.    Trustee May File   Proofs of Claim
    	
98
    
	
Section 6.10.    Priorities
    	
99
    
	
Section 6.11.    Undertaking for Costs
    	
99
    
	
 
    	
 
    
	
ARTICLE 7
    	
 
    
	
TRUSTEE
    	
 
    
	
 
    	
 
    
	
Section 7.01.    Duties of Trustee
    	
100
    
	
Section 7.02.    Rights of Trustee
    	
101
    
	
Section 7.03.    Individual Rights of   Trustee
    	
102
    
	
Section 7.04.    Trustee’s Disclaimer
    	
102
    

 

iii

 

	
Section 7.05.    Notice of Defaults
    	
103
    
	
Section 7.06.    Reports by Trustee to   Holders of the Notes
    	
103
    
	
Section 7.07.    Compensation and   Indemnity
    	
103
    
	
Section 7.08.    Replacement of Trustee
    	
104
    
	
Section 7.09.    Successor Trustee by   Merger, etc.
    	
105
    
	
Section 7.10.    Eligibility;   Disqualification
    	
105
    
	
Section 7.11.    Preferential Collection   of Claims Against Issuer
    	
106
    
	
 
    	
 
    
	
ARTICLE 8
    	
 
    
	
[RESERVED]
    	
 
    
	
 
    	
 
    
	
ARTICLE 9
    	
 
    
	
AMENDMENT, SUPPLEMENT AND WAIVER
    	
 
    
	
 
    	
 
    
	
Section 9.01.    Without Consent of   Holders
    	
106
    
	
Section 9.02.    With Consent of Holders
    	
107
    
	
Section 9.03.    [Reserved]
    	
109
    
	
Section 9.04.    Compliance with Trust   Indenture Act
    	
109
    
	
Section 9.05.    Revocation and Effect of   Consents
    	
109
    
	
Section 9.06.    Notation on or Exchange   of Notes
    	
109
    
	
Section 9.07.    Trustee to Sign   Amendments, etc.
    	
109
    
	
 
    	
 
    
	
ARTICLE 10
    	
 
    
	
EXCHANGE OF NOTES
    	
 
    
	
 
    	
 
    
	
Section 10.01.    Right To Exchange
    	
110
    
	
Section 10.02.    Exchange Procedures
    	
110
    
	
Section 10.03.  Cash Payments in Lieu of   Fractional Shares
    	
111
    
	
Section 10.04.  Withholding Tax
    	
111
    
	
Section 10.05.    Adjustment of Exchange   Price
    	
112
    
	
Section 10.06.    Effect of   Reclassification, Consolidation, Merger Or Sale
    	
122
    
	
Section 10.07.    Certain Covenants
    	
123
    
	
Section 10.08.    Notice To Holders Prior   To Certain Actions
    	
123
    
	
Section 10.09.    Stockholder Rights Plans
    	
124
    
	
Section 10.10.    Responsibility of   Trustee
    	
125
    
	
 
    	
 
    
	
ARTICLE 11
    	
 
    
	
GUARANTEES
    	
 
    
	
 
    	
 
    
	
Section 11.01.    Guarantee
    	
125
    
	
Section 11.02.  [Reserved]
    	
127
    
	
Section 11.03.    Limitation on Guarantor   Liability
    	
127
    
	
Section 11.04.    Execution and Delivery   of Note Guarantee
    	
127
    
	
Section 11.05.    Guarantors   May Consolidate, etc., on Certain Terms
    	
128
    
	
Section 11.06.    Releases
    	
128
    

 

iv

 

	
ARTICLE 12
    	
 
    
	
SATISFACTION AND DISCHARGE
    	
 
    
	
 
    	
 
    
	
Section 12.01.    Satisfaction and   Discharge
    	
129
    
	
Section 12.02.    Application of Trust   Money
    	
130
    
	
Section 12.03.  Repayment to Issuer
    	
131
    
	
 
    	
 
    
	
ARTICLE 13
    	
 
    
	
MISCELLANEOUS
    	
 
    
	
 
    	
 
    
	
Section 13.01.    Trust Indenture Act   Controls
    	
131
    
	
Section 13.02.    Notices
    	
131
    
	
Section 13.03.    Communication by Holders   with Other Holders
    	
132
    
	
Section 13.04.    Officer’s Certificate   and Opinion of Counsel as to Conditions Precedent
    	
132
    
	
Section 13.05.    Statements Required in   Officer’s Certificate or Opinion of Counsel
    	
133
    
	
Section 13.06.    Rules by Trustee   and Agents
    	
133
    
	
Section 13.07.    No Personal Liability of   Directors, Officers, Employees and Stockholders
    	
133
    
	
Section 13.08.    Governing Law
    	
133
    
	
Section 13.09.    No Adverse   Interpretation of Other Agreements
    	
134
    
	
Section 13.10.    Successors
    	
134
    
	
Section 13.11.    Severability
    	
134
    
	
Section 13.12.    Counterpart Originals
    	
134
    
	
Section 13.13.    Table of Contents,   Headings, etc.
    	
134
    

 

 

EXHIBITS

 

	
Exhibit A
    	
Form of Note
    
	
Exhibit B
    	
Form of Certificate   of Transfer
    
	
Exhibit C
    	
Form of Certificate   of Exchange
    
	
Exhibit D
    	
Form of Notation of   Note Guarantee
    
	
Exhibit E
    	
Form of Supplemental   Indenture to be Delivered by Subsequent Guarantors
    

 

v

 

INDENTURE dated as of June 14, 2011 by and among SYMBION, INC., a Delaware corporation (the “Issuer”), the Guarantors (as defined), and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”). The Issuer, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined) of the 8.00% Senior PIK Exchangeable Notes due 2017 (the “Notes”):

 

ARTICLE 1
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions.

 

“2015 Notes” means 11.00%/11.75% Senior PIK Toggle Notes due 2015 of the Issuer.

 

“Accreted Principal Amount” means, for any date, an amount per Note equal to the Initial Principal Amount of such Note, as increased by the sum of the Accretion Amounts for all Interest Accrual Dates occurring on or prior to such date.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1)           Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and

 

(2)           Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

 

“Accretion Amount” means, for any Interest Accrual Date, an amount per Note equal to the interest (including Additional Interest, if any) accrued on the Accreted Principal Amount as of the immediately preceding Interest Accrual Date (or, if there is no immediately preceding Interest Accrual Date, the interest on the Initial Principal Amount), calculated at the interest rate set forth in Section 2.01(c) and including Additional Interest, if any, for the period from, and including, such immediately preceding Interest Accrual Date (or, if there is no immediately preceding Interest Accrual Date, from, and including, the Issue Date) to, but excluding, such Interest Accrual Date.

 

“Additional Assets” means any property or assets (other than Indebtedness and Capital Stock) to be used by the Issuer or a Restricted Subsidiary in a Permitted Business.

 

1

 

“Additional Interest” has the meaning set forth in Registration Rights Agreement.

 

“Additional Notes” means any Notes (other than the Initial Notes), if any, issued under this Indenture in accordance with Sections 2.02, 2.12 and 4.09.

 

“Adjustment Event” has the meaning set forth in Section 10.05(j).

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings. No Person in whom a Receivables Subsidiary makes an Investment in connection with a Qualified Receivables Transaction will be deemed to be an Affiliate of the Issuer or any of its Subsidiaries solely by reason of such Investment.

 

“Affiliate Transaction” has the meaning set forth in Section 4.11(a).

 

“Agent” means any Registrar and co-registrar, any Paying Agent and additional paying agent, and any Exchange Agent.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, or any redemption or exchange of any Notes, the rules and procedures of the Depositary that apply to such transfer or exchange.

 

“Asset Sale” means:

 

(1)           the sale, lease (other than operating leases), conveyance or other disposition of any assets or rights outside of the ordinary course of business (including any Event of Loss); provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer and its Restricted Subsidiaries taken as a whole shall be governed by Section 5.01 of this Indenture and not by Section 4.10 of this Indenture; and

 

(2)           the issuance of Equity Interests in any of the Issuer’s Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries (other than directors’ qualifying Equity Interests or Equity Interests required by applicable law to be held by a Person other than the Issuer or a Restricted Subsidiary).

 

2

 

Notwithstanding the preceding, none of the following items shall be deemed to be an Asset Sale:

 

(1)           any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $5.0 million;

 

(2)           a transfer of assets between or among the Issuer and its Restricted Subsidiaries;

 

(3)           an issuance of Equity Interests by a Restricted Subsidiary of the Issuer to the Issuer or to a Restricted Subsidiary of the Issuer;

 

(4)           the sale or lease of products, services or accounts receivable (including at a discount) in the ordinary course of business and any sale or other disposition of damaged, worn-out, negligible, surplus or obsolete assets in the ordinary course of business;

 

(5)           the sale or other disposition of Cash Equivalents;

 

(6)           a Restricted Payment that does not violate Section 4.07 of this Indenture or a Permitted Investment;

 

(7)           any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date, including sale and lease back transactions and asset securitizations not prohibited by this Indenture;

 

(8)           any exchange of like-kind property of the type described in Section 1031 of the Code for use in a Permitted Business;

 

(9)           the sale or disposition of any assets or property received as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries on any secured Investment or any other transfer of title with respect to any secured Investment in default;

 

(10)         the licensing of intellectual property in the ordinary course of business or in accordance with industry practice;

 

(11)         surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind;

 

(12)         leases or subleases to third persons in the ordinary course of business that do not interfere in any material respect with the business of the Issuer or any of its Restricted Subsidiaries;

 

(13)         sales of accounts receivable and related assets of the type specified in the definition of Qualified Receivables Transaction to a Receivables Subsidiary for the Fair Market Value thereof, less amounts

 

3

 

required to be established as reserves and customary discounts pursuant to contractual agreements with entities that are not Affiliates of the Issuer entered into as part of a Qualified Receivables Transaction;

 

(14)         transfers of accounts receivable and related assets of the type specified in the definition of Qualified Receivables Transaction (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Transaction;

 

(15)         any issuance or sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary or Equity Interest, Indebtedness or other securities that were acquired as a Restricted Investment not in violation of Section 4.07; and

 

(16)         foreclosures on assets.

 

“Asset Sale Offer” has the meaning set forth in the Senior Secured Indenture.

 

“Authentication Order” has the meaning set forth in Section 2.02.

 

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

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act.

 

“Board of Directors” means:

 

(1)           with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

 

(2)           with respect to a partnership, the board of directors or board of managers of the general partner of the partnership;

 

(3)           with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and

 

(4)           with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Business Day” means any day other than a Legal Holiday.

 

“Calculation Date” has the meaning set forth in the definition of “Fixed Charge Coverage Ratio” below.

 

4

 

“Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of  rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

 

“Capital Stock” means:

 

(1)           in the case of a corporation, corporate stock;

 

(2)           in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3)           in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

 

(4)           any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing the Notes and any other debt securities convertible into, or exchangeable for, Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

 

“Cash Equivalents” means:

 

(1)           United States dollars or, in the case of any Restricted Subsidiary which is not a Domestic Subsidiary, any other currencies held from time to time in the ordinary course of business;

 

(2)           securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than 12 months from the date of acquisition;

 

(3)           direct obligations issued by any state of the United States of America or any political subdivision of any such state, or any public instrumentality thereof, in each case having maturities of not more than 12 months from the date of acquisition;

 

(4)           certificates of deposit and eurodollar time deposits with maturities of 12 months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding 12 months and overnight bank deposits, in each case, with any lender party to the Credit Agreement or

 

5

 

with any domestic commercial bank that has capital and surplus of not less than $500.0 million;

 

(5)           repurchase obligations with a term of not more than one year for underlying securities of the types described in clauses (2) and (4) above entered into with any financial institution meeting the qualifications specified in clause (4) above;

 

(6)           commercial paper having one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services and, in each case, maturing within 12 months after the date of acquisition;

 

(7)           Indebtedness or preferred stock issued by Persons with a rating of “A” or higher from Standard & Poor’s Rating Services or “A2” or higher from Moody’s Investors Service, Inc. with maturities of 12 months or less from the date of acquisition; and

 

(8)           money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (6) of this definition or money market funds that comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended.

 

“Cash Management Obligations” means, with respect to any Person, the obligations of such Person in connection with (a) credit cards or stored value cards or (b) treasury, depository or cash management or related services, including (i) the automated clearinghouse transfer of funds or overdrafts or (ii) controlled disbursement services.

 

“Change of Control” means the occurrence of any of the following:

 

(1)           the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Issuer and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the Exchange Act) other than Permitted Holders;

 

(2)           the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” (as defined above), other than Permitted Holders, becomes the Beneficial Owner, directly or indirectly, of 50% or more of the Voting Stock of the Issuer, measured by voting power rather than number of shares; provided, however, for purposes of this clause (2), each Person will be deemed to beneficially own any Voting Stock of another Person held by one or more of its Subsidiaries; or

 

6

 

(3)           the first day on which a majority of the members of the Board of Directors of the Issuer are not Continuing Directors.

 

“Clause A Distribution” has the meaning set forth in Section 10.05(c).

 

“Clause B Distribution” has the meaning set forth in Section 10.05(c).

 

“Clause C Distribution” has the meaning set forth in Section 10.05(c).

 

“close of business” means 5:00 p.m. (New York City time).

 

“Closing Sale Price” of the Common Stock on any date after the closing date of the IPO 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 the average ask prices) on that date as reported in composite transactions for the principal United States national or regional securities exchange on which Common Stock is traded.  If the Common Stock is not listed for trading on a United States national or regional securities exchange on the relevant date, the “Closing Sale Price” will be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or similar organization.  If the Common Stock is not so quoted, the “Closing Sale Price” will 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 Issuer for this purpose.

 

“Co-Investors” means institutional investors, other than Crestview Partners, L.P. and its Affiliates, who become holders of Equity Interests of the Issuer (or any direct or indirect parent) on or prior to the Issue Date.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time and the rules and regulations promulgated thereunder from time to time.

 

“Collateral” has the meaning set forth in the Senior Secured Indenture.

 

“Common Stock” means the shares of common stock, par value $0.01 per share, of Holdings at the date of this Indenture, subject to Section 10.06.

 

“Common Stock Price” means:

 

(1)           for any Trading Day before the closing date of the IPO, the Exchange Price as in effect on such Trading Day; and

 

(2)           for any Trading Day on or after the closing date of the IPO, the Closing Sale Price for such Trading Day.

 

“Consolidated Adjusted EBITDA” means, with respect to any specified Person for any period (the “Measurement Period”), the Consolidated Net

 

7

 

Income of such Person for such period plus, without duplication and to the extent deducted in determining such Consolidated Net Income, the amounts for such period of:

 

(1)           the Fixed Charges of such Person and its Restricted Subsidiaries for the Measurement Period and any amount excluded from the definition thereof pursuant to clause (u), (v), (w), (x), (y) or (z) therein; plus

 

(2)           the provision for federal, state and foreign income taxes based on income or profits or capital, including state, franchise, capital and similar taxes and withholding taxes paid or accrued of such Person and its Restricted Subsidiaries for the Measurement Period; plus

 

(3)           the consolidated depreciation expense of such Person and its Restricted Subsidiaries for the Measurement Period; plus

 

(4)           the consolidated amortization expense of such Person and its Restricted Subsidiaries for the Measurement Period; plus

 

(5)           fees, costs and expenses paid or payable in cash by the Issuer or any of its Restricted Subsidiaries during the Measurement Period in connection with the Transactions (including, without limitation, retention payments paid as an incentive to retained employees in connection with the Transactions); plus

 

(6)           other non-cash expenses and charges for the Measurement Period reducing Consolidated Net Income (provided that if any non-cash expenses or charges referred to in this clause (6) represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated Adjusted EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period); plus

 

(7)           any non-capitalized expenses or charges for the Measurement Period relating to (i) any offering of Equity Interests by the Issuer, Holdings or any other direct or indirect parent of the Issuer, (ii) merger, recapitalization or acquisition transactions made by the Issuer or any of its Restricted Subsidiaries, including any earnout payments, whether or not accounted for as such that are paid, accrued or reserved for within 365 days of such transaction, or (iii) any Indebtedness incurred by the Issuer or any of its Restricted Subsidiaries (in each case, whether or not successful); plus

 

(8)           all fees paid by the Issuer pursuant to clauses (vii), (viii) and (xv) of Section 4.11(b); plus

 

8

 

(9)           the amount of extraordinary, unusual or non-recurring charges or any restructuring charges or reserves (which, for the avoidance of doubt, shall include retention, severance, systems establishment cost,  contract termination costs, including future lease commitments, and costs to consolidate facilities and relocate employees); plus

 

(10)         income attributable to discontinued operations (excluding income attributable to assets or operations that have been disposed of during such period); plus

 

(11)         the Net Income of any Person to the extent excluded from the calculation of Consolidated Net Income pursuant to clause (1) of the definition thereof (i.e., the minority interest of the Issuer or any Guarantor in the entities generating such Net Income); plus

 

(12)         with respect to any Restricted Subsidiary that is not wholly owned by the Issuer or any Subsidiary Guarantor that has any outstanding Pledged Notes(s) issued to the Issuer or any Subsidiary Guarantor, the least of (i) the minority interest of such Restricted Subsidiary as of the last day of the Measurement Period, (ii) the outstanding amount of all Pledged Notes issued by such Restricted Subsidiary to the Issuer or any Subsidiary Guarantor as of the last day of the Measurement Period and (iii) the amount of the Consolidated Adjusted EBITDA of such Restricted Subsidiary for the Measurement Period that is not otherwise included in the calculation of Consolidated Adjusted EBITDA for such period; plus

 

(13)         with respect to any Non-Consolidated Entity that has any outstanding Pledged Note(s) issued to the Issuer or any Guarantor, the lesser of (i) the outstanding amount of all Pledged Notes issued by such Non-Consolidated Entity to the Issuer or a Guarantor as of the last day of the Measurement Period and (ii) the amount of the Consolidated Adjusted EBITDA of such Non-Consolidated Entity for the Measurement Period that is not otherwise included in the calculation of Consolidated Adjusted EBITDA for such period, all as determined in accordance with GAAP; plus

 

(14)         any unrealized net loss (or minus any net gain) resulting in such Measurement Period from hedging transactions; minus

 

(15)         without duplication, other non-cash items (other than the accrual of revenue in accordance with GAAP consistently applied in the ordinary course of business) increasing Consolidated Net Income for the Measurement Period (excluding any such non-cash item to the extent it represents the reversal of an accrual or reserve for potential cash item in any prior period); minus

 

9

 

(16)         cash lease payments made in connection with the Issuer’s or its Subsidiary’s financing obligation payable pursuant to the Idaho Falls Facility; minus

 

(17)         losses attributable to discontinued operations (excluding losses attributable to assets or operations that have been disposed of during such period).

 

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such specified Person and its Subsidiaries (or in the case of the Issuer, its Restricted Subsidiaries) for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

 

(1)           the Net Income (and net loss) of any other Person that is not a Restricted Subsidiary of such specified Person or that is accounted for by the equity method of accounting will be excluded; provided that Consolidated Net Income of the Issuer will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the Issuer or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

 

(2)           solely for the purpose of determining the amount available for Restricted Payments under clause (iii)(A) of Section 4.07(a), the Net Income for such period of any Restricted Subsidiary (other than any Subsidiary Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination wholly permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided that Consolidated Net Income of the Issuer will be increased by the amount of dividends or other distributions or other payments actually paid in cash (or to the extent converted into cash) or Cash Equivalents to the Issuer or a Restricted Subsidiary thereof in respect of such period, to the extent not already included therein;

 

(3)           the cumulative effect of a change in accounting principles will be excluded;

 

(4)           the amortization of any premiums, fees or expenses incurred in connection with the Transactions or any amounts required or permitted by Accounting Principles Board Opinions Nos. 16 (including

 

10

 

non-cash write-ups and non-cash charges relating to inventory and fixed assets, in each case arising in connection with the Transactions or any acquisition) and 17 (including non-cash charges relating to intangibles and goodwill), in each case in connection with the Transactions or any acquisition, will be excluded;

 

(5)           any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with: (a) any sale of assets outside the ordinary course of business (it being understood that a sale of assets comprising discontinued operations shall be deemed a sale of assets outside the ordinary course of business); or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries will be excluded;

 

(6)           any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss will be excluded;

 

(7)           income or losses attributable to discontinued operations (including, without limitation, operations disposed during such period whether or not such operations were classified as discontinued) will be excluded;

 

(8)           any non-cash charges (i) attributable to applying the purchase method of accounting in accordance with GAAP, (ii) resulting from the application of ASC 350 or ASC 360, and (iii) relating to the amortization of intangibles resulting from the application of ASC 805, will be excluded;

 

(9)           all non-cash charges relating to employee benefit or other management or stock compensation plans of the Issuer or a Restricted Subsidiary (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense incurred in a prior period) will be excluded to the extent that such non-cash charges are deducted in computing such Consolidated Net Income; provided, further, that if the Issuer or any Restricted Subsidiary of the Issuer makes a cash payment in respect of such non-cash charge in any period, such cash payment will (without duplication) be deducted from the Consolidated Net Income of the Issuer for such period; and

 

(10)         all unrealized gains and losses relating to hedging transactions and mark-to-market of Indebtedness denominated in foreign currencies resulting from the application of ASC 830 shall be excluded.

 

For the avoidance of doubt, to the extent not already reducing Consolidated Net Income, Net Income of such specified Person and its

 

11

 

Subsidiaries (or in the case of the Issuer, its Restricted Subsidiaries) attributable to noncontrolling interests shall reduce Consolidated Net Income of such specified Person.

 

“Consolidated Secured Debt Ratio” as of any date of determination means, the ratio of (1) Consolidated Total Indebtedness of the Issuer and its Restricted Subsidiaries that is secured by Liens as of such date to (2) the Issuer’s Consolidated Adjusted EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such event for which such calculation is being made shall occur, in each case with such pro forma adjustments to Consolidated Total Indebtedness and Consolidated Adjusted EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio; provided, however, that solely for purposes of the calculation of the Consolidated Secured Debt Ratio, in connection with the incurrence of any Lien pursuant to clause (28) of the definition of “Permitted Liens,” the Issuer or its Restricted Subsidiaries may elect, pursuant to an Officer’s Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness which is to be secured by such Lien as being incurred at such time and any subsequent incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation to be an incurrence at such subsequent time.

 

“Consolidated Total Indebtedness” means, as at any date of determination, an amount equal to the aggregate amount of all outstanding Indebtedness of the Issuer and its Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, Obligations in respect of Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments, less the aggregate amount of cash and Cash Equivalents of the Issuer and its Restricted Subsidiaries on a consolidated basis.

 

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Issuer who:

 

(1)           was a member of such Board of Directors on the Issue Date; or

 

(2)           was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election; or

 

(3)           was designated or appointed with the approval of Permitted Holders holding a majority of the Voting Stock of all of the Permitted Holders.

 

12

 

“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 13.02 or such other address as to which the Trustee may give notice to the Issuer.

 

“Credit Agreement” means the Credit Agreement, dated as of June 14, 2011, by and among the Issuer, as borrower, Holdings, certain subsidiaries of the Issuer, Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, Barclays Capital and Jefferies Finance LLC, as co-syndication agents, Morgan Stanley Senior Funding, Inc., Barclays Capital and Jefferies Finance LLC, as joint lead arrangers and joint bookrunners, and various lenders from time to time party thereto providing for up to $50.0 million of revolving credit borrowings and $25.0 million of uncommitted incremental loan facilities, including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced by any other Indebtedness (including by means of sales of debt securities and including any amendment, restatement, modification, renewal, refunding, replacement or refinancing that increases the amount borrowed thereunder or extends the maturity thereof) in whole or in part from time to time.

 

“Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities or indentures, in each case, with banks or other institutional lenders providing for revolving credit loans, notes, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit or any other Indebtedness, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities and including any amendment, restatement, modification, renewal, refunding, replacement or refinancing that increases the amount borrowed thereunder or extends the maturity thereof) in whole or in part from time to time.

 

“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

 

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.04, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Global Note” attached thereto.

 

13

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 4.02 as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

 

“Designated Noncash Consideration” means any non-cash consideration received by the Issuer or a Restricted Subsidiary in connection with an Asset Sale that is designated as Designated Noncash Consideration pursuant to an Officer’s Certificate.

 

“Determination Date” has the meaning set forth in Section 10.05(j).

 

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 90 days after the date on which the Notes mature. Notwithstanding the preceding sentence, (x) any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Issuer or the Subsidiary that issued such Capital Stock to repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Issuer may not repurchase such Capital Stock unless the Issuer would be permitted to do so in compliance with Section 4.07, (y) any Capital Stock that would constitute Disqualified Stock solely as a result of any redemption feature that is conditioned upon, and subject to, compliance with Section 4.07 shall not constitute Disqualified Stock and (z) any Capital Stock issued to any plan for the benefit of employees will not constitute Disqualified Stock solely because it may be required to be repurchased by the Issuer or the Subsidiary that issued such Capital Stock in order to satisfy applicable statutory or regulatory obligations. The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that the Issuer and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

 

“Distributed Property” shall have the meaning set forth in Section 10.05(c).

 

“Domestic Subsidiary” means any Restricted Subsidiary of the Issuer that was formed under the laws of the United States or any state of the United States.

 

“DTC” has the meaning set forth in Section 4.02.

 

14

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding the Notes and any other debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Event of Default” has the meaning set forth in Section 6.01.

 

“Event of Loss” has the meaning set forth in the Senior Secured Indenture.

 

“Excess Proceeds” has the meaning set forth in the Senior Secured Indenture.

 

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

 

“Exchange Agent” shall have the meaning set forth in Section 4.02.

 

“Exchange Amount” means, for any date, (i)(A) the Accreted Principal Amount as of such date, plus (B) accrued and non-capitalized interest, including Additional Interest, if any, to, but excluding, such date, divided by (ii) the Exchange Price as of such date.

 

“Exchange Date” has the meaning set forth in Section 10.02(c).

 

“Exchange Notice” has the meaning set forth in Section 10.02(a).

 

“Exchange Obligation” has the meaning set forth in Section 10.01.

 

“Exchange Price” has the meaning set forth in Section 10.01.

 

“Excluded Contributions” means net cash proceeds, marketable securities or Qualified Proceeds received by the Issuer from (i) contributions to its equity capital (other than Disqualified Stock) or (ii) the sale (other than to a Subsidiary of the Issuer or to any management equity plan or stock option plan or any other management or employee benefit plan or agreement of the Issuer) of Equity Interests (other than Disqualified Stock) of the Issuer, in each case designated as Excluded Contributions pursuant to an Officer’s Certificate on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be, that are excluded from the calculation set forth in clause (iii) of Section 4.07(a) hereof.

 

“Ex-Dividend Date” means, for any issuance or distribution on the Common Stock:

 

(1)           at any time before the closing date of the IPO, the Record Date for such issuance or distribution; and

 

(2)           at any time on or after the closing date of the IPO, the first date on which shares of the Common Stock trade on the applicable

 

15

 

exchange or in the applicable market, regular way, without the right to receive such issuance or distribution in question, from Holdings or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

 

“Existing Indebtedness” means Indebtedness (other than the Indebtedness under the Credit Agreement) existing on the Issue Date.

 

“Expiration Date” has the meaning set forth in Section 10.05(e).

 

“Expiration Time” has the meaning set forth in Section 10.05(e).

 

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors, chief executive officer or chief financial officer of the Issuer (unless otherwise provided in this Indenture).

 

“First Lien Obligations” has the meaning set forth in the Senior Secured Indenture.

 

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated Adjusted EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock or Disqualified Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock or Disqualified Stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period.

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

 

(1)           Investments, acquisitions, mergers, consolidations and dispositions that have been made by the specified Person or any of its Restricted Subsidiaries, or any Person or any of its Restricted Subsidiaries acquired by, merged or consolidated with the specified Person or any of its Restricted Subsidiaries, and including any related financing transactions and including increases in ownership of Restricted Subsidiaries, during the

 

16

 

four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect, including giving effect to Pro Forma Cost Savings, as if they had occurred on the first day of the four-quarter reference period;

 

(2)           the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;

 

(3)           any Person that is a Restricted Subsidiary on the Calculation Date will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;

 

(4)           any Person that is not a Restricted Subsidiary on the Calculation Date will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and

 

(5)           if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness).

 

For purposes of this definition, whenever pro forma effect is given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

 

“Fixed Charges” means, with respect to any specified Person for any period, the sum, without duplication, of:

 

(1)           the consolidated interest expense of such Person and its Subsidiaries (or, in the case of the Issuer, its Restricted Subsidiaries) for such period, net of interest income, whether paid or accrued, including,

 

17

 

without limitation, original issue discount, non-cash interest payments, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all cash payments made or received pursuant to Hedging Obligations in respect of interest rates, and excluding (u) payment-in-kind interest and any implied interest in respect of the Issuer’s or its Subsidiary’s financing obligation pursuant to the Idaho Falls Facility, (v) amortization of deferred financing costs, (w) accretion or accrual of discounted liabilities not constituting Indebtedness, (x) any expense resulting from the discounting of any Indebtedness in connection with the application of purchase accounting in connection with any acquisition, (y) any expensing of bridge, commitment and other financing fees and (z) to the extent included in Fixed Charges, the portion of consolidated interest expense of such Person and its Restricted Subsidiaries attributable to Indebtedness incurred in connection with the acquisition of discontinued operations; plus

 

(2)           any interest on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, but only to the extent that such Guarantee or Lien is called upon; plus

 

(3)           all cash dividends paid on any series of preferred stock of such Person or any of its Restricted Subsidiaries (other than to the Issuer or a Restricted Subsidiary of the Issuer), in each case, determined on a consolidated basis in accordance with GAAP.

 

“Foreign Subsidiary” means any Subsidiary of the Issuer that is not organized under the laws of the United States of America, any State thereof or the District of Columbia.

 

“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 have been approved by a significant segment of the accounting profession, which are in effect on August 23, 2007. For the purposes of this Indenture, the term “consolidated” with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

 

“Global Note Legend” means the legend set forth in Section 2.04(f)(ii), which is required to be placed on all Global Notes issued under this Indenture.

 

18

 

“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Global Note” attached thereto, issued in accordance with Section 2.01 or 2.06 hereof.

 

“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America (including any agency or instrumentality thereof) and the payment for which the United States pledges its full faith and credit.

 

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

 

“Guarantors” means Holdings and each Subsidiary Guarantor, and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

 

(1)           interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;

 

(2)           other agreements or arrangements designed to manage interest rates or interest rate risk; and

 

(3)           other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

 

“Holder” means a Person in whose name a Note is registered.

 

“Holdings” means Symbion Holdings Corporation, a Delaware corporation.

 

“Idaho Falls Facility” means the financing obligation of the Issuer and certain Subsidiaries payable to the hospital facility lessor with respect to the Issuer’s Idaho Falls, Idaho hospital facility, on the Issue Date, as amended from

 

19

 

time to time; provided that no amendment may materially adversely affect the legal rights of any Holder of Notes under this Indenture.

 

“incur” has the meaning set forth in Section 4.09(a).

 

“Indebtedness” means, with respect to any specified Person, the principal and premium (if any) of any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

 

(1)           in respect of borrowed money;

 

(2)           evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) (other than letters of credit issued in respect of trade payables);

 

(3)           in respect of bankers’ acceptances;

 

(4)           representing Capital Lease Obligations;

 

(5)           representing the balance deferred and unpaid of the purchase price of any property or services due more than twelve months after such property is acquired or such services are completed (except any such balance that constitutes a trade payable or similar obligation to a trade creditor); or

 

(6)           representing the net obligations under any Hedging Obligations,

 

if and to the extent any of the preceding items (other than letters of credit, and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

 

Notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) contingent obligations, including Guarantees, incurred in the ordinary course of business or in respect of operating leases, and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) Obligations under or in respect of a Qualified Receivables Transaction; or (5) payment obligations in connection with the Issuer’s or its Subsidiary’s financing obligation payable pursuant to the Idaho Falls Facility.

 

The amount of any Indebtedness outstanding as of any date shall be:

 

20

 

(1)           the accreted value thereof (together with any interest thereon that is more than 30 days past due), in the case of any Indebtedness that does not require current payments of interest; and

 

(2)           the principal amount thereof, in the case of any other Indebtedness.

 

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

 

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

 

“Initial Holders” means Crestview Credit Holdings I, LLC, Crestview Credit Holdings TE/ERISA I, LLC, Crestview Credit Holdings PF/Cayman I, LLC, ETON PARK FUND, L.P., ETON PARK MASTER FUND, LTD., THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY (for its Group Annuity Separate Account) and THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY.

 

“Initial Notes” means the Notes issued under this Indenture on the date hereof.

 

“Initial Principal Amount” of any Note means the principal amount of such Note on the Issue Date (whether such Note is issued on or at any time after the Issue Date).

 

“Interest Accrual Date” has the meaning specified in Section 2.01(c).

 

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding accounts receivable, trade credit, advances to customers and commission, travel, relocation and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet (excluding the footnotes) prepared in accordance with GAAP. If the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Issuer such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Issuer, the Issuer will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Issuer’s Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in Section 4.07(c).  The acquisition by the Issuer or any Restricted Subsidiary of the Issuer of a Person that holds an Investment in a third Person will not be deemed to be an Investment by the Issuer or such

 

21

 

Restricted Subsidiary in such third Person, unless such third Person’s Investment was made in contemplation of the acquisition by the Issuer or a Restricted Subsidiary, in which case it shall be an Investment in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in Section 4.07(c).  The outstanding amount of any Investment shall be the original cost thereof, reduced by all returns on such Investment (including dividends, interest, distributions, returns of principal and profits on sale).

 

“IPO” means the first underwritten public offering after the Issue Date of the Common Stock pursuant to an effective registration statement under the Securities Act (other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form) that results in gross proceeds to Holdings of not less than $100 million in the aggregate.

 

“Issue Date” means June 14, 2011.

 

“Issuer” means the party named as the “Issuer” in the first paragraph of this Indenture and any successor obligor.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a date on which any payment or delivery is due is a Legal Holiday at a place of payment, such payment or delivery, as the case may be, may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease be deemed a Lien.

 

“Management Agreements” means the management, service or similar agreements pursuant to which the Issuer or any of its Qualified Restricted Subsidiaries manages the assets and businesses of any of its Restricted Subsidiaries.

 

“Maturity Date” means June 15, 2017.

 

“Measurement Period” has the meaning set forth in the definition of “Consolidated Adjusted EBITDA” above.

 

22

 

“Minority Interests” means the interests in income of the Issuer’s Restricted Subsidiaries held by Persons other than the Issuer or a Restricted Subsidiary, as reflected on the Issuer’s consolidated financial statements.

 

“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends.

 

“Net Proceeds” means the aggregate cash proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, payments made in order to obtain a necessary consent or required by applicable law, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, including taxes resulting from the transfer of the proceeds of such Asset Sale to the Issuer, in each case, after taking into account:

 

(1)           any available tax credits or deductions and any tax sharing arrangements;

 

(2)           amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale;

 

(3)           any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP;

 

(4)           any reserve for adjustment in respect of any liabilities associated with the asset disposed of in such transaction and retained by the Issuer or any Restricted Subsidiary after such sale or other disposition thereof;

 

(5)           any distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale; and

 

(6)           in the event that a Restricted Subsidiary consummates an Asset Sale and makes a pro rata payment of dividends to all of its stockholders from any cash proceeds of such Asset Sale, the amount of dividends paid to any stockholder other than the Issuer or any other Restricted Subsidiary; provided that any net proceeds of an Asset Sale by a Non-Guarantor Subsidiary that are subject to legal or contractual restrictions on repatriation to the Issuer will not be considered Net Proceeds for so long as such proceeds are subject to such restrictions;

 

23

 

provided, however, that any such contractual restrictions on repatriation were not entered into in contemplation of such Asset Sale.

 

“Non-Consolidated Entity” means each of the operating partnerships, limited liability companies, limited liability partnerships, joint ventures or similar entities in which the Issuer or its Restricted Subsidiaries, directly or indirectly, own Equity Interests, other than Subsidiaries.

 

“Non-Guarantor Subsidiaries” means (v) any Unrestricted Subsidiary, (w) any Receivables Subsidiary, (x) any Foreign Subsidiary and (y) any other Subsidiary of the Issuer that does not guarantee the Issuer’s Obligations under the Credit Agreement.

 

“Non-Recourse Debt” means Indebtedness:

 

(1)           as to which neither the Issuer nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or (c) otherwise constitutes the lender;

 

(2)           no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of the Issuer or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of such other Indebtedness to be accelerated or payable prior to its Stated Maturity;

 

(3)           as to which the lenders have been notified in writing or have agreed in writing (in the agreement relating thereto or otherwise) that they will not have any recourse to the stock or assets of the Issuer or any of its Restricted Subsidiaries; and

 

(4)           except to the extent of any Guarantee thereof as permitted by the definition of “Unrestricted Subsidiary.”

 

“Note Guarantee” means the Guarantee by each Guarantor of the Issuer’s Obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture.

 

“Note  Register” shall have the meaning set forth in Section 4.02.

 

“Notes” has the meaning assigned to it in the first paragraph of this Indenture, and “Note” means each $1,000 Initial Principal Amount of Notes.

 

“Notes Obligations” means Obligations in respect of the Notes, the Guarantees and this Indenture.

 

24

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness, and any obligation to deliver shares of Common Stock or any other security pursuant to the documentation governing any Indebtedness.

 

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice President of such Person.

 

“Officer’s Certificate” means a certificate signed on behalf of the Issuer by one Officer of the Issuer, who must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Issuer, that meets the requirements of Section 13.05 hereof.

 

“Opinion of Counsel” means an opinion from legal counsel that meets the requirements of Section 13.05 hereof. The counsel may be an employee of or counsel to the Issuer or any Subsidiary of the Issuer.

 

“Optional Repurchase” has the meaning set forth in Section 4.13.

 

“Pari Passu Lien Indebtedness” has the meaning set forth in the Senior Secured Indenture.

 

“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.

 

“Paying Agent” has the meaning set forth in Section 4.02.

 

“Payment Default” has the meaning set forth in Section 6.01(e)(i).

 

“Permitted Business” means (i) any business engaged in by the Issuer or any of its Restricted Subsidiaries on the Issue Date and (ii) any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Issuer and its Restricted Subsidiaries are engaged on the Issue Date.

 

“Permitted Collateral Liens” has the meaning set forth in the Senior Secured Indenture.

 

“Permitted Debt” has the meaning given to such term in Section 4.09(b).

 

“Permitted Holder” means Crestview Partners GP, L.P., the Co-Investors and members of management of the Issuer who are holders of Equity Interests on the Issue Date, and their respective Affiliates.

 

“Permitted Investments” means:

 

25

 

(1)           any Investment in the Issuer, in a Subsidiary Guarantor or in a Qualified Restricted Subsidiary of the Issuer;

 

(2)           any Investment in Cash Equivalents;

 

(3)           any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person (other than the Issuer, a Subsidiary Guarantor or a Qualified Restricted Subsidiary of the Issuer) that is engaged as its primary business in a Permitted Business, if as a result of such Investment:

 

(a)           such Person becomes a Qualified Restricted Subsidiary of the Issuer; or

 

(b)           such Person, in one transaction or a series of transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Issuer, or a Qualified Restricted Subsidiary of the Issuer;

 

(4)           any Investment received in connection with an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof or in connection with the disposition of assets not constituting an Asset Sale;

 

(5)           any Investment solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Issuer or any parent of the Issuer;

 

(6)           any Investments received in compromise, settlement or resolution (A) of obligations of trade debtors or customers that were incurred in the ordinary course of business of the Issuer or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade debtor or customer, (B) of litigation, arbitration or other disputes with Persons who are not Affiliates or (C) as a result of a foreclosure by the Issuer or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

(7)           Investments represented by Hedging Obligations entered into to protect against fluctuations in interest rates, exchange rates and commodity prices;

 

(8)           any Investment in payroll, travel and similar advances to cover business-related travel expenses, moving expenses or other similar expenses, in each case incurred in the ordinary course of business;

 

(9)           Investments in receivables owing to the Issuer or any Restricted Subsidiary if created or acquired in the ordinary course of

 

26

 

business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Issuer or any such Restricted Subsidiary deems reasonable under the circumstances;

 

(10)         Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business;

 

(11)         obligations of one or more officers or other employees of the Issuer or any of its Restricted Subsidiaries in connection with such officer’s or employee’s acquisition of shares of Capital Stock of the Issuer or Capital Stock of Holdings (or any other direct or indirect parent company of the Issuer) so long as no cash or other assets are paid by the Issuer or any of its Restricted Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;

 

(12)         loans or advances to and guarantees provided for the benefit of employees made in the ordinary course of business of the Issuer or the Restricted Subsidiary of the Issuer in an aggregate principal amount not to exceed $2.5 million at any one time outstanding;

 

(13)         Investments existing as of the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment existing as of the Issue Date (excluding any such extension, modification or renewal involving additional advances, contributions or other investments of cash or property or other increases thereof unless it is a result of the accrual or accretion of interest or original issue discount or payment-in-kind pursuant to the terms, as of the Issue Date, of the original Investment so extended, modified or renewed) and pursuant to any binding commitment outstanding as of the Issue Date;

 

(14)         repurchases of (x) the Senior Secured Notes, (y) the 2015 Notes and (z) the Notes (in the case of (y) and (z), to the extent permitted by restrictions set forth in Section 4.13);

 

(15)         Investments in Non-Consolidated Entities having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (15) that are at the time outstanding not to exceed the greater of $150.0 million and 15.0% of Total Assets at the time made; provided, however, that if any Investment pursuant to this clause (15) is made in any Non-Consolidated Entity and such Person becomes a Qualified Restricted Subsidiary of the Issuer after the date such Investment is made, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and

 

27

 

shall cease to have been made pursuant to this clause (15) for so long as such Person continues to be a Qualified Restricted Subsidiary (it being understood that if such Person thereafter ceases to be a Qualified Restricted Subsidiary of the Issuer, such Investment will again be deemed to have been made pursuant to this clause (15)); provided, further, that substantially all of the business activities of any such Non-Consolidated Entity consist of a Permitted Business;

 

(16)         the acquisition by a Receivables Subsidiary in connection with a Qualified Receivables Transaction of Equity Interests of a trust or other Person established by such Receivables Subsidiary to effect such Qualified Receivables Transaction; and any other Investment by the Issuer or a Subsidiary of the Issuer in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Transaction customary for such transactions;

 

(17)         Investments not otherwise permitted by the foregoing clauses in an amount, taken together with all other Investments made pursuant to this clause, not to exceed $25.0 million in the aggregate outstanding at any time;

 

(18)         Guarantees of Indebtedness which Guarantees are made by the Issuer or a Restricted Subsidiary permitted under Section 4.09 and performance guarantees and guarantees of operating leases in the ordinary course of business;

 

(19)         advances to any Person in the ordinary course of business, provided that (i) such advances when made are expected to be repaid within 270 days of such advance and (ii) the aggregate amount of all advances made pursuant to this clause (19) does not exceed $23.0 million at any time outstanding; and

 

(20)         Investments consisting of amounts potentially due from a seller of property in an acquisition that (i) relate to customary post-closing adjustments with respect to accounts receivable, accounts payable and similar items typically subject to post-closing adjustments in similar transactions and (ii) are outstanding for a period of one hundred twenty (120) days or less following the closing of such acquisition.

 

“Permitted Liens” means:

 

(1)           Liens in favor of the Issuer or the Subsidiary Guarantors;

 

(2)           Liens on property or assets of a Person existing at the time such Person is merged with or into, consolidated with or acquired by the Issuer or any Restricted Subsidiary of the Issuer; provided that such Liens were in existence prior to the contemplation of such merger, consolidation

 

28

 

or acquisition and do not extend to any assets other than those of the Person merged into, consolidated with or acquired by the Issuer or such Subsidiary, plus renewals and extensions of such Liens;

 

(3)           Liens on property (including Capital Stock) existing at the time of acquisition of the property by the Issuer or any Restricted Subsidiary of the Issuer; provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition, plus renewals and extensions of such Liens;

 

(4)           Liens (including deposits and pledges) to secure the performance of public or statutory obligations, progress payments, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

 

(5)           Liens to secure Indebtedness (including Capital Lease Obligations) permitted by Section 4.09(b)(iv) covering only the assets acquired, constructed or improved with or financed by such Indebtedness;

 

(6)           Liens existing on the Issue Date (other than Liens in favor of the lenders under the Credit Facilities), plus renewals and extensions of such Liens on the same assets;

 

(7)           Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

 

(8)           Liens imposed by law, such as carriers’, warehousemen’s, landlord’s, materialmen’s, laborers’, employees’, suppliers’ and mechanics’ Liens, in each case, incurred in the ordinary course of business;

 

(9)           survey exceptions, title defects, encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that do not materially interfere with the ordinary conduct of the business of the Issuer and its Subsidiaries, taken as a whole;

 

(10)         Liens securing the Senior Secured Notes Obligations relating to the Senior Secured Notes (and the Senior Secured Note Guarantees) issued on the Issue Date;

 

(11)         Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided, however, that:

 

29

 

(a)           the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure  the original Indebtedness (plus improvements and accessions to, such property or proceeds or distributions thereof); and

 

(b)           the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

 

(12)         Liens with respect to Indebtedness that does not exceed $15.0 million at any one time outstanding, and Obligations in respect thereof; provided that to the extent that such Liens are on Collateral, the holders of such Obligations (or their representative) are party to, and such Liens are subject to, the Senior Secured Intercreditor Agreement;

 

(13)         Liens incurred in connection with a Qualified Receivables Transaction (which, in the case of the Issuer and its Restricted Subsidiaries (other than Receivables Subsidiaries) shall be limited to receivables and related assets referred to in the definition of Qualified Receivables Transaction);

 

(14)         security for the payment of workers’ compensation, unemployment insurance, other social security benefits or other insurance-related obligations (including, but not limited to, in respect of deductibles, self-insured retention amounts and premiums and adjustments thereto) entered into in the ordinary course of business;

 

(15)         deposits or pledges in connection with bids, tenders, leases and contracts (other than contracts for the payment of money) entered into in the ordinary course of business;

 

(16)         zoning restrictions, easements, licenses, reservations, provisions, encroachments, encumbrances, protrusion permits, servitudes, covenants, conditions, waivers, restrictions on the use of property or minor irregularities of title (and with respect to leasehold interests, mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without consent of the lessee), in each case, not materially interfering with the ordinary conduct of the business of the Issuer and its Subsidiaries, taken as a whole;

 

30

 

(17)         leases, subleases, licenses or sublicenses to third parties entered into in the ordinary course of business;

 

(18)         Liens securing Hedging Obligations entered into to protect against fluctuations in interest rates, exchange rates and commodity prices permitted under this Indenture; provided that to the extent that such Liens are on Collateral, the holders of such Obligations (or their representative) are party to, and such Liens are subject to, the Senior Secured Intercreditor Agreement;

 

(19)         Liens arising out of judgments, decrees, orders or awards in respect of which the Issuer shall in good faith be prosecuting an appeal or proceedings for review which appeal or proceedings shall not have been finally terminated, or if the period within which such appeal or proceedings may be initiated shall not have expired;

 

(20)         Liens on Capital Stock of an Unrestricted Subsidiary that secure Indebtedness or other obligation of such Unrestricted Subsidiary;

 

(21)         Liens on the assets of Non-Guarantor Subsidiaries securing Indebtedness of the Non-Guarantor Subsidiaries that were permitted by the terms of this Indenture to be incurred;

 

(22)         Liens arising from the precautionary filing of Uniform Commercial Code financing statements regarding leases;

 

(23)         Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection and (ii) in favor of banking institution encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

 

(24)         Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

(25)         Liens on Collateral securing Indebtedness (including Liens securing any Obligations in respect thereof) permitted to be incurred pursuant to clause (i) of Section 4.09(b) and obligations in respect of Hedging Obligations and Cash Management Obligations to Persons that are lenders in respect of such Indebtedness at the time such obligations are incurred; provided that the holders of such Indebtedness (or their representative) are party to, and such Liens are subject to, the Senior Secured Intercreditor Agreement;

 

31

 

(26)         Liens created or deemed to exist by the establishment of trusts for the purpose of satisfying government reimbursement program costs and other actions or claims pertaining to the same or related matters or other medical reimbursement programs;

 

(27)         Liens solely on any cash earned money deposits made by the Issuer or any Restricted Subsidiary with any letter of intent or purchase agreement permitted hereunder; and

 

(28)         Liens securing Indebtedness (including Liens securing any Obligations in respect thereof) permitted to be incurred pursuant to Section 4.09(a) so long as after giving effect to such incurrence and such Liens the Consolidated Secured Debt Ratio of the Issuer and its Restricted Subsidiaries shall be equal to or less than 4.50 to 1.0 for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Lien is incurred; provided that to the extent such Liens are on Collateral, (a) an authorized representative of the holders of such Indebtedness shall have executed (i) a joinder to the Senior Secured Intercreditor Agreement (in the form attached thereto) as a holder of Pari Passu Lien Indebtedness or (ii) another intercreditor agreement pursuant to which such representative shall agree with the Trustee and other representatives of First Lien Obligations that the Liens securing such Indebtedness are subordinated to the Liens securing the First Lien Obligations and (b) the Issuer may elect, pursuant to an Officer’s Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness which is to be secured by a Lien permitted by this clause (28) as being incurred at the time the Lien is incurred and any subsequent incurrence of Indebtedness under such commitment shall not be deemed to be an incurrence at such subsequent time.

 

“Permitted Payment Restriction” means any encumbrance or restriction on the ability of any Restricted Subsidiary to pay dividends or make any other distributions on its Equity Interests to the Issuer or a Restricted Subsidiary which restriction would not materially impair the Issuer’s ability to make scheduled payments of cash interest and to make required principal payments on the Notes as determined in good faith by the chief financial officer of the Issuer, whose determination shall be conclusive.

 

“Permitted Payments to Parent” means:

 

(1)           payments, directly or indirectly, to Holdings or any other direct or indirect parent company of the Issuer to be used by Holdings (or any other direct or indirect parent company of the Issuer) to pay (x) consolidated, combined or similar Federal, state and local taxes payable by Holdings (or such parent company) and directly attributable to (or arising as a result of) the operations of the Issuer and its Subsidiaries and (y)

 

32

 

franchise or similar taxes and fees of Holdings (or such parent company) required to maintain Holdings’ (or such parent company’s) corporate or other existence and other taxes; provided that:

 

(a)           the amount of such dividends, distributions or advances paid shall not exceed (x) the amount that would be due with respect to a consolidated, combined or similar Federal, state or local tax return that included the Issuer and its Subsidiaries if the Issuer were a corporation for Federal, state and local tax purposes plus (y) the actual amount of such franchise or similar taxes and fees of Holdings (or such parent company) required to maintain Holdings’ (or such parent company’s) corporate or other existence and other taxes, each as applicable; and

 

(b)           such payments are used by Holdings (or such parent company) for such purposes within 90 days of the receipt of such payments;

 

(2)           payments, directly or indirectly, to Holdings or any other direct or indirect parent company of the Issuer if the proceeds thereof are used to pay general corporate and overhead expenses (including salaries and other compensation of employees) incurred in the ordinary course of its business or of the business of Holdings or such other parent company of the Issuer as a direct or indirect holding company for the Issuer or used to pay fees and expenses (other than to Affiliates) relating to any unsuccessful debt or equity financing; and

 

(3)           payments, directly or indirectly, to Holdings or any other direct or indirect parent company of the Issuer if the proceeds thereof are used to pay amounts payable to the Permitted Holders to the extent permitted by clause (xv) of Section 4.11, solely to the extent such amounts are not paid directly by the Issuer or its Subsidiaries.

 

“Permitted Refinancing Indebtedness” means any Indebtedness of the Issuer or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, renew, refund, refinance, replace, defease or discharge other Indebtedness of the Issuer or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

 

(1)           the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees, commissions, discounts and expenses, including premiums, incurred in connection therewith);

 

33

 

(2)           either (a) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, renewed, refunded,  refinanced, replaced, defeased or discharged or (b) all scheduled payments on or in respect of such Permitted Refinancing Indebtedness (other than interest payments) shall be at least 91 days following the final scheduled maturity of the Notes;

 

(3)           if the Indebtedness being extended, renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, renewed, refunded, refinanced, replaced, defeased or discharged;

 

(4)           such Indebtedness is incurred:

 

(a)           by the Issuer or by the Restricted Subsidiary who is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged;

 

(b)           by the Issuer or any Subsidiary Guarantor if the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is the Issuer or a Subsidiary Guarantor; or

 

(c)           by any Non-Guarantor Subsidiary if the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is a Non-Guarantor Subsidiary; and

 

(5)           such Indebtedness is only secured if and to the extent and with the priority that the Indebtedness being extended, renewed, refunded, refinanced, replaced, defeased or discharged is secured.

 

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

 

“Pledged Note” has the meaning set forth in the Senior Secured Indenture.

 

“Private Placement Legend” means the legend set forth in Section 2.04(f)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

 

34

 

“Pro Forma Cost Savings” means, with respect to any period, (A) the operating expense reductions and other operating improvements or synergies that (i) were directly attributable to an acquisition, merger, consolidation or disposition (a “pro forma event”) that occurred during the four-quarter reference period or subsequent to the four-quarter reference period and on or prior to the  Calculation Date and calculated on a basis that is consistent with Article 11 of Regulation S-X under the Securities Act as in effect and applied as of the Issue Date, (ii) were actually implemented by the business that was the subject of any such pro forma event within 12 months after the date of such pro forma event and prior to the Calculation Date that are reasonably determined in good faith by a responsible financial or accounting officer of the Issuer or (iii) relate to the business that is the subject of any such pro forma event and that are reasonably determined in good faith by a responsible financial or accounting officer of the Issuer and is expected to be taken in the 12 months following such pro forma event and (B) all adjustments of the nature used in connection with the calculation of “Consolidated Adjusted EBITDA” as set forth in the Senior Secured Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period and, in the case of each of (A) and (B), are described in an Officer’s Certificate, as if all such reductions in costs had been effected as of the beginning of such period.

 

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

 

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Stock.

 

“Qualified Proceeds” means any of the following or any combination of the following:

 

(1)           Cash Equivalents;

 

(2)           the Fair Market Value of assets that are used or useful in the Permitted Business; and

 

(3)           the Fair Market Value of the Capital Stock of any Person engaged primarily in a Permitted Business if, in connection with the receipt by the Issuer or any of its Restricted Subsidiaries of such Capital Stock, such Person becomes a Restricted Subsidiary or such Person is merged or consolidated into the Issuer or any Restricted Subsidiary;

 

provided that (i) for purposes of clause (iii) of Section 4.07(a), Qualified Proceeds shall not include Excluded Contributions and (ii) the amount of Qualified Proceeds shall be reduced by the amount of payments made in respect of the applicable transaction which are permitted under clause (viii) of Section 4.11(b).

 

“Qualified Receivables Transaction” means any transaction or series of transactions entered into by the Issuer or any of its Subsidiaries pursuant to which

 

35

 

the Issuer or any of its Subsidiaries sells, conveys or otherwise transfers, or grants a security interest, to:

 

(1)           a Receivables Subsidiary (in the case of a transfer by the Issuer or any of its Subsidiaries, which transfer may be effected through the Issuer or one or more of its Subsidiaries); and

 

(2)           if applicable, any other Person (in the case of a transfer by a Receivables Subsidiary),

 

in each case, in any accounts receivable (including health care insurance receivables), instruments, chattel paper, general intangibles and similar assets (whether now existing or arising in the future, the “Receivables”) of the Issuer or any of its Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such Receivables, all contracts, contract rights and all guarantees or other obligations in respect of such Receivables, proceeds of such Receivables and any other assets, which are customarily transferred or in respect of which security interests are customarily granted in connection with receivables financings and asset securitization transactions of such type, together with any related transactions customarily entered into in a receivables financings and asset securitizations, including servicing arrangements. All determinations under this Indenture as to whether a particular provision in respect of a receivables transaction is customary shall be made by the Issuer in good faith (which determination shall be conclusive).

 

“Qualified Restricted Subsidiary” means any Restricted Subsidiary that satisfies each of the following requirements: (1) except for Permitted Payment Restrictions, there are no consensual restrictions, directly or indirectly, on the ability of such Restricted Subsidiary to pay dividends or make distributions to the holders of its Equity Interests; (2) the Equity Interests of such Restricted Subsidiary consist solely of (A) Equity Interests owned by the Issuer and its Qualified Restricted Subsidiaries, (B) Equity Interests owned by Strategic Investors and (C) directors’ qualifying shares and (3) the primary business of such Restricted Subsidiary is a Permitted Business.

 

“Receivables” has the meaning set forth in the definition of “Qualified Receivables Transaction” above.

 

“Receivables Fees” means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Qualified Receivables Transaction.

 

“Receivables Subsidiary” means a Subsidiary of the Issuer which engages in no activities other than in connection with the financing of accounts receivable and in businesses related or ancillary thereto and that is designated by the Board of Directors of the Issuer (as provided below) as a Receivables

 

36

 

Subsidiary (A) no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which:

 

(1)           is guaranteed by the Issuer or any Subsidiary of the Issuer (excluding guarantees of Obligations (other than the principal of, and interest on, Indebtedness) pursuant to representations, warranties, covenants and indemnities customarily entered into in connection with a Qualified Receivables Transaction);

 

(2)           is recourse to or obligates the Issuer or any Subsidiary of the Issuer in any way other than pursuant to representations, warranties, covenants and indemnities customarily entered into in connection with a Qualified Receivables Transaction; or

 

(3)           subjects any property or asset of the Issuer or any Subsidiary of the Issuer (other than accounts receivable and related assets as provided in the definition of Qualified Receivables Transaction), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to representations, warranties, covenants and indemnities customarily entered into in connection with a Qualified Receivables Transaction; and

 

(B) with which neither the Issuer nor any Subsidiary of the Issuer has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Issuer or such Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Issuer, other than as may be customary in a Qualified Receivables Transaction including for fees payable in the ordinary course of business in connection with servicing accounts receivable; and (C) with which neither the Issuer nor any Subsidiary of the Issuer has any obligation to maintain or preserve such Subsidiary’s financial condition or cause such Subsidiary to achieve certain levels of operating results other than pursuant to representations, warranties, covenants and indemnities entered into in connection with a Qualified Receivables Transaction. Any such designation by the Board of Directors of the Issuer will be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the foregoing conditions.

 

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of Common Stock (or other applicable security) entitled to receive such cash, securities or other property (whether such date is fixed by  the Board of Directors of Holdings or by statute, contract or otherwise).

 

37

 

“Redemption Date” means the date fixed by the Issuer for redemption of any Notes in accordance with the terms of the Notes.

 

“Redemption Price” has the meaning set forth in Section 3.07.

 

“Reference Property” has the meaning set forth in Section 10.06(d).

 

“Registrar” has the meaning set forth in Section 4.02.

 

“Registration Rights Agreement” means (i) the Registration Rights Agreement, dated as of June 14, 2011 among the Issuer, Holdings, the Subsidiary Guarantors and the Initial Holders, as such agreement may be amended, modified or supplemented from time to time and (ii) with respect to any Additional Notes, one or more registration rights agreements among the Issuer and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Issuer to the purchasers of Additional Notes to register such Additional Notes under the Securities Act.

 

“Reorganization Event” has the meaning set forth in Section 10.06(d).

 

“Replacement Preferred Stock” means any Disqualified Stock of the Issuer or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to redeem, renew, refund, refinance, replace or discharge any Disqualified Stock of the Issuer or any of its Restricted Subsidiaries (other than intercompany Disqualified Stock); provided that such Replacement Preferred Stock (i) is issued by the Issuer or by the Restricted Subsidiary who is the issuer of the Disqualified Stock being redeemed, refunded, refinanced, replaced or discharged, (ii) does not have an initial liquidation preference in excess of the liquidation preference plus accrued and unpaid dividends on the Disqualified Stock being redeemed, refunded, refinanced, replaced or discharged and (iii) does not require redemption, repurchase or discharge at any time prior to the date on which the Disqualified Stock being redeemed, refunded, refinanced, replaced or discharged is required to be redeemed, repurchased or discharged.

 

“Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject and who shall have responsibility for the administration of this Indenture.

 

“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

 

38

 

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Payment” has the meaning set forth in Section 4.07(a).

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

 

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

 

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

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Senior Secured Indenture” means the Indenture, dated as of June 14, 2011, by and among the Issuer, the guarantors named therein, and the Trustee, as trustee, relating to the Senior Secured Notes.

 

“Senior Secured Intercreditor Agreement” means the Intercreditor Agreement (as defined in the Senior Secured Indenture).

 

“Senior Secured Exchange Notes” means the Exchange Notes (as defined in the Senior Secured Indenture).

 

“Senior Secured Notes” means the 8.00% Senior Secured Notes due 2016 of the Issuer.

 

“Senior Secured Note Guarantees” means the Guarantees of the Issuer’s Obligations under the Senior Secured Indenture and the Senior Secured Notes, executed pursuant to the provisions of the Senior Secured Indenture.

 

“Senior Secured Notes Obligations” means Obligations in respect of the Senior Secured Notes, the Senior Secured Guarantees and the Senior Secured Indenture.

 

“Senior Secured Offering Memorandum” means the Issuer’s offering memorandum, dated June 7, 2011, related to the issuance and sale of the Senior Secured Notes on the Issue Date.

 

“Senior Secured Registration Rights Agreement” means the Registration Rights Agreement (as defined in the Senior Secured Indenture).

 

39

 

“Senior Secured Security Documents” means the Security Documents (as defined in the Senior Secured Indenture).

 

“Shareholders Agreement” shall mean the Shareholders Agreement, dated as of August 23, 2007, among Holdings, Crestview Symbion Holdings L.L.C., The Northwestern Mutual Life Insurance Company, on behalf of itself and on behalf of its Group Annuity Separate Account, Trident IV, L.P., Trident IV Professionals Fund, L.P., Banc of America Capital Investors V, L.P., R6 Opportunity Fund, L.P., R6 Overseas Opportunity Fund, Ltd. and certain other persons named therein, as amended or supplemented from time to time.

 

“Shareholders Agreement Legend” means the legend set forth in Section 2.04(f)(iii), which is required to be placed on all Notes issued under this Indenture to the extent required pursuant to the terms of the Shareholders Agreement.

 

“Shelf Registration Statement” means the Shelf Registration Statement as defined in the Registration Rights Agreement.

 

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02(w) of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on August 23, 2007. For purposes of determining whether an Event of Default has occurred, if any group of Restricted Subsidiaries as to which a particular event has occurred and is continuing at any time would be, taken as a whole, a “Significant Subsidiary” then such event shall be deemed to have occurred with respect to a Significant Subsidiary.

 

“Sponsor Management Agreement” means the Management Agreement between the Issuer and Crestview Partners GP, L.P. dated as of August 23, 2007.

 

“Spin-Off” has the meaning set forth in Section 10.05(c).

 

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

 

“Strategic Investors” means physicians, hospitals, health systems, other healthcare providers, other healthcare companies and other similar strategic joint venture partners which joint venture partners are actively involved in the day-to-day operations of providing surgical care and surgery-related services, or, in the case of physicians, that have retired therefrom, individuals who are former owners or employees of surgical care facilities purchased by the Issuer, any of its Restricted Subsidiaries, and consulting firms that receive common stock solely as consideration for consulting services performed.

 

40

 

“Subsidiary” means, with respect to any specified Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or  other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date.

 

“Subsidiary Guarantor” means each Restricted Subsidiary of the Issuer that executes a Note Guarantee in accordance with the provisions of this Indenture, and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of this Indenture.

 

“Temporary Notes” has the meaning set forth in Section 2.08.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified thereunder.

 

“Total  Assets” means the total consolidated assets of the Issuer and its Restricted Subsidiaries as set forth on the most recent consolidated balance sheet of the Issuer and its Restricted Subsidiaries prepared in accordance with GAAP.

 

“Trading Day” means:

 

(1)           at any time before the closing date of the IPO, a Business Day; and

 

(2)           at any time on or after the closing date of the IPO,  a day on which (x) trading in the Common Stock generally occurs on the principal United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, in the principal other market on which the Common Stock is then traded, and (y) a Closing Sale Price for the Common Stock is available on such securities exchange or market. If the Common Stock (or other security for which a closing sale price must be determined) is not so listed or traded, “Trading Day” means a Business Day.

 

“Transactions” means, collectively, (i) the offering of the Senior Secured Notes, (ii) the refinancing of all of the Issuer’s obligations under the Credit Agreement dated as of August 23, 2007, among Symbol Merger Sub, Inc. (which was merged with and into the Issuer), a Delaware corporation, the lenders party thereto from time to time, Merrill Lynch Capital Corporation, as administrative agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners, Bank of America, N.A., as syndication agent, and The Royal Bank of Scotland plc and Fifth Third Bank, as co-documentation agents, (iii) the refinancing of a portion of the Issuer’s obligations under the 2015 Notes

 

41

 

(including the issuance of the Notes in exchange for a portion of the 2015 Notes),  and (iv) the Issuer’s entry into the Credit Agreement, each as described in the Senior Secured Offering Memorandum.

 

“Trigger Event” has the meaning set forth in Section 10.05(c).

 

“Trustee” means the party named as the “Trustee” in the first paragraph of this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

 

“Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State of New York, and any successor statute, as in effect from time to time (except that terms used herein that are defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute).

 

“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear the Private Placement Legend.

 

“Unrestricted Subsidiary” means any Subsidiary of the Issuer that is designated by the Board of Directors of the Issuer as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors and any Subsidiary of an Unrestricted Subsidiary.

 

The Issuer may designate any Subsidiary of the Issuer (including any existing Subsidiary and any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, the Issuer or any Subsidiary of the Issuer (other than solely any Subsidiary of the Subsidiary to be so designated); provided that:

 

(1)           such designation complies with Section 4.07; and

 

(2)           each of:

 

(a)           the Subsidiary to be so designated; and

 

(b)           its Subsidiaries have not at the time of designation, and does not thereafter, incur any Indebtedness other than Non-Recourse Debt (except to the extent such Indebtedness by the Issuer or any Restricted Subsidiary is otherwise permitted to be incurred under this Indenture).

 

“Valuation Period” has the meaning set forth in Section 10.05(c).

 

42

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

 

(1)           the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

 

(2)           the then outstanding principal amount of such Indebtedness.

 

Section 1.02.  Incorporation by Reference of Trust Indenture Act.

 

(a)        Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.

 

(b)        The following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Notes;

 

“indenture security holder” means a Holder of a Note;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the Trustee; and

 

“obligor” on the Notes and the Note Guarantees means the Issuer and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.

 

(c)        All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

Section 1.03.  Rules of Construction and Calculation.

 

Unless the context otherwise requires:

 

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

 

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

 

43

 

(c)        “or” is not exclusive;

 

(d)        words in the singular include the plural, and in the plural include the singular;

 

(e)        “will” shall be interpreted to express a command;

 

(f)         provisions apply to successive events and transactions;

 

(g)        references to sections of or rules under the Securities Act will be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

 

(h)        “including” shall be interpreted to mean “including without limitation”;

 

(i)         references to Sections, Articles and Exhibits shall refer to Sections, Articles and Exhibits of this Indenture;

 

(j)         references to “Notes” for all purposes of this Indenture include any Additional Notes that are actually issued; and

 

(k)        references to “principal” of any Note shall be deemed to include the Accreted Principal Amount and the Redemption Price, if applicable, of such Note.

 

ARTICLE 2
 THE NOTES

 

Section 2.01.  Form and Dating.

 

(a)        General.  The Notes shall be designated as “8.00% Senior PIK Exchangeable Notes due 2017” and limited in aggregate Initial Principal Amount to $88,490,000, except as otherwise provided in this Indenture. The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the forms set forth in Exhibit A, and the Exchange Notice and Assignment shall be substantially in the forms set forth in Attachments 1 and 2 to the form of Note set forth in Exhibit A. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage (provided that any such notation, legend or endorsement required by usage is in a form reasonably acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issued in minimum denominations of $1,000 Initial Principal Amount and integral multiples of $1,000 Initial Principal Amount in excess thereof.

 

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Issuer, the Guarantors and

 

44

 

the Trustee, by their execution and delivery of this Indenture, expressly agree to  such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

(b)        Payment at Maturity.  The Notes shall mature on June 15, 2017, unless earlier exchanged or redeemed in accordance with the provisions hereof.  On the Maturity Date, each Holder shall be entitled to receive the Accreted Principal Amount of its Notes as of the Maturity Date, including any accrued and non-capitalized interest to, but excluding, the Maturity Date.  With respect to Global Notes, principal and interest shall be paid to the Depositary in immediately available funds.  With respect to Definitive Notes, principal and interest shall be payable at the Issuer’ office or agency in New York City, which initially will be the Corporate Trust Office.

 

(c)        Interest.  Interest on the Notes shall accrue on the Accreted Principal Amount of the Notes at the rate of 8.00% per annum from the Issue Date or from the most recent Interest Accrual Date, and will compound on a semi-annual basis on each June 15 and December 15 of each year, whether or not any such date is a Business Day (each, an “Interest Accrual Date”), commencing on December 15, 2011.  In addition, Additional Interest shall accrue on the Accreted Principal Amount of the Notes at the rate and during the periods as provided in Section 2.04 of the Registration Rights Agreement.  Except as otherwise provided in this Indenture, the Issuer shall not pay interest (including Additional Interest, if any) in cash on any Interest Accrual Date, but instead the Accreted Principal Amount shall be increased as of such Interest Accrual Date by the Accretion Amount for such Interest Accrual Date.  However, if a Redemption Date occurs (i) on a day that is not an Interest Accrual Date, the Issuer shall pay the interest (including Additional Interest, if any) accrued on the Notes from, and including, the immediately preceding Interest Accrual Date to, but excluding, such Redemption Date in cash, or (ii) on a day that is an Interest Accrual Date, the Issuer shall pay the Accretion Amount for such Interest Accrual Date in cash.  Interest (including Additional Interest, if any) shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

(d)        Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Global Note” attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Global Note” attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it represents the Initial Principal Amount of outstanding Notes from time to time endorsed thereon and that the aggregate Initial Principal Amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate

 

45

 

Initial Principal Amount of outstanding Notes represented thereby shall be made  by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.04 and shall be made on the records of the Trustee and the Depositary.

 

Section 2.02.  Execution and Authentication.  At least one Officer must sign the Notes for the Issuer by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

 

A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature of the Trustee shall be conclusive evidence that the Note has been duly authenticated under this Indenture.

 

The Trustee shall authenticate and deliver: (i) on the Issue Date, an aggregate Initial Principal Amount of $88,490,000 Initial Notes and (ii) Additional Notes, if any, for an original issue in an aggregate Initial Principal Amount specified in an Authentication Order pursuant to this Section 2.02 and in accordance with Section 2.12, in each case upon a written order of the Issuer signed by one Officer (an “Authentication Order”). Such Authentication Order shall specify the amount of the Notes to be authenticated and the date on which the original issue of the Notes is to be authenticated.

 

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuer.

 

Section 2.03.  Holder 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 all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at least seven Business Days before each Interest Accrual 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 the Holders and the Issuer shall otherwise comply with TIA Section 312(a).

 

Section 2.04.  Transfer and Exchange.  (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except in whole (but not in part) by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes shall be exchanged by the Issuer for Definitive Notes if:

 

46

 

(i)            the Depository (A) notifies the Issuer that it is unwilling or unable to continue as Depositary for the Global Notes or (B) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuer within 90 days after the date of such notice from the Depositary; or

 

(ii)           there has occurred and is continuing a Default or an Event of Default with respect to the Notes.

 

Upon the occurrence of any of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.05 and 2.08. A Global Note may not be exchanged for another Note other than as provided in this Section 2.04(a); however, beneficial interests in a Global Note may be transferred and exchanged for beneficial interests in other Global Notes as provided in Section 2.04(b) or (c).

 

(b)        Transfer and Exchange of Beneficial Interests in Global Notes. The transfer and exchange of beneficial interests in Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(i)            Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.04(b)(i).

 

(ii)           All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.04(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either:

 

(A)       both:

 

(1)        a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary

 

47

 

to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(2)        instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

 

(B)       both:

 

(1)        a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(2)        instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in clause (1) above.

 

Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the Initial Principal Amount of the relevant Global Note(s) pursuant to Section 2.04(g).

 

(iii)          Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.04(b)(ii) above and:

 

(A)       such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

 

(B)       the Registrar receives the following:

 

(1)        if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such

 

48

 

beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

 

(2)        if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (3) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to subparagraph (A) or (B) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate Initial Principal Amount equal to the aggregate Initial Principal Amount of beneficial interests transferred pursuant to subparagraph (A) or (B) above.

 

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

 

(c)        Transfer or Exchange of Beneficial Interests for Definitive Notes.

 

(i)           Beneficial Interests in Restricted Global Note to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:

 

(A)          if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

 

49

 

(B)           if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

(C)           if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2)(a) thereof;

 

(D)          if such beneficial interest is being transferred to the Issuer or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2)(b) thereof; or

 

(E)           if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2)(c) thereof,

 

the Trustee shall cause the aggregate Initial Principal Amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.04(g), and the Issuer shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate Initial Principal Amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.04(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.04(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

 

(ii)          Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:

 

(A)          such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

 

50

 

(B)           the Registrar receives the following:

 

(1)           if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

 

(2)           if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (3) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iii)         Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.04(b)(ii), the Trustee shall cause the aggregate Initial Principal Amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.04(g), and the Issuer shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate Initial Principal Amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.04(c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.04(c)(iii) shall not bear the Private Placement Legend.

 

(d)        Transfer and Exchange of Definitive Notes for Beneficial Interests.

 

51

 

(i)           Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

 

(A)          if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

 

(B)           if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; or

 

(C)           if such Restricted Definitive Note is being transferred to the Issuer or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2)(b) thereof,

 

the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate Initial Principal Amount of the applicable Global Note.

 

(ii)          Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

 

(A)          such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

 

(B)           the Registrar receives the following:

 

(1)           if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

 

52

 

(2)           if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (3) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this 2.04(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate Initial Principal Amount of the Unrestricted Global Note.

 

(iii)         Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate Initial Principal Amount of one of the Unrestricted Global Notes.

 

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(A), (ii)(B) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Issuer shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate Initial Principal Amount equal to the Initial Principal Amount of Definitive Notes transferred or exchanged pursuant to subparagraph (ii)(A), (ii)(B) or (iii) above.

 

(e)        Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.04(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any

 

53

 

additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.04(e).

 

(i)           Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of the Person or Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

 

(A)          if the transfer shall be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and

 

(B)           if the transfer shall be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications required by item (2) thereof, if applicable.

 

(ii)          Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

 

(A)          any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

 

(B)           the Registrar receives the following:

 

(1)           if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof;

 

(2)           if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (3) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the

 

54

 

Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iii)         Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

 

(f)    Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

 

(i)           Private Placement Legend.

 

(A)          Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form (unless otherwise agreed by the Issuer with written notice thereof to the Trustee).

 

“THE NOTES EVIDENCED HEREBY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON EXCHANGE HEREOF, HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR ANY NON-U.S. OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

 

(I)  REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; AND

 

(II)  AGREES, FOR THE BENEFIT OF SYMBION, INC. (THE “ISSUER”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN EXCEPT:

 

55

 

(A) (1) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (2) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND

 

(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.”

 

(B)           Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iii), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) of this Section 2.04 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

 

(C)           Any certificate representing shares of Common Stock issued upon exchange of any Note required to bear the Private Placement Legend shall bear a legend substantially in the following form (unless such Note or such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to an exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon exchange of Notes that have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or similar provision then in force under the Securities Act, or unless otherwise agreed by the Issuer with written notice thereof to the Trustee and any transfer agent for the Common Stock).

 

“THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR ANY NON-U.S. OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE

 

56

 

TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

 

(I)          REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; AND

 

(II)         AGREES, FOR THE BENEFIT OF SYMBION HOLDINGS CORPORATION (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN EXCEPT:

 

(A)          (1)  TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (2) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND

 

(B)           IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.”

 

(ii)          Global Note Legend. Each Global Note shall bear a legend in substantially the following form:

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.01 AND SECTION

 

57

 

2.04 OF THE INDENTURE GOVERNING THIS GLOBAL NOTE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.04(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.09 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.”

 

(iii)         Shareholders Agreement Legend. Each Note and any certificate representing shares of Common Stock issued upon exchange of any Note shall bear the following legend to the extent required pursuant to the terms of the Shareholders Agreement:

 

THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SHAREHOLDERS AGREEMENT DATED AS OF AUGUST 23, 2007, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM SYMBION HOLDINGS CORPORATION OR ANY SUCCESSOR THERETO.

 

58

 

(g)   Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or shares of Common Stock, or a particular Global Note has been redeemed or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.09. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the Initial Principal Amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(h)   General Provisions Relating to Transfers and Exchanges.

 

(i)           To permit registrations of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 or at the Registrar’s request.

 

(ii)          No service charge shall be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuer 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 similar governmental charge payable upon exchange or transfer pursuant to Sections 2.08, 3.06, 3.08, 4.10 and 9.06).

 

(iii)         The Registrar shall not be required to register the transfer of or exchange of (A) any Notes surrendered for exchange or, if a portion of any Note is surrendered for exchange, such portion thereof surrendered for exchange, or (B) any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

(iv)        All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(v)         Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat the

 

59

 

Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuer shall be affected by notice to the contrary.

 

(vi)        The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02.

 

(vii)       All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.04 to effect a registration of transfer or exchange may be submitted by facsimile.

 

(viii)      Neither the Trustee nor the Registrar shall be under any obligation or duty to determine or inquire as to compliance with the Securities Act (including any rules or regulations promulgated thereunder) or any state securities laws that may be applicable in connection with or with respect to any transfer of any interest in any Note (including any transfers between or among Beneficial Owners of interests in any Global Note) or to monitor, determine or inquire as to compliance with any restriction on transfer imposed under this Indenture with respect to transfers of interests in any security (including any transfers between or among Beneficial Owners of interests in any Global Notes); except that the Trustee shall be under a duty to require delivery of such certificates and other documentation, if any, as are expressly required in the applicable circumstance, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance on their face with the express requirements hereof. The Trustee shall have no responsibility for (A) the actions or omissions of the Depositary, or for the accuracy of the books or records of the Depositary and (B) transfers, of which it has no knowledge, between or among Beneficial Owners of interests in the same Global Note.

 

Section 2.05.  Replacement Notes.  If any mutilated Note is surrendered to the Trustee or the Registrar and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuer shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuer to protect the Issuer, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Issuer may charge for its expenses in replacing a Note.

 

Every replacement Note is an additional obligation of the Issuer and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

 

60

 

Section 2.06.  Outstanding Notes.  The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.06 as not outstanding. Subject to Section 2.07, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note.

 

If a Note is replaced pursuant to Section 2.05, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

 

If the Accreted Principal Amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.

 

If the Paying Agent (other than the Issuer, a Subsidiary or an Affiliate of any thereof) holds, on a Redemption Date or Maturity Date , money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

Section 2.07.  Treasury Notes.  In determining whether the Holders of the required Initial Principal Amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer or any of its Subsidiaries, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.

 

Section 2.08.  Temporary Notes.  Until certificates representing Notes are ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes (“Temporary Notes”). Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Issuer considers appropriate for Temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate Definitive Notes in exchange for Temporary Notes.

 

Holders of Temporary Notes shall be entitled to all of the benefits of this Indenture.

 

Section 2.09.  Cancellation.  The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such canceled Notes (subject to the record retention requirement of the Exchange Act). Certification of the disposal of all canceled Notes shall be

 

61

 

delivered to the Issuer upon its request therefor. The Issuer may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. If the Issuer shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.09.

 

Section 2.10.  [Reserved].

 

Section 2.11.  CUSIP Numbers.  The Issuer in issuing the Notes may use CUSIP numbers and corresponding ISIN numbers (if then generally in use), and, if so, the Trustee will use CUSIP numbers in all notices issued to Holders as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any such notice and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption or other rights hereunder will not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee of any change in the CUSIP numbers.

 

Section 2.12.  Issuance of Additional Notes.  The Issuer will be entitled, from time to time, subject to its compliance with Section 4.09, without consent of the Holders, to issue Additional Notes under this Indenture with identical terms as the Initial Notes issued on the Issue Date other than with respect to (a) the date of issuance, (b) the issue price, (c) the amount of interest to be accrued on the first Interest Accrual Date and (d) any adjustments in order to conform to and ensure compliance with the Securities Act (or other applicable securities laws).

 

The Notes and the Additional Notes, if any, shall be treated as a single class for all purposes of this Indenture, including waivers, amendments and redemptions; provided that if any Additional Notes subsequently issued are not fungible for U.S. federal income tax purposes or securities law purposes with any Notes previously issued, such Additional Notes shall trade separately from such previously issued Notes under a separate CUSIP number but shall otherwise be treated as a single class with all other Notes issued under this Indenture.

 

With respect to any Additional Notes, the Issuer will set forth in an Officer’s Certificate pursuant to a resolution of the Board of Directors of the Issuer, copies of which will be delivered to the Trustee, the following information:

 

(i)            the aggregate Initial Principal Amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture;

 

(ii)           the issue price, the issue date and the CUSIP number of such Additional Notes; and

 

62

 

(iii)          whether such Additional Notes will be subject to transfer restrictions.

 

ARTICLE 3

REDEMPTION

 

Section 3.01.  Notices to Trustee.  If the Issuer elects to redeem Notes pursuant to the optional redemption provisions of Section 5 of the Notes, the Issuer shall furnish to the Trustee, at least 30 days but not more than 60 days before the Redemption Date, an Officer’s Certificate setting forth:

 

(a)        the clause of this Indenture pursuant to which the redemption shall occur;

 

(b)        the Redemption Date;

 

(c)        the Initial Principal Amount of the Notes to be redeemed; and

 

(d)        the Redemption Price.

 

Section 3.02.  Selection of Notes to be Redeemed.  If less than all of the Notes are to be redeemed at any time, the Trustee shall select Notes for redemption on a pro rata basis except:

 

(a)        if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

 

(b)        if otherwise required by law.

 

In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption.

 

The Trustee shall promptly notify the Issuer in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the Initial Principal Amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 Initial Principal Amount or integral multiples of $1,000 Initial Principal Amount in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000 Initial Principal Amount, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

63

 

Section 3.03.  Notice of Redemption.  At least 30 days but not more than 60 days before a Redemption Date, the Issuer shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.

 

The notice shall identify the Notes to be redeemed (including CUSIP Number(s)) and shall state:

 

(a)        the Redemption Date;

 

(b)        the Redemption Price;

 

(c)        if any Note is being redeemed in part, the portion of the Initial Principal Amount of such Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in Initial Principal Amount equal to the unredeemed portion of the Initial Principal Amount shall be issued upon cancellation of the original Note;

 

(d)        the name and address of the Paying Agent;

 

(e)        that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price;

 

(f)         that, unless the Issuer defaults in making such redemption payment, interest and Additional Interest, if any, on Notes called for redemption ceases to accrue on and after the relevant Redemption Date;

 

(g)        the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and

 

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

 

At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at its expense; provided, however, that the Issuer has delivered to the Trustee, at least 45 days prior to the Redemption Date (or such shorter period as to which the Trustee may agree), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

 

Section 3.04.  Effect of Notice of Redemption.  Once notice of redemption is mailed in accordance with Section 3.03, Notes called for redemption become irrevocably due and payable on the relevant Redemption Date at the relevant Redemption Price, unless previously exchanged for shares of Common Stock pursuant to Article 10.  A notice of redemption may be conditional.

 

Section 3.05.  Deposit of Redemption Price.  On the relevant Redemption Date, the Issuer shall deposit with the Trustee or with the Paying Agent money

 

64

 

sufficient to pay the Redemption Price of and accrued and non-capitalized interest and Additional Interest, if any, on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the Redemption Price of, and accrued interest and Additional Interest, if any, on, all Notes to be redeemed.

 

If the Issuer complies with the provisions of the preceding paragraph, on and after the Redemption Date, interest and Additional Interest, if any, shall cease to accrue on the Notes or the portions of Notes called for redemption. If any Note called for redemption is not so paid upon surrender for redemption because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the Redemption Date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01.

 

Section 3.06.  Notes Redeemed in Part.  Upon surrender of a Note that is redeemed in part, the Issuer shall issue and, upon receipt of an Authentication Order, the Trustee shall authenticate for the Holder at the expense of the Issuer a new Note equal in Initial Principal Amount to the unredeemed portion of the Initial Principal Amount of the Note surrendered; provided that each new Note will be in denominations of $1,000 Initial Principal Amount or an integral multiple of $1,000 Initial Principal Amount in excess thereof.

 

Section 3.07.  Optional Redemption.  The Issuer may not redeem the Notes prior to June 15, 2014.  On or after June 15, 2014 and prior to the Maturity Date, the Issuer may redeem all or a part of the Notes upon not less than 30 nor more than 60 days’ notice, at the Redemption Price set forth below in the table below (expressed as a percentage of the Accreted Principal Amount and based on the period during which the relevant Redemption Date occurs), plus accrued and non-capitalized interest on the Notes to be redeemed, including any Additional Interest, to, but excluding, the relevant Redemption Date (the “Redemption Price”).

 

 

 

	
Redemption Date
    	
 
    	
Percentage of Accreted
   Principal Amount
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Redemption Date occurs during the period from, and including,   June 15, 2014 to, but excluding, June 15, 2015
    	
 
    	
104
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Redemption Date occurs during the period from, and including,   June 15, 2015 to, but excluding, June 15, 2016
    	
 
    	
102
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Redemption Date occurs during the period from, and including,   June 15, 2016 to, but excluding, June 15, 2017
    	
 
    	
100
    	
%
    

 

65

 

Section 3.08.  Mandatory Redemption.  The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

ARTICLE 4

COVENANTS

 

Section 4.01.  Payment of Notes.  The Issuer shall pay or cause to be paid the principal of, premium, if any, and interest and Additional Interest, if any, on the Notes on the dates and in the manner provided in this Indenture and the Notes. Principal, premium, if any, and interest and Additional Interest, if any, shall be considered paid on the date due if the Paying Agent, if other than the Issuer or a Subsidiary thereof, holds on the due date money deposited by or on behalf of the Issuer in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

 

The Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including postpetition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful.

 

Section 4.02.  Maintenance of Office or Agency.  The Issuer shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee) where Notes may be surrendered for registration of transfer or for exchange (the “Registrar”), presented for payment (the “Paying Agent”), surrendered for exchange pursuant to Article 10 (the “Exchange Agent”) and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of the Notes and of their transfer and exchange (the “Note Register”). The Issuer may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Issuer may change any Paying Agent or Registrar without notice to any Holder. The Issuer shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture and shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Issuer fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its

 

66

 

obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Issuer shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

The Issuer initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes. The Issuer initially appoints the Trustee to act as the Registrar, Paying Agent and Exchange Agent and to act as Custodian with respect to the Global Notes.

 

Section 4.03.  Paying Agent to Hold Money in Trust.  The Issuer 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 money held by the Paying Agent for the payment of principal, premium or Additional Interest, if any, or interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. While any such default continues, the Trustee may require in writing a Paying Agent to pay all money held by it in trust to the Trustee. The Issuer at any time may require in writing a Paying Agent to pay all money held by it in trust to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Issuer or a Subsidiary) shall have no further liability for the money. If the Issuer or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

 

Section 4.04.  Reports.  (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Issuer shall furnish to the Trustee and to Cede & Co., the nominee of DTC, and the Holders of the Notes, within the time periods that are applicable to the Issuer (or, if not applicable, would be if the Issuer were required to file such reports under Section 13(a) or 15(d) of the Exchange Act as a non-accelerated filer):

 

(i)            all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K, if the Issuer was required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the Issuer’s consolidated financial condition and results of operation and, with respect to the annual information only, a report thereon by the Issuer’s independent registered public accountants but not any assessment, attestation or audit of internal controls pursuant to Section 404 of the Sarbanes-Oxley Act or rules and regulations promulgated thereunder; and

 

(ii)           all current reports that would be required to be filed with the SEC on Form 8-K if the Issuer was required to file such reports.

 

67

 

(b)        The Issuer may satisfy its obligation to furnish such information to the Trustee and Cede & Co. at any time by filing such information with the SEC.  If, notwithstanding the foregoing, the SEC will not accept such filings for any reason, the Issuer shall post the reports specified in Section 4.04(a) on its website within the time periods that would apply if the Issuer were required to file those reports with the SEC.

 

(c)        The Issuer agrees that, for so long as any Notes remain outstanding, or any shares of Common Stock issuable upon exchange thereof shall constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Issuer shall promptly furnish to the Trustee and to any Beneficial Owner of Notes or any shares of Common Stock issued upon exchange of such Notes or to any prospective purchaser of Notes or any shares of Common Stock issued upon exchange of such Notes in connection with any sale thereof, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.  The Issuer shall take such further action as any Holder or Beneficial Owner of such Notes or such Common Stock may reasonably request to the extent required from time to time to enable such Holder or Beneficial Owner to sell such Notes or shares of Common Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.

 

(d)        If at any time Holdings (or any other direct or indirect parent company of the Issuer) holds no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer or any other direct or indirect parent company of the Issuer (and performs the related incidental activities associated with such ownership) and complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be furnished to the Trustee and Cede & Co. or filed with the SEC pursuant to this Section 4.04 may, at the option of the Issuer, be those of Holdings (or such other parent company) rather than the Issuer.

 

Notwithstanding the foregoing, such requirements shall be deemed satisfied prior to the effectiveness of the Shelf Registration Statement (i) by the filing with the SEC of the Shelf Registration Statement (or any other similar registration statement), and any amendments thereto, with such financial information that satisfies Regulation S-X, to the extent filed within the times specified above, or (ii) by posting reports that would be required to be filed substantially in the form required by the SEC (subject to the limitations set forth above) on the Issuer’s website (or that of any of its parent companies) or providing such reports to the Trustee within 15 days after the time the Issuer would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act, the financial information (including a “Management’s Discussion and Analysis of Financial Condition and Results of Operation”) that would be required to be included in such reports, to the extent filed within the times specified above.

 

68

 

(e)        Notwithstanding anything herein to the contrary, the Issuer will not be deemed to have failed to comply with any of its obligations hereunder for purposes of Section 6.01(d) until 90 days after the date any report hereunder is due.

 

(f)         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 Issuer’s compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

 

Section 4.05.  Compliance Certificate.  (a) The Issuer shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Issuer, an Officer’s Certificate stating that a review of the activities of the Issuer and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to his or her knowledge the Issuer has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuer is taking or proposes to take with respect thereto).

 

(b)        So long as any of the Notes are outstanding, the Issuer shall deliver to the Trustee, within 30 days upon any Officer becoming aware of any Default or Event of Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.

 

Section 4.06.  Stay, Extension and Usury Laws.  The Issuer and each of the Guarantors covenant (to the extent that they may lawfully do so) that they shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenant that they shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 4.07.  Restricted Payments.  (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

69

 

 

(i)                                     declare or pay any dividend or make any other payment or distribution on account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Issuer); provided that the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of a Restricted Subsidiary of the Issuer shall not constitute a Restricted Payment;

 

(ii)                                  purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Issuer) any Equity Interests of the Issuer, Holdings or any other direct or indirect parent of the Issuer;

 

(iii)                               make any payment on or with respect to, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Issuer or any Subsidiary Guarantor that is contractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries), except (A) a payment of interest or principal at the Stated Maturity thereof or (B) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of any such subordinated Indebtedness purchased in anticipation of satisfying a sinking fund obligation, principal installment or payment at final maturity, in each case within one year of the date of such purchase, repurchase, redemption, defeasance or other acquisition or retirement; or

 

(iv)                              make any Restricted Investment;

 

(all such payments and other actions set forth in these clauses (i) through (iv) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:

 

(A)                              no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;

 

(B)                                the Issuer would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) of this Indenture; and

 

70

 

(C)                                such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries since the Issue Date (including Restricted Payments permitted by clauses (i), (x), (xi) and (xiv) of Section 4.07(b) but excluding all other clauses of Section 4.07(b)), is less than the sum, without duplication, of:

 

(1)                                  50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the Issue Date to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

 

(2)                                  100% of the aggregate Qualified Proceeds received by the Issuer since the Issue Date as a contribution to its equity capital (other than Disqualified Stock) or from the issue or sale of Equity Interests of the Issuer (other than Disqualified Stock, Excluded Contributions, and Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Issuer) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Issuer that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Issuer); plus

 

(3)                                  an amount equal to the net reduction in Investments by the Issuer and its Restricted Subsidiaries resulting from (i) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of any Restricted Investment that was made after the Issue Date and (ii) repurchases, redemptions and repayments of such Restricted Investments and the receipt of any dividends or distributions from such Restricted Investments (other than, in each case, to the extent such Investment was made by the Issuer or any Restricted Subsidiary of the Issuer pursuant to clause (xv) or (xix) of Section 4.07(b) and such amounts received have been applied to increase availability under such basket); plus

 

(4)                                  to the extent that any Unrestricted Subsidiary of the Issuer designated as such after the Issue Date is redesignated as a Restricted Subsidiary after the

 

71

 

Issue Date, an amount equal to the lesser of (i) the Fair Market Value of the Issuer’s interest in such Subsidiary immediately prior to such redesignation and (ii) the aggregate amount of the Issuer’s Investments in such Subsidiary that was previously treated as a Restricted Payment other than, in each case, to the extent such Investment was made by the Issuer or any Restricted Subsidiary of the Issuer pursuant to clause (xv) or (xix) of Section 4.07(b) and such amounts received have been applied to increase availability under such basket); plus

 

(5)                                  in the event the Issuer and/or any Restricted Subsidiary of the Issuer makes any Investment after the Issue Date in a Person that, as a result of or in connection with such Investment, becomes a Restricted Subsidiary of the Issuer, an amount equal to the existing Investment of the Issuer and/or any of its Restricted Subsidiaries in such Person that was previously treated as a Restricted Payment (other than to the extent such Investment was made by the Issuer or any Restricted Subsidiary of the Issuer pursuant to clauses (xv) or (xix) of Section 4.07(b) and such amounts received have been applied to increase availability under such basket).

 

(b)                                 The preceding Section 4.07(a) shall not prohibit:

 

(i)                         the payment of any dividend or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of this Indenture;

 

(ii)                      the making of any Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer) of, Equity Interests of the Issuer (other than Disqualified Stock) or from the substantially concurrent contribution of equity capital to the Issuer (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment shall be excluded from clause (C)(2) of Section 4.07(a);

 

(iii)                   the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Issuer or any Subsidiary Guarantor that is contractually subordinated to the Notes or to any Note Guarantee with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness, or from the

 

72

 

substantially concurrent sale (other than to a Subsidiary of the Issuer) of, Equity Interests of the Issuer (other than Disqualified Stock) or from the substantially concurrent contribution of equity capital to the Issuer (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from clause (iii)(B) of Section 4.07(a);

 

(iv)                  the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Issuer or any Restricted Subsidiary of the Issuer which Disqualified Stock was issued after the Issue Date in accordance with Section 4.09;

 

(v)                     the repurchase, redemption or other acquisition or retirement for value of Disqualified Stock of the Issuer or any Restricted Subsidiary of the Issuer made by exchange for, or out of the proceeds of the substantially concurrent sale of Replacement Preferred Stock that is permitted to be incurred pursuant to Section 4.09;

 

(vi)                  the payment of any dividend (or any similar distribution) by a Restricted Subsidiary of the Issuer to the holders of its Equity Interests on a pro rata basis;

 

(vii)               the purchase, redemption or other acquisition or retirement for value of shares of Capital Stock of a Qualified Restricted Subsidiary owned by a Strategic Investor if such purchase, redemption or other acquisition or retirement for value is made for consideration not in excess of the Fair Market Value of such Capital Stock;

 

(viii)            the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Restricted Subsidiary of the Issuer held by any current or former officer, director, employee or consultant (or Affiliates (other than Crestview Partners, L.P. and the Co-Investors) of the foregoing) of the Issuer or any of its Restricted Subsidiaries, and any dividend payment or other distribution by the Issuer or a Restricted Subsidiary to Holdings or any other direct or indirect parent holding company of the Issuer utilized for the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holdings or such other direct or indirect parent holding company held by any current or former officer, director, employee or consultant of the Issuer or any of its Restricted Subsidiaries or Holdings or such other parent holding company, in each case, pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement or benefit plan or other agreement of any kind; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in any fiscal year (it being understood, however, that unused amounts permitted to be paid pursuant to this proviso are available to be carried over to

 

73

 

subsequent fiscal years); provided, further, that such amount in any fiscal year may be further increased by an amount not to exceed:

 

(A)                the net cash proceeds from the sale of Equity Interests of the Issuer (other than Disqualified Stock) and, to the extent contributed to the Issuer as equity capital (other than Disqualified Stock), Equity Interests of Holdings or any other direct or indirect parent company of the Issuer, in each case to members of management, directors or consultants of the Issuer, any of its Subsidiaries, Holdings or any other direct or indirect parent company of the Issuer that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clause (iii)(B) of Section 4.07(a) (and, to the extent utilized pursuant to this clause (viii), such amount will be excluded from clause (iii)(B) of Section 4.07(a)), and excluding Excluded Contributions, plus

 

(B)                  the cash proceeds of key man life insurance policies received by the Issuer and its Restricted Subsidiaries after the Issue Date, less

 

(C)                  the amount of any Restricted Payments made since the Issue Date in accordance with clauses (A) and (B) of this clause (viii);

 

and provided, further, that cancellation of Indebtedness owing to the Issuer or any Restricted Subsidiary from members of management of the Issuer, any of the Issuer’s direct or indirect parent companies or any of the Issuer’s Restricted Subsidiaries in connection with a repurchase of Equity Interests of the Issuer or any of its direct or indirect parent companies will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Indenture;

 

(ix)                    the repurchase of Equity Interests deemed to occur upon the exercise of options, rights or warrants to the extent such Equity Interests represent a portion of the exercise price of those options, rights or warrants;

 

(x)                       the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of the Issuer or any Subsidiary Guarantor that is contractually subordinated to the Notes or to any Note Guarantee with any Excess Proceeds that remain after consummation of an Asset Sale Offer;

 

74

 

(xi)                    after the occurrence of a Change of Control and within 60 days after the completion of the offer to repurchase the Senior Secured Notes pursuant to the Senior Secured Indenture (including the purchase of the Senior Secured Notes tendered), any purchase or redemption of Indebtedness of the Issuer or any Subsidiary Guarantor that is contractually subordinated to the Senior Secured Notes or to any Senior Secured Note Guarantee required pursuant to the terms thereof as a result of such Change of Control at a purchase or redemption price not to exceed 101% of the outstanding principal amount thereof, plus any accrued and unpaid interest;

 

(xii)                 cash payments in lieu of fractional shares issuable as dividends on preferred stock or upon the conversion of any preferred stock or convertible debt securities of the Issuer or any of its Restricted Subsidiaries;

 

(xiii)              Permitted Payments to Parent;

 

(xiv)             so long as no Default has occurred and is continuing or would be caused thereby, the payment:

 

(A)                  by the Issuer or any Restricted Subsidiary to Holdings or any other direct or indirect parent of the Issuer, which payment is used by the Person receiving such payment, following the first initial public offering of common Equity Interests by such Person, to pay dividends of up to 6% per annum of the net proceeds received by such Person in such public offering (or any subsequent public offering of common Equity Interests of such Person) that are contributed to the Issuer as equity capital (other than Disqualified Stock), or

 

(B)                    by the Issuer, following the first initial public offering of common Equity Interests by the Issuer, to pay dividends of up to 6% per annum of the net proceeds received by or contributed to the Issuer in such public offering (or any subsequent public offering of common Equity Interests by the Issuer)

 

(excluding, in the case of both clause (A) and clause (B), public offerings of common Equity Interests registered on Form S-8 and any other public sale to the extent the proceeds thereof are Excluded Contributions);

 

(xv)                Investments that are made with Excluded Contributions;

 

(xvi)             distributions or payments of Receivables Fees and any other payments in connection with a Qualified Receivables Transaction;

 

75

 

(xvii)          payment of fees and reimbursement of other expenses to the Permitted Holders in connection with the Transactions as described in the Senior Secured Offering Memorandum under the caption “Certain Relationships and Related Party Transactions” or dividends to any direct or indirect parent of the Issuer to fund such payments;

 

(xviii)       all payments made or to be made in connection with the Transactions as set forth in the Senior Secured Offering Memorandum;

 

(xix)               so long as no Default has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate amount taken together with all other Restricted Payments made pursuant to this clause (xix) not to exceed the greater of (A) $25.0 million and (B) 3.0% of Total Assets at the time made; and

 

(xx)                  the distribution, dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary by Unrestricted Subsidiaries (other than Unrestricted Subsidiaries, the primary assets of which (A) are cash and/or Cash Equivalents or (B) were contributed to such Unrestricted Subsidiary in anticipation of such distribution, dividend or other payment, as determined in good faith by the Issuer).

 

(c)                        The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Issuer or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this Section 4.07 shall be, if the Fair Market Value thereof exceeds $20.0 million, determined by the Board of Directors of the Issuer, whose resolution with respect thereto shall be delivered to the Trustee.

 

For purposes of determining compliance with the provisions of this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the types of Restricted Payments described in the above clauses, the Issuer, in its sole discretion, may order and classify, and from time to time may reorder and reclassify, such Restricted Payment, if it would have been permitted at the time such Restricted Payment was made and at the time of any such reclassification.

 

Section 4.08.  Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.  (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

 

76

 

(i)                         pay dividends or make any other distributions on its Capital Stock to the Issuer or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to the Issuer or any of its Restricted Subsidiaries;

 

(ii)                      make loans or advances to the Issuer or any of its Restricted Subsidiaries; or

 

(iii)                   sell, lease or transfer any of its properties or assets to the Issuer or any of its Restricted Subsidiaries.

 

(b)                       Section 4.08(a) shall not apply to encumbrances or restrictions existing under or by reason of:

 

(i)                         agreements governing Existing Indebtedness and the Credit Agreement and agreements governing the Notes and the Note Guarantees as in effect on the Issue Date;

 

(ii)                      the Senior Secured Indenture, the Senior Secured Notes, the Senior Secured Note Guarantees, the Senior Secured Security Documents and the Senior Secured Intercreditor Agreement;

 

(iii)                   applicable law, rule, regulation or order, including any requirement of any governmental healthcare programs;

 

(iv)                  any instrument or agreement governing Indebtedness or Capital Stock of a Restricted Subsidiary acquired by the Issuer or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or any of its Subsidiaries, or the property or assets of the Person or any of its Subsidiaries, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

 

(v)                     customary non-assignment provisions in contracts, leases, subleases, licenses and sublicenses entered into in the ordinary course of business;

 

(vi)                  customary restrictions in leases (including capital leases), security agreements or mortgages or other purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property purchased or leased of the nature described in clause (iii) of Section 4.08(a);

 

77

 

(vii)               any agreement for the sale or other disposition of all or substantially all the Capital Stock or the assets of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the sale or other disposition;

 

(viii)            any instrument or agreement governing Permitted Refinancing Indebtedness; provided that the restrictions contained therein are not materially more restrictive (as determined in good faith by the Issuer), taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

(ix)                    Liens permitted to be incurred under Section 4.12 of this Indenture that limit the right of the debtor to dispose of the assets subject to such Liens;

 

(x)                       provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements;

 

(xi)                    restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

 

(xii)                 customary provisions imposed on the transfer of copyrighted or patented materials;

 

(xiii)              customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of the Issuer or any Restricted Subsidiary;

 

(xiv)             customary provisions in connection with a Qualified Receivables Transaction;

 

(xv)                contracts entered into in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Issuer or any Restricted Subsidiary of the Issuer in any manner material to the Issuer or any Restricted Subsidiary of the Issuer;

 

(xvi)             restrictions on the transfer of property or assets required by any regulatory authority having jurisdiction over the Issuer or any Restricted Subsidiary of the Issuer or any of their businesses;

 

(xvii)          any instrument or agreement governing Indebtedness or preferred stock of any Restricted Subsidiary that is incurred or issued

 

78

 

subsequent to the Issue Date and not in violation of Section 4.09; provided that the Issuer’s Board of Directors determines in good faith that restrictions are not reasonably likely to have a materially adverse effect on the Issuer’s and/or Guarantors’ ability to make principal and interest payments on the Notes;

 

(xviii)       restrictions in Management Agreements that require the payment of management fees to the Issuer or one of its Restricted Subsidiaries prior to payment of dividends or distributions;

 

(xix)               customary provisions in joint venture and other similar agreements, including agreements related to the ownership and operation of surgical facilities, relating solely to such joint venture or facilities or the Persons who own Equity Interests therein; and

 

(xx)                  any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the Indebtedness, preferred stock, Liens, agreements, contracts, licenses, leases, subleases, instruments or obligations referred to in clauses (i), (ii), (iv) through (xv) and (xvii) above; provided, however, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, (as determined by the Issuer in good faith) than those restrictions contained in the Indebtedness, preferred stock, Liens, agreements, contracts, licenses, leases, subleases, instruments or obligations referred to in clauses (i), (ii), (iv) through (xv) and (xvii) above, as applicable prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

 

For purposes of determining compliance with this covenant, (A) the priority of any preferred stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (B) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary of the Issuer to other Indebtedness incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

 

Section 4.09. Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.  (a)  The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred

 

79

 

stock, if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided that the maximum amount of Indebtedness that may be incurred by Non-Guarantor Subsidiaries under this clause (a) shall be $15.0 million outstanding at any time.

 

(b)                       Section 4.09(a) shall not prohibit the incurrence of any of the following items of Indebtedness or the issuance of any of the following items of Disqualified Stock or preferred stock (collectively, “Permitted Debt”):

 

(i)                         the incurrence by the Issuer and/or any Restricted Subsidiary of Indebtedness under the Credit Agreement and other Credit Facilities entered into after the date of the Credit Agreement in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed (A) the greater of (1) $75.0 million and (2) an amount equal to 100% of Consolidated Adjusted EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of any incurrence under this clause (i); less (B) the aggregate amount of all Net Proceeds of Asset Sales of the Issuer or any Restricted Subsidiary applied since the Issue Date to repay any Indebtedness under a Credit Facility pursuant to Section 4.10 of the Senior Secured Indenture;

 

(ii)                      the incurrence by the Issuer and its Restricted Subsidiaries of the Existing Indebtedness outstanding on the Issue Date;

 

(iii)                   the incurrence by the Issuer and the Guarantors of Indebtedness represented by the Senior Secured Notes and the Notes to be issued on the Issue Date, and the related Senior Secured Note Guarantees and Note Guarantees (including, for the avoidance of doubt, any increase in such Indebtedness due to the accretion of the principal amount thereof pursuant to the terms thereof), the Senior Secured Exchange Notes and the related Guarantees thereof to be issued pursuant to the Senior Secured Registration Rights Agreement;

 

(iv)                  the incurrence or issuance by the Issuer or any of its Restricted Subsidiaries of (A) Indebtedness, Disqualified Stock or preferred stock of Persons that are acquired by the Issuer, a Guarantor or any Qualified Restricted Subsidiary (including by way of merger or consolidation) in accordance with the terms of this Indenture or incurred by the Issuer or any Restricted Subsidiary to finance such acquisition or

 

80

 

merger or (B) Acquired Debt or Indebtedness (including Capital Lease Obligations), Disqualified Stock or preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price or cost of design, construction, lease, installation or improvement of property (real or personal), plant or equipment used or useful in a Permitted Business (whether through their direct purchase or purchase of Capital Stock of a Person owning such property); provided that aggregate principal amount under this clause (iv), including all Permitted Refinancing Indebtedness and Replacement Preferred Stock incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (iv), shall not exceed $60.0 million at any time outstanding;

 

(v)                     the incurrence by the Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness or Replacement Preferred Stock in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) or any Disqualified Stock or preferred stock that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (ii), (iii), (v), (xviii) or (xix) of this Section 4.09(b);

 

(vi)                  the incurrence by the Issuer, any Guarantors or any Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer, Guarantors and any Restricted Subsidiaries; provided, however, that:

 

(A)                if the Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Issuer or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Issuer or the Note Guarantee, in the case of a Guarantor, except to the extent such subordination would violate any applicable law, rule or regulation; and

 

(B)                  (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Qualified Restricted Subsidiary of the Issuer and (2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Qualified Restricted Subsidiary of the Issuer, shall be deemed, in each case, to constitute a new incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, which new incurrence is not permitted by this clause (vi);

 

81

 

 

(vii)               the issuance by any Restricted Subsidiaries to the Issuer, Guarantors or to any of their Restricted Subsidiaries of shares of preferred stock; provided, however, that:

 

(A)                            any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Issuer, or Guarantor or a Restricted Subsidiary of the Issuer; and

 

(B)                              any sale or other transfer of any such preferred stock to a Person that is not either the Issuer, a Guarantor or a Restricted Subsidiary of the Issuer,

 

will be deemed, in each case, to constitute a new issuance of such preferred stock by such Restricted Subsidiary which new issuance is not permitted by this clause (vii);

 

(viii)            the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations for the purpose of limiting interest rate, currency or commodity risk;

 

(ix)                    the Guarantee: (A) by the Issuer or any of the Guarantors of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated to the Notes, then the Guarantee shall be subordinated to the same extent as the Indebtedness guaranteed; and (B) by any Non-Guarantor Subsidiary of Indebtedness of a Non-Guarantor Subsidiary;

 

(x)                       the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, letters of credit, performance bonds, surety bonds, appeal bonds or other similar bonds in the ordinary course of business;

 

(xi)                    the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five Business Days;

 

(xii)                 the incurrence of Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection

 

82

 

with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or any Restricted Subsidiary;

 

(xiii)              Indebtedness of the Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to any Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;

 

(xiv)             the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business;

 

(xv)                Indebtedness of the Issuer or a Guarantor that is unsecured or secured by a Lien junior in priority to the Lien securing the Senior Secured Notes in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred pursuant to this clause (xv), not to exceed $115.0 million;

 

(xvi)             Indebtedness of the Issuer or a Restricted Subsidiary in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for ten Business Days or less;

 

(xvii)          the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction;

 

(xviii)       the incurrence or issuance by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or liquidation preference, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness and all Replacement Preferred Stock incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness, Disqualified Stock and preferred stock incurred or issued pursuant to this clause (xviii), not to exceed $25.0 million;

 

(xix)               Indebtedness in respect of promissory notes issued to physicians, consultants, employees or directors or former employees, consultants or directors in connection with repurchases of Equity Interests permitted by Section 4.07(b)(viii);

 

(xx)                  Guarantees by the Issuer or any Guarantor of Indebtedness of a Person permitted by clause (15) of the definition of “Permitted Investments”; and

 

(xxi)               Indebtedness representing deferred compensation to employees of the Issuer and the Restricted Subsidiaries incurred in the ordinary course of business.

 

83

 

For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xxi) above, or is entitled to be incurred pursuant to Section 4.09(a), the Issuer shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09 except that Indebtedness under the Credit Agreement outstanding on the Issue Date will be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of this Section 4.09(b). The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.09.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(1)                                  the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(2)                                  the principal amount of the Indebtedness, in the case of any other Indebtedness; and

 

(3)                                  in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

 

(A)                              the Fair Market Value of such assets at the date of determination; and

 

(B)                                the amount of the Indebtedness of the other Person.

 

Section 4.10.  Asset Sales.  (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(i)                         the Issuer (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of;

 

(ii)                      if such Asset Sale involves the disposition of Collateral, the Issuer or such Restricted Subsidiary has complied with the provision of the Senior Secured Indenture and the Senior Secured Security Documents; and

 

84

 

(iii)                   at least 75% of the consideration received in the Asset Sale by the Issuer or such Restricted Subsidiary is in the form of cash. For purposes of this paragraph (iii), each of the following shall be deemed to be cash:

 

(A)                            Cash Equivalents;

 

(B)                              any liabilities (as shown on the Issuer’s most recent consolidated balance sheet) of the Issuer or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to an agreement that releases the Issuer or such Restricted Subsidiary from further liability;

 

(C)                              any securities, notes or other obligations received by the Issuer or any such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days of receipt, to the extent of the cash received in that conversion;

 

(D)                             (1) any Designated Noncash Consideration received by the Issuer or a Restricted Subsidiary in connection with the sale or contribution of assets by the Issuer or a Restricted Subsidiary to a joint venture with a Strategic Investor; provided, however, that in the event such Designated Noncash Consideration is an Investment (other than in the form of Indebtedness), such Designated Noncash Consideration shall be deemed to have been acquired and consequently reduce amounts available under clause (15) or (17) of the definition of “Permitted Investments,” as determined by the Issuer and (2) any Designated Noncash Consideration the Fair Market Value of which, when taken together with all other Designated Noncash Consideration received pursuant to this clause (2) (and not subsequently converted into Cash Equivalents that are treated as Net Proceeds of an Asset Sale), does not exceed the greater of $20.0 million and 2.5% of Total Assets at the time of receipt since the Issue Date, with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value; and

 

(E)                               any assets of, or any Capital Stock of, another Permitted Business, any Investments pursuant to clause (15) or (17) of the definition of “Permitted Investments” or any Additional Assets.

 

85

 

Notwithstanding the foregoing, the 75% requirement referred to in clause (2) above shall not apply to any Asset Sale in which the cash or Cash Equivalent portion of the consideration received therefrom, determined in accordance with the foregoing provision, is equal to or greater than what the after-tax proceeds would have been had such Asset Sale complied with the aforementioned 75% requirement.

 

Section 4.11.  Transactions with Affiliates. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of the Issuer involving aggregate consideration in excess of $5.0 million (each, an “Affiliate Transaction”), unless:

 

(i)                                     the Affiliate Transaction is on terms that, taken as a whole, are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and

 

(ii)                                  the Issuer delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, an Officer’s Certificate certifying that such Affiliate Transaction complies with clause (i) of this Section 4.11(a) and that such Affiliate Transaction has been approved by a majority of the members of the Board of Directors of the Issuer, together with a certified copy of the resolutions of the Board of Directors of the Issuer approving such Affiliate Transaction or Affiliate Transactions.

 

(b)                       The following items shall not be deemed to be Affiliate Transactions and, therefore, shall not be subject to the provisions of Section 4.11(a):

 

(i)                         any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto;

 

(ii)                      transactions between or among the Issuer and/or its Restricted Subsidiaries;

 

(iii)                   transactions with a Person (other than an Unrestricted Subsidiary of the Issuer) that is an Affiliate of the Issuer solely because the Issuer owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

 

(iv)                  payment of reasonable directors’ fees;

 

86

 

(v)                     any issuance of Equity Interests (other than Disqualified Stock) of the Issuer to Affiliates of the Issuer;

 

(vi)                  Permitted Investments or Restricted Payments that do not violate Section 4.07;

 

(vii)               payment of fees and the reimbursement of other expenses to the Permitted Holders in connection with the Transactions and as described in the Senior Secured Offering Memorandum under the caption “Certain Relationships and Related Party Transactions”;

 

(viii)            payments by the Issuer or any of its Restricted Subsidiaries to Crestview Partners GP, L.P. and/or any of its Affiliates for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are approved by the majority of the disinterested members of the Board of Directors of the Issuer in good faith;

 

(ix)                    loans (or cancellation of loans) or advances to employees in the ordinary course of business;

 

(x)                       transactions with joint ventures, Unrestricted Subsidiaries, customers, suppliers, contractors, joint venture partners (including without limitation, physicians) or purchasers or sellers of goods or services, in each case which are in the ordinary course of business (including, without limitation, pursuant to joint venture agreements) and otherwise in compliance with the terms of this Indenture;

 

(xi)                    the existence of, or the performance by the Issuer or any Restricted Subsidiary of their obligations, if any, or obligations of Holdings under the terms of, any subscription, registration rights or stockholders agreement, partnership agreement, limited liability company agreement or similar agreement to which Holdings, the Issuer or any Restricted Subsidiary is a party as of the Issue Date and any similar agreements which the Issuer, any Restricted Subsidiary, Holdings or any other direct or indirect parent company of the Issuer may enter into thereafter; provided, however, that the entering into by the Issuer or any Restricted Subsidiary or the performance by the Issuer or any Restricted Subsidiary of obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date will only be permitted by this clause (xi) to the extent that the terms of any such amendment or new agreement, taken as a whole, are not materially disadvantageous to the holders of the Notes, as determined in good faith by the Board of Directors, chief executive officer or chief financial officer of the Issuer;

 

87

 

(xii)                 the Transactions, including all payments made or to be made in connection with the Transactions as described in the Senior Secured Offering Memorandum;

 

(xiii)              any transaction relating to a Qualified Receivables Transaction;

 

(xiv)             the entering into of any tax sharing agreement or arrangement and any Permitted Payments to Parent;

 

(xv)                any management, consulting, monitoring, financial advisory, financing, underwriting or placement services or any other investment banking, banking or similar services involving the Issuer and any of its Restricted Subsidiaries (including without limitation any payments in cash, Equity Interests or other consideration made by the Issuer or any of its Restricted Subsidiaries in connection therewith) on the one hand and the Permitted Holders on the other hand (including the Sponsor Management Agreement as in effect on the Issue Date and termination payments in respect thereof), which services (and payments and other transactions in connection therewith) are approved as fair to the Issuer or such Restricted Subsidiary by a majority of the members of the Board of Directors of the Issuer in good faith;

 

(xvi)             the issuance of Equity Interests (other than Disqualified Stock) in the Issuer or any Restricted Subsidiary of the Issuer for compensation purposes;

 

(xvii)          any lease or sublease entered into between the Issuer or any Restricted Subsidiary, as lessee, and any Affiliate of the Issuer, as lessor or sublessor, which is approved by a majority of the disinterested members of the Board of Directors of the Issuer in good faith;

 

(xviii)       intellectual property licenses in the ordinary course of business;

 

(xix)               Existing Indebtedness and any other obligations pursuant to an agreement existing on the Issue Date as described in the Senior Secured Offering Memorandum, including any amendment thereto (so long as such amendment is not disadvantageous to the Holders in any material respect); and

 

(xx)                  transactions in which the Issuer or any Restricted Subsidiary delivers to the Trustee a letter from an accounting, appraisal or investment banking firm of national standing stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view and which are approved by a majority of the disinterested members of the Board of Directors of the Issuer in good faith.

 

88

 

Section 4.12.  Liens.  The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind, on or with respect to the Collateral except Permitted Collateral Liens.  The Issuer shall not, and shall not permit any of the Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien (other than Permitted Liens) of any kind securing Indebtedness upon any of their property or assets (other than with respect to property or assets constituting Collateral), now owned or hereafter acquired, unless all payments due under this Indenture and the Notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien.

 

Section 4.13.  Restriction on Optional Repurchase of the Notes and the 2015 Notes. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, make any optional repurchase, redemption or other optional acquisition or retirement for value (each an “Optional Repurchase”) of the Notes or the 2015 Notes, as applicable; provided, however, that the Issuer and its Restricted Subsidiaries may make an Optional Repurchase of the Notes or the 2015 Notes so long as after giving effect to such Optional Repurchase the Consolidated Secured Debt Ratio of the Issuer and its Restricted Subsidiaries shall be equal to or less than 4.5 to 1.0 for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such Optional Repurchase; provided, further, that for the purposes of determining compliance with this covenant only, the amount of Consolidated Total Indebtedness used to calculate the Consolidated Secured Debt Ratio will not subtract the aggregate amount of cash and Cash Equivalents of the Issuer and its Restricted Subsidiaries on a consolidated basis.

 

(b)                       The preceding Section 4.13(a) shall not prohibit:

 

(i)                         the Optional Repurchase of the Notes or the 2015 Notes made in exchange for, or out of the proceeds of, a substantially concurrent sale of, Permitted Refinancing Indebtedness; or

 

(ii)                      the purchase, repurchase, redemption, defeasance or other acquisition or retirement of any Notes or 2015 Notes purchased in anticipation of satisfying a sinking fund obligation, principal installment or payment at final maturity, in each case within one year of the maturity of the Notes or the 2015 Notes, as applicable.

 

(c)                        For the avoidance of doubt, nothing in this Section 4.13 shall prohibit the repurchase, redemption or other acquisition or retirement of value of the Notes or the 2015 Notes as required by the terms of such notes, including any repurchase required upon an asset sale or change of control as defined in this Indenture or the indenture governing the 2015 Notes, as applicable.

 

89

 

Section 4.14.  Corporate Existence.  Subject to Article 5, the Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence in accordance with its organizational documents (as the same may be amended from time to time).

 

Section 4.15.  [Reserved].

 

Section 4.16.  No Layering of Debt.  The Issuer shall not, and shall not permit any Guarantors to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of the Issuer or of such Guarantors, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Note Guarantee of such Guarantors, to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of the Issuer or such Guarantors, as the case may be.

 

For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Issuer or any Guarantors solely by virtue of being unsecured or secured by a junior priority Lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them.

 

Section 4.17.  Designation of Restricted and Unrestricted Subsidiaries.  The Board of Directors of the Issuer may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by the Issuer and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary shall be deemed to be an Investment made as of the time of the designation and shall reduce the amount available for Restricted Payments under Section 4.07 or under one or more clauses of the definition of Permitted Investments, as determined by the Issuer. That designation shall only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

Any designation of a Subsidiary of the Issuer as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Issuer as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section

 

90

 

4.09, the Issuer shall be in Default of Section 4.09. The Board of Directors of the Issuer may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Issuer; provided that such designation shall be deemed to be an incurrence of Indebtedness and Liens by a Restricted Subsidiary of the Issuer of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation shall only be permitted if (a) such Indebtedness and Liens are permitted under Sections 4.09 and 4.12 and (b) such designation would not cause a Default or Event of Default.

 

Section 4.18.  Payments for Consent.  The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture, the Notes or the Note Guarantees unless such consideration is offered to be paid and is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

 

Section 4.19.  Additional Note Guarantees.  If the Issuer or any of its Restricted Subsidiaries, acquires or creates another Subsidiary, other than a Non-Guarantor Subsidiary, after the Issue Date that guarantees Indebtedness under the Credit Agreement, the Senior Secured Notes, the 2015 Notes or any other Indebtedness of the Issuer or another Guarantor or if any Non-Guarantor Subsidiary ceases to be a Non-Guarantor Subsidiary, then that newly acquired or created Subsidiary or existing Subsidiary shall become a Guarantor and execute a supplemental indenture substantially in the form attached as Exhibit E and deliver an Opinion of Counsel to the Trustee within 30 Business Days of the date on which it was acquired or created.

 

Section 4.20.  Distributions by Qualified Restricted Subsidiaries.  Except to the extent restricted pursuant to any Permitted Payment Restrictions, the Issuer shall, and shall cause each Qualified Restricted Subsidiary to declare and pay regular monthly, quarterly, semiannual or annual dividends or distributions to the holders of its Capital Stock in an amount equal to substantially all of the available cash flow of such Restricted Subsidiary for such period as determined in good faith by the board of directors, board of governors or such other individuals performing similar functions, subject to fiduciary duties applicable to such board or individual and such ordinary and customary reserves and other amounts as, in the good faith judgment of such individuals, may be necessary so that the business of such Restricted Subsidiary may be properly and advantageously conducted at all times, including amounts necessary for operations, capital expenditures, debt service and other needs.

 

If, at any time, any Restricted Subsidiary would fail to meet the requirements set forth in the definition of “Qualified Restricted Subsidiary,” it will thereafter cease to be a Qualified Restricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred

 

91

 

by a Restricted Subsidiary that is not a Qualified Restricted Subsidiary as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09, the Issuer will be in Default of Section 4.09. The Board of Directors of the Issuer may at any time designate any Restricted Subsidiary not to be a Qualified Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by such Restricted Subsidiary of any outstanding Indebtedness of such Restricted Subsidiary, and such designation will only be permitted if (a) such Indebtedness is permitted under Section 4.09 and (b) no Default or Event of Default would be in existence following such designation. In the event (x) a Restricted Subsidiary fails to meet the requirements to be a Qualified Restricted Subsidiary or (y) the Board of Directors designates a Qualified Restricted Subsidiary not to be a Qualified Restricted Subsidiary, then all Investments in such Subsidiary since the Issue Date shall be deemed to have been acquired and consequently reduce the amount available for Restricted Payments under Section 4.07 or the amount available for Restricted Investments under clause (15) or (17) of the definition of “Permitted Investments” as determined by the Issuer. As of the Issue Date, all of the Issuer’s Restricted Subsidiaries are Qualified Restricted Subsidiaries.

 

ARTICLE 5
 SUCCESSORS

 

Section 5.01.  Merger, Consolidation, or Sale of Assets.  (a) The Issuer shall not, directly or indirectly: (x) consolidate or merge with or into another Person (whether or not the Issuer is the surviving corporation); or (y) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Issuer and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless:

 

(i)                         either:

 

(A)                            the Issuer is the surviving entity; or

 

(B)                              the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or to which such sale, assignment, transfer, conveyance or other disposition has been made is an entity organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

 

(ii)                      the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of the Issuer under the Notes, this Indenture and the Registration Rights Agreement pursuant to a supplemental indenture and other agreements reasonably satisfactory to the Trustee;

 

92

 

provided, however, that at all times, a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia must be a co-issuer or the issuer of the Notes if such surviving Person is not a corporation;

 

(iii)                   immediately after such transaction, no Default or Event of Default exists;

 

(iv)                  the Issuer or the Person formed by or surviving any such consolidation or merger (if other than the Issuer), or to which such sale, assignment, transfer, conveyance or other disposition has been made would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period:

 

(A)                            be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) or

 

(B)                              have a Fixed Charge Coverage Ratio that is equal to or greater than the actual Fixed Charge Coverage Ratio of the Issuer immediately prior to such transaction; and

 

(v)                     the Issuer shall have delivered to the Trustee an Officers’ Certificate stating that such consolidation, merger, amalgamation or transfer and such supplemental indenture, if any, comply with this Indenture and an Opinion of Counsel in a customary form including customary qualifications to the effect that such amendments, supplements or other instruments are enforceable.

 

In addition, the Issuer shall not, directly or indirectly, lease all or substantially all of the properties and assets of it and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.

 

(b)                       Clauses (iii) and (iv) of Section 5.01(a) shall not apply to:

 

(i)                         a merger of the Issuer with an Affiliate solely for the purpose of reincorporating the Issuer in another jurisdiction;

 

(ii)                      any consolidation or merger, or any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among the Issuer and its Subsidiary Guarantors;

 

(iii)                   the consolidation or merger, or sale, assignment, transfer, conveyance, lease or other disposition of all or part of its assets, by any Restricted Subsidiary to the Issuer or a Subsidiary Guarantor; and

 

93

 

 

(iv)                  transfers of accounts receivable and related assets of the type specified in the definition of Qualified Receivables Transaction (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Transaction.

 

Section 5.02.  Successor Corporation Substituted.  Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Issuer in a transaction that is subject to, and that complies with the provisions of, Section 5.01, the successor Person formed by such consolidation or into or with which the Issuer is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “Issuer” shall refer instead to the successor Person and not to the Issuer), and may exercise every right and power of the Issuer under this Indenture with the same effect as if such successor Person had been named as the Issuer herein, and when a successor Person assumes all obligations of its predecessor under this Indenture or the Notes, the predecessor shall be released from those obligations; provided, however, that in the case of a transfer by lease, the predecessor shall not be released from those obligations.

 

ARTICLE 6
 DEFAULTS AND REMEDIES

 

Section 6.01.  Events of Default.  Each of the following is an “Event of Default”:

 

(a)                        default in the payment when due (at the Maturity Date, upon redemption, upon acceleration or otherwise) of the principal of, or premium, if any, on, or any accrued and non-capitalized interest (including Additional Interest, if any) on, the Notes;

 

(b)                       failure to deliver, within the period specified in Section 10.02, shares of Common Stock and any other securities or property, together with cash in lieu of any fractional shares, due upon exchange of the Notes;

 

(c)                        failure by the Issuer or any of its Restricted Subsidiaries to comply with the provisions of Section 5.01 hereof;

 

(d)                       failure by the Issuer or any of its Restricted Subsidiaries for 60 days after notice to the Issuer by the Trustee or the Holders of at least 25% in aggregate Initial Principal Amount of the Notes then outstanding to comply with any of the other agreements or covenants in this Indenture or the Registration Rights Agreement;

 

94

 

(e)                        default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Issuer or any of its Significant Subsidiaries (or the payment of which is guaranteed by the Issuer or any of its Significant Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default:

 

(i)                         is caused by a failure to pay principal at the final Stated Maturity of such Indebtedness (a “Payment Default”); or

 

(ii)                      results in the acceleration of such Indebtedness prior to its express maturity; and, in each case, the principal amount (or accreted value, as applicable) of such Indebtedness, together with the principal amount (or accreted value, as applicable) of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more;

 

(f)                          with respect to any judgment or decree for the payment of money (net of any amount covered by insurance issued by a reputable and creditworthy insurer that has not contested coverage or reserved rights with respect to an underlying claim) in excess of $15.0 million or its foreign currency equivalent against the Issuer or any Significant Subsidiary, the failure by the Issuer or such Significant Subsidiary, as applicable, to pay such judgment or decree, which judgment or decree has remained outstanding for a period of 60 days after such judgment or decree became final and nonappealable without being paid, discharged, waived or stayed;

 

(g)                       except as permitted by this Indenture, any Note Guarantee of Holdings or any Subsidiary Guarantor that is a Significant Subsidiary is declared to be unenforceable or invalid by any final and nonappealable judgment or decree or ceases for any reason to be in full force and effect, or any Guarantor that is a Significant Subsidiary or any Person acting on behalf of any Guarantor that is a Significant Subsidiary denies or disaffirms its obligations in writing under its Note Guarantee and such Default continues for 10 days after notice thereof is delivered to the Issuer by the Trustee or the Holders of at least 25% in aggregate Initial Principal Amount of the Notes then outstanding voting as a single class;

 

(h)                       the Issuer or any of the Restricted Subsidiaries that is a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

 

(i)                         commences a voluntary case;

 

(ii)                      consents to the entry of an order for relief against it in an involuntary case;

 

(iii)                   consents to the appointment of a custodian of it or for all or substantially all of its property;

 

95

 

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

 

(v)                     generally is not paying its debts as they become due; and

 

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

 

(i)                         is for relief against the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary in an involuntary case;

 

(ii)                      appoints a custodian of the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary for all or substantially all of the property of the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary; or

 

(iii)                   orders the liquidation of the Issuer or any of the Issuer’s Restricted Subsidiaries that is a Significant Subsidiary; and the order or decree remains unstayed and in effect for 60 consecutive days.

 

Section 6.02.  Acceleration.  In the case of an Event of Default arising under clause (h) or (i) Section 6.01 with respect to the Issuer, all outstanding Notes shall become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate Initial Principal Amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.

 

In the event of any Event of Default specified in clause (e) of Section 6.01, such Event of Default and all consequences thereof (excluding any resulting payment default, other than as a result of acceleration of the Notes) shall be annulled, waived and rescinded, automatically and without any action by the Trustee or the Holders, if within 20 days after such Event of Default arose:

 

(i)                         the Indebtedness or Guarantee that is the basis for such Event of Default has been discharged; or

 

(ii)                      holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default; or

 

(iii)                   the default that is the basis for such Event of Default has been cured.

 

Upon any such declaration, the Notes shall become due and payable immediately. The Holders of a majority in aggregate Initial Principal Amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders, rescind an acceleration or waive any existing Default or Event of

 

96

 

Default and its consequences under this Indenture except a continuing Default or Event of Default in the payment of interest or premium or Additional Interest, if any, on, or the principal of, the Notes, or the delivery or payment of any consideration due upon exchange of the Notes.

 

Section 6.03.  Other Remedies.  If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and Additional Interest, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law.

 

Section 6.04.  Waiver of Past Defaults.  Holders of a majority in aggregate Initial Principal Amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default resulting from (a) the payment of the principal of, premium and Additional Interest, if any, or interest on, the Notes (including in connection with a redemption), (b) a failure to pay or deliver, as the case may be, the consideration due upon exchange of the Notes pursuant to Article 10 or (c) failure to comply with any other covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each outstanding Note affected; provided, however, that the Holders of a majority in aggregate Initial Principal Amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. In case of any such waiver, the Issuer, the Trustee and the Holders shall be restored to their former positions and rights hereunder and under the Notes, respectively.

 

Section 6.05.  Control by Majority.  Holders of a majority in Initial Principal Amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders or that may involve the Trustee in personal liability. Prior to taking any action under this Indenture, the Trustee shall be entitled to reasonable indemnification against all losses and expenses caused by taking or not taking such action.

 

97

 

Section 6.06.  Limitation on Suits.  Except to enforce the right to receive payment or principal, premium, if any, or interest or Additional Interest, if any, or the right to receive payment or delivery, as the case may be, of the consideration due upon exchange of Notes pursuant to Article 10, when due, a Holder may pursue a remedy with respect to this Indenture or the Notes only if:

 

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

 

(2)                                  Holders of at least 25% in aggregate Initial Principal Amount of the then outstanding Notes have requested the Trustee to pursue the remedy;

 

(3)                                  such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

 

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

 

(5)                                  Holders of a majority in aggregate Initial Principal Amount of the then outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

 

Section 6.07.  Rights of Holders to Receive Payment.  Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with a redemption), or the right to receive payment or delivery, as the case may be, of the consideration due upon exchange of Notes pursuant to Article 10, or to bring suit for the enforcement of any such payment or delivery, as the case may be, on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

Section 6.08.  Collection Suit by Trustee.  If an Event of Default specified in Section 6.01(a) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuer and each Guarantor for the whole amount of principal of, premium and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09.  Trustee May File Proofs of Claim.  The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any

 

98

 

judicial proceedings relative to the Issuer (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. The Trustee may participate as a member of any official committee of creditors appointed in the matters as it deems necessary or advisable.

 

Section 6.10.  Priorities.  If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

 

First: to the Trustee, its agents and attorneys for amounts due under Section 7.07, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

Second: to Holders for amounts due and unpaid on the Notes for principal, premium and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Additional Interest, if any, and interest, respectively; and

 

Third: to the Issuer or to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

 

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 a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07, or a suit by Holders of more than 10% in Initial Principal Amount of the then outstanding Notes.

 

99

 

ARTICLE 7

TRUSTEE

 

Section 7.01.  Duties of Trustee.  (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)                       Except during the continuance of an Event of Default:

 

(i)                         the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)                      in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of certificates or opinions specifically required by any provision hereof to be furnished to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

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

 

(i)                         this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

 

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

 

(iii)                   the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

 

(d)                       Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a) and (b) of this Section 7.01.

 

(e)                        No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability if it shall have reasonable grounds to

 

100

 

believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(f)                          The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)                       In the absence of bad faith, gross negligence or willful misconduct on the part of the Trustee, the Trustee shall not be responsible for the application of any money by any Paying Agent other than the Trustee.

 

Section 7.02.  Rights of Trustee.  (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

 

(b)                       Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel of its own selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(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 that it believes to be authorized or within the rights or powers conferred upon it by this Indenture; provided, however, that the Trustee’s conduct does not constitute willful misconduct, bad faith or gross negligence.

 

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

 

(f)                          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 have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

 

(g)                       Except with respect to Section 4.01, the Trustee shall have no duty to inquire as to the performance of the Issuer with respect to the covenants

 

101

 

contained in Article 4. In addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any Default or Event of Default occurring pursuant to Sections 4.01 or 6.01(a) or (ii) any Default or Event of Default of which the Trustee shall have received written notification or obtained actual knowledge.

 

(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.

 

(i)                           The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

 

(j)                           The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate (including any Officer’s Certificate), statement, instrument, opinion (including any Opinion of Counsel), notice, request, direction, consent, order, bond, debenture, or other paper or document.

 

(k)                        The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

 

(l)                           The permissive rights of the trustee to do things enumerated in this Indenture shall not be construed as duties.

 

Section 7.03.  Individual Rights of Trustee.  The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

Section 7.04.  Trustee’s Disclaimer.  The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes or any money paid to the Issuer or upon the Issuer’s direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

 

102

 

Section 7.05.  Notice of Defaults.  If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders a 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, premium or Additional Interest, if any, or interest on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

 

Section 7.06.  Reports by Trustee to Holders of the Notes.  (a) Within 60 days after each July 15 beginning with the July 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313; provided that if no event described in TIA Section 313 has occurred within the twelve months preceding such reporting date, no report need be transmitted. The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

 

(b)                       A copy of each report at the time of its mailing to the Holders shall be mailed by the Trustee to the Issuer and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are listed on any stock exchange or delisted therefrom.

 

Section 7.07.  Compensation and Indemnity.  (a) The Issuer shall pay to the Trustee from time to time reasonable compensation as agreed to between the Issuer and the Trustee for its acceptance of this Indenture and services hereunder. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

(b)                       The Issuer shall indemnify the Trustee against any and all losses, liabilities, claims, damages or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Issuer and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Issuer, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense shall be determined to have been caused by its own gross negligence or willful misconduct. The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the

 

103

 

Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel; provided that the Issuer shall not be required to pay such fees and expenses if it assumes the Trustee’s defense, and, in the Trustee’s reasonable judgment, there is no conflict of interest between the Issuer and the Trustee in connection with such defense. The Issuer shall not be required to pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

 

(c)                        The obligations of the Issuer under this Section 7.07 shall survive the satisfaction and discharge of this Indenture.

 

(d)                       To secure the Issuer’s payment obligations in this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.

 

(e)                        When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(h) and 6.01(i) occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

(f)                          The Trustee shall comply with the provisions of TIA Section 313(b) to the extent applicable.

 

Section 7.08.  Replacement of Trustee.  (a) A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

(b)                       The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuer. The Holders of a majority in Initial Principal Amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuer in writing. The Issuer may remove the Trustee if:

 

(i)                         the Trustee fails to comply with Section 7.10 hereof;

 

(ii)                      the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(iii)                   a custodian or public officer takes charge of the Trustee or its property; or

 

(iv)                  the Trustee becomes incapable of acting.

 

104

 

 

(c)                        If the Trustee resigns or is removed or if a vacancy exists in the office of the Trustee for any reason, the Issuer shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in Initial Principal Amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuer.

 

(d)                       If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, or the Holders of at least 10% in Initial Principal Amount of the then outstanding Notes may petition, at the expense of the Issuer, any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)                        If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)                          A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. 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 the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuer’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.

 

Section 7.09.  Successor Trustee by Merger, etc.  If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee.

 

Section 7.10.  Eligibility; Disqualification.  There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that together with its affiliates has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.

 

This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b).

 

105

 

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

 

ARTICLE 8
 [RESERVED]

 

ARTICLE 9
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01.  Without Consent of Holders.  (a) Notwithstanding Section 9.02 of this Indenture, the Issuer and the Trustee may amend or supplement this Indenture, the Note Guarantees or the Notes without the consent of any Holder of a Note:

 

(i)                                     to cure any ambiguity, defect or inconsistency;

 

(ii)                                  to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(iii)                               to provide for the assumption of the Issuer’s or a Guarantor’s obligations to the Holders and Note Guarantees by a successor to the Issuer pursuant to Article 5 or Section 11.05, respectively, hereof;

 

(iv)                              to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights hereunder of any Holder;

 

(v)                                 to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

 

(vi)                              to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee pursuant to the requirements of Section 7.08;

 

(vii)                           to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the Issue Date;

 

(viii)                        to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes, or to secure the Notes; or

 

106

 

(ix)                                to provide for exchange rights of Holders upon any recapitalization, reclassification or change of Common Stock, a consolidation, merger or combination involving a sale, lease or other transfer to another corporation of the consolidated assets of Holdings and its Subsidiaries substantially as an entirety, or any statutory share exchange.

 

(b)                       Upon the request of the Issuer accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02(b), the Trustee shall join with the Issuer in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

 

Section 9.02.  With Consent of Holders.  (a) Except as provided below in this Section 9.02, the Issuer and the Trustee may amend or supplement this Indenture (including, without limitation, Section 4.10 hereof), the Note Guarantees and the Notes with the consent of the Holders of at least a majority in aggregate Initial Principal Amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a tender offer or exchange offer for the Notes) and, subject to Sections 6.04 and 6.07, any existing Default or Event of Default or compliance with any provision of this Indenture, the Note Guarantees or the Notes may be waived with the consent of the Holders of a majority in aggregate Initial Principal Amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for the Notes).

 

(b)                       Upon the request of the Issuer accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02(b), the Trustee shall join with the Issuer in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

 

(c)                        It is not necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it is sufficient if such consent approves the substance thereof.

 

(d)                       After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Issuer shall mail to the Holders affected thereby a notice

 

107

 

briefly describing the amendment, supplement or waiver. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07, the Holders of a majority in aggregate Initial Principal Amount of the Notes then outstanding, voting as a single class, may waive compliance in a particular instance by the Issuer and the Guarantors with any provision of this Indenture, the Notes, or the Note Guarantees.

 

(e)                        Notwithstanding the foregoing, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

 

(i)                                     reduce the Initial Principal Amount of Notes whose Holders must consent to an amendment, supplement or waiver;

 

(ii)                                  reduce the principal of or change the Stated Maturity of any Note or alter the provisions with respect to the optional redemption of the Notes contained in Article 3 of this Indenture or Section 5 of the Notes (except the notice period contained therein or in Sections 3.01, 3.02 and 3.03);

 

(iii)                               reduce the rate of or change the time for payment of interest, including default interest, on any Note;

 

(iv)                              waive a Default or Event of Default in the payment of principal of, or interest or premium, or Additional Interest, if any, on, the Notes or the payment or delivery of any consideration due upon exchange of the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate Initial Principal Amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

 

(v)                                 make any Note payable in money other than that stated in the Notes;

 

(vi)                              make any change in the provisions of this Indenture relating to waivers of past Defaults or impair the rights of Holders to receive payments of principal of, or interest or premium or Additional Interest, if any, on, the Notes or to institute suit for the enforcement of any payment on or with respect to the Notes;

 

(vii)                           make any change to or modify the ranking of the Notes that would adversely affect the Holders;

 

(viii)                        make the Notes or the Note Guarantees subordinated in right of payment to any other obligations;

 

108

 

(ix)                                release any Subsidiary Guarantor that is a Significant Subsidiary from any of its obligations under its Guarantee or this Indenture, except as permitted by this Indenture;

 

(x)                                   except as otherwise permitted or contemplated by provisions of this Indenture, impair or adversely affect the rights of Holders to exchange Notes pursuant to Article 10, including any adverse change to the Exchange Price; or

 

(xi)                                make any change in the preceding amendment and waiver provisions.

 

Section 9.03.  [Reserved].

 

Section 9.04.  Compliance with Trust Indenture Act.  Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

 

Section 9.05.  Revocation and Effect of Consents.  Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

Section 9.06.  Notation on or Exchange of Notes.  The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.07.  Trustee to Sign Amendments, etc.  The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amended or supplemental indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be provided with and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 13.04, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by or complies with this

 

109

 

Indenture, that all conditions precedent to such amendment required by this Indenture have been complied with and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, subject to customary exceptions.  Notwithstanding the foregoing, no Opinion of Counsel shall be required for the Trustee to execute any amendment or supplement adding a new Guarantor under this Indenture.

 

ARTICLE 10

EXCHANGE OF NOTES

 

Section 10.01.  Right To Exchange.  Each Note shall be exchangeable, at the option of the Holder, into shares of Common Stock plus cash in lieu of fractional shares, at any time prior to the close of business on the Business Day immediately preceding the Maturity Date.  The Notes shall be exchangeable into shares of Common Stock at an initial exchange price of $3.50 per share (the “Exchange Price”), subject to adjustments as provided in Section 10.05 of this Indenture.  Except as provided in Section 10.06, the Issuer shall deliver, no later than the third Business Day immediately following the relevant Exchange Date, a number of shares of Common Stock equal to the Exchange Amount for such Exchange Date for each Note being exchanged, plus any cash payable pursuant to Section 10.03 in lieu of fractional shares (the “Exchange Obligation”).  If the Exchange Date occurs within 15 calendar days of the Maturity Date, the Accreted Principal Amount for such Exchange Date shall be increased to reflect the Accretion Amount for the Maturity Date for the purpose of determining the Exchange Obligation.  The Exchange Price for such Exchange Date will not be increased in connection with any increase in the Accreted Principal Amount.

 

Section 10.02. Exchange Procedures.  (a) In order to exercise the exchange right with respect to any Definitive Notes, a Holder must (i) complete and manually sign an irrevocable notice of exchange in the form entitled “Form of Exchange Notice” attached to the reverse of such Definitive Note (or a facsimile thereof) (an “Exchange Notice”), (ii) deliver such Exchange Notice and Definitive Note to the Exchange Agent at the office of the Exchange Agent, (iii) to the extent any shares of Common Stock issuable upon exchange are to be issued in a name other than the Holder’s, furnish appropriate endorsements and transfer documents as may be required by the Exchange Agent and (iv) if required pursuant to Section 10.02(f), pay all transfer or similar taxes or duties.

 

(b)                       In order to exercise the exchange right with respect to any interest in a Global Note, a Holder must (i) comply with the Depositary’s procedures for exchanging a beneficial interest in a Global Note, (ii) to the extent any shares of Common Stock issuable upon exchange are to be issued in a name other than the Holder’s, furnish appropriate endorsements and transfer documents as may be

 

110

 

required by the Exchange Agent and (iii) if required pursuant to Section 10.02(f), pay all transfer or similar taxes or duties.

 

(c)                        The date that the Holder satisfies the requirements in clause (a) or (b), as applicable, is the “Exchange Date.”

 

(d)                       In case any Note shall be surrendered for partial exchange, the Issuer shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered, without charge to such Holder, a new Note or Notes in authorized denominations in an aggregate Initial Principal Amount equal to the unexchanged portion of the surrendered Note.

 

(e)                        Upon the exchange of a beneficial interest in a Global Note, the Trustee and the Depositary shall reduce the Initial Principal Amount of such Global Note in their records to reflect such exchange.

 

(f)                          The issuance of stock certificates on exchanges of Notes shall be made without charge to the exchanging Holder for any documentary, stamp or similar issue or transfer tax in respect of the issue thereof.  The Issuer shall not, however, be required to pay any such tax which may be payable in respect of any transfer involved in the issue and delivery of stock in any name other than that of the Holder of any Notes exchanged, and the Issuer shall not be required to issue or deliver any such stock certificate unless and until the Person or Persons requesting the issue thereof shall have paid to the Issuer the amount of such tax or shall have established to the satisfaction of the Issuer that such tax has been paid.

 

(g)                       The delivery of shares of Common Stock together with cash in lieu of any fractional shares of Common Stock, upon exchange of a Note will be deemed to satisfy in full all obligations with respect to such Note.  Accordingly, any accrued but non-capitalized interest will be deemed to be paid in full upon exchange, rather than cancelled, extinguished or forfeited.

 

Section 10.03.  Cash Payments in Lieu of Fractional Shares.  The Issuer shall not deliver fractional shares of Common Stock upon exchange of Notes.  If multiple Notes shall be surrendered for exchange at one time by the same Holder, the number of full shares of Common Stock which shall be deliverable upon exchange shall be computed on the basis of the aggregate Accreted Principal Amount of the Notes so surrendered.  If any fractional share of Common Stock would be deliverable upon the exchange of any Notes, the Issuer shall make payment therefor in cash in lieu of fractional shares of Common Stock based on the Common Stock Price on the Business Day immediately preceding the Exchange Date.  The Issuer shall pay any cash payable in lieu of fractional shares no later than the third Business Day following the Exchange Date.

 

Section 10.04.  Withholding Tax.  (a) If the shares of Common Stock and any cash payable in lieu of fractional shares paid by the Issuer to a Holder upon exchange of the Notes pursuant to this Article 10 are not sufficient to allow the

 

111

 

Issuer to comply with the United States federal withholding tax obligations imposed by the Code with respect to accrued and non-capitalized interest on the Notes payable to the Beneficial Owner of such Notes, the Issuer may, to the extent required by applicable law, recoup or set off such liability against any amounts owed to such Holder, including, but not limited to, the shares of Common Stock to be issued upon exchange to such Holder or any actual cash dividends or distributions subsequently made with respect to such shares of Common Stock to such Holder.

 

(b)                       If the Exchange Price of the Notes is adjusted pursuant to this Indenture, to the extent such adjustment results in a constructive distribution to Beneficial Owners of the Notes under Section 305 of the Code, the Issuer may, to the extent required by law, recoup or set off such liability against any payments (whether in cash or Common Stock) made with respect to the Notes (or any Common Stock received upon exchange thereof) to such Beneficial Owners.

 

Section 10.05.  Adjustment of Exchange Price.  The Exchange Price shall be adjusted from time to time as described below if any of the following events occurs:

 

(a)                        If Holdings issues shares of Common Stock as a dividend or distribution to all or substantially all holders of Common Stock, or if Holdings effects a share split or share combination in respect of the Common Stock, the Exchange Price shall be adjusted based on the following formula:

 

	
 
    	
EP1 = EP0 × 
    	
OS0
    	
 
    
	
OS1
    	
 
    

 

	
where,
    
	
 
    
	
EP0
    	
=
    	
the Exchange Price   in effect immediately prior to the close of business on the Record Date for   such dividend or distribution, or immediately prior to the open of business   on the effective date of such share split or share combination, as   applicable;
    
	
 
    	
 
    	
 
    
	
EP1
    	
=
    	
the Exchange Price   in effect immediately after the close of business on such Record Date or   immediately after the open of business on such effective date, as applicable;
    
	
 
    	
 
    	
 
    
	
OS0
    	
=
    	
the number of   shares of Common Stock outstanding immediately prior to the close of business   on such Record Date or immediately prior to the open of business on such   effective date, as applicable; and
    

 

112

 

	
OS1
    	
=
    	
the number of   shares of Common Stock that would be outstanding immediately after giving   effect to such dividend, distribution, share split or share combination.
    

 

Any adjustment pursuant to this Section 10.05(a) shall become effective immediately after (x) the close of business on the Record Date for such dividend or distribution or (y) the open of business on the effective date of such share split or share combination.  If any dividend or distribution of the type described in this Section 10.05(a) is declared but not so paid or made, the Exchange Price shall be readjusted, effective as of the date the Board of Directors of Holdings determines not to pay such dividend or distribution, to the Exchange Price that would then be in effect if such dividend or distribution had not been declared.

 

(b)         If Holdings issues to all or substantially all holders of Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of Common Stock at a price per share that is less than the average Common Stock Prices of the Common Stock for the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Exchange Price shall be adjusted based on the following formula:

 

	
 
    	
EP1 = EP0 × 
    	
OS0 + Y
    	
 
    
	
OS0 + X
    	
 
    

 

	
where,
    
	
 
    
	
EP0
    	
=
    	
the Exchange Price   in effect immediately prior to the close of business on the Record Date for   such issuance;
    
	
 
    	
 
    	
 
    
	
EP1
    	
=
    	
the Exchange Price   in effect immediately after the close of business on such Record Date;
    
	
 
    	
 
    	
 
    
	
OS0
    	
=
    	
the number of   shares of Common Stock outstanding immediately prior to the close of business   on such Record Date;
    
	
 
    	
 
    	
 
    
	
X
    	
=
    	
the total number   of shares of Common Stock issuable pursuant to such rights, options or   warrants; and
    
	
 
    	
 
    	
 
    
	
Y
    	
=
    	
the number of   shares of Common Stock equal to the aggregate price payable to exercise such   rights, options or warrants divided by   the average of the Common Stock Prices of the Common Stock for the ten   consecutive Trading Day period ending on, and including, the Trading Day   immediately preceding the announcement of the issuance of such rights, options   or warrants.
    

 

113

 

 

Any adjustment pursuant to this Section 10.05(b) shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the close of business on the Record Date for such issuance.  In the event that such rights, options or warrants described in this Section 10.05(b) are not so distributed, the Exchange Price shall be readjusted to the Exchange Price that would then be in effect if the Record Date for such distribution had not occurred.  To the extent that such rights or warrants are not exercised prior to their expiration or shares of the Common Stock are otherwise not delivered pursuant to such rights, options or warrants upon the exercise of such rights, options or warrants, the Exchange Price shall be readjusted to the Exchange Price that would then be in effect had the adjustments made upon the issuance of such rights, options or warrants been made on the basis of the delivery of only the number of shares of the Common Stock actually delivered.

 

For purposes of this Section 10.05(b), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the Common Stock at less than the average Common Stock Price of the Common Stock for the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price payable for such shares of the Common Stock, there shall be taken into account any consideration received by Holdings for such rights, options or warrants and the value of such consideration, if other than cash, to be determined by the Board of Directors of Holdings.

 

(c)           If Holdings distributes to all or substantially all holders of the Common Stock shares of its Capital Stock (other than Common Stock), evidences of its indebtedness, other assets or property of Holdings or rights, options or warrants to acquire its Capital Stock or other securities of Holdings excluding any dividend, distribution or issuance as to which an adjustment was effected by clauses (a) or (b) above or (d) below, or Spin-Offs as to which the provisions set forth below in this Section 10.05(c) apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities of Holdings, the “Distributed Property”) the Exchange Price shall be adjusted based on the following formula:

 

	
EP1    =    EP0    ×   
    	
SP0 – FMV
    	
 
    
	
 
    	
SP0
    	
 
    

 

where,

 

	
EP0
    	
=
    	
the Exchange Price   in effect immediately prior to the close of business on the Record Date for   such distribution;
    
	
 
    	
 
    	
 
    
	
EP1
    	
=
    	
the Exchange Price   in effect immediately after the close of business on such Record Date;
    

 

114

 

	
SP0
    	
=
    	
the average of the   Common Stock Prices of the Common Stock over the ten consecutive Trading Day   period ending on, and including, the Trading Day immediately preceding the   Ex-Dividend Date for such distribution; and
    
	
 
    	
 
    	
 
    
	
FMV
    	
=
    	
the fair market   value (as determined by the Board of Directors of Holdings), on such Record   Date, of the shares of Capital Stock, evidences of indebtedness or assets so   distributed, expressed as an amount per share of Common Stock.
    

 

Any adjustment made under the portion of this Section 10.05(c) above shall become effective immediately after the close of business on the Record Date for such distribution.  If such distribution is not so paid or made, the Exchange Price shall be adjusted to the Exchange Price that would then be in effect if such dividend or distribution had not been declared.  Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing adjustment, each Holder of a Note shall receive, at the same time and upon the same terms as holders of the Common Stock receive the Distributed Property, the amount of Distributed Property such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Exchange Amount immediately prior to the close of business on the Record Date for such distribution.  If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes of this Section 10.05(c) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Common Stock Prices of the Common Stock over the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.

 

However, if the transaction that gives rise to an adjustment pursuant to this clause (c) is one pursuant to which the payment of a dividend or other distribution on Common Stock consists of shares of Capital Stock of, or similar equity interests of or relating to, a Subsidiary or other business unit of Holdings (a “Spin-Off”) that are, or, when issued, will be, listed or admitted to trading on a United States national securities exchange, then the Exchange Price will instead be adjusted based on the following formula:

 

	
EP1    =    EP0    ×   
    	
MP0
    	
 
    
	
 
    	
FMV0 + MP0
    	
 
    

 

where,

 

	
EP0
    	
=
    	
the Exchange Price   in effect immediately prior to the end of the Valuation Period (as defined   below);
    

 

115

 

	
EP1
    	
=
    	
the Exchange Price   in effect immediately after the end of the Valuation Period;
    
	
 
    	
 
    	
 
    
	
FMV0
    	
=
    	
the average of the   Common Stock Prices of the Capital Stock or similar equity interests   distributed to holders of Common Stock applicable to one share of Common   Stock (determined by reference to the definition of Common Stock Price set   forth in Section 1.01 as if references therein to Common Stock were to   such Capital Stock or similar equity interest) over the ten consecutive   Trading Day period (the “Valuation Period”)   commencing on, and including, the Ex-Dividend Date of the Spin-Off; and
    
	
 
    	
 
    	
 
    
	
MP0
    	
=
    	
the average of the   Common Stock Prices of the Common Stock over the Valuation Period.
    

 

The adjustment to the Exchange Price under the preceding paragraph shall occur on the last Trading Day of the Valuation Period; provided that in respect of any exchange during the Valuation Period, references in the portion of this Section 10.05(c) related to Spin-Offs to ten Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed between the Ex-Dividend Date of such Spin-Off and the Exchange Date in determining the Exchange Price.

 

Such adjustment shall become effective immediately after the Record Date for such dividend or distribution.  If such dividend or distribution is not so made, the Exchange Price shall be readjusted to be the Exchange Price that would then be in effect if such dividend or distribution had not been declared.

 

For purposes of this Section 10.05(c) (and subject in all respect to Section 10.09), rights, options or warrants distributed by Holdings to all holders of its Common Stock entitling them to subscribe for or purchase shares of Holdings’ Capital Stock, including Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this Section 10.05(c) (and no adjustment to the Exchange Price under this Section 10.05(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Exchange Price shall be made under this Section 10.05(c).  If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date 

 

116

 

of distribution and Record Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof).  In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Exchange Price under this Section 10.05(c) was made, (A) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Exchange Price shall be readjusted as if such rights, options or warrants had not been issued and (y) the Exchange Price shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (B) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Exchange Price shall be readjusted as if such rights, options and warrants had not been issued.

 

For purposes of Section 10.05(a), Section 10.05(b) and Section 10.05(c), any dividend or distribution to which this Section 10.05(c) is applicable that also includes one or both of:

 

(A)          a dividend or distribution of shares of Common Stock to which Section 10.05(a) is applicable (the “Clause A Distribution”); or

 

(B)           a dividend or distribution of rights, options or warrants to which Section 10.05(b) is applicable (the “Clause B Distribution”),

 

then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 10.05(c) is applicable (the “Clause C Distribution”) and any Exchange Price adjustment required by this Section 10.05(c) with respect to such Clause C Distribution shall then be made, and (2) the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Exchange Price adjustment required by Section 10.05(a) and Section 10.05(b) with respect thereto shall then be made, except that, if determined by the Issuer (I) the “Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to close of business on such Record Date or immediately after the open of business on such effective date, as applicable” within the meaning of 

 

117

 

Section 10.05(a) or “outstanding immediately prior to close of business on such Record Date” within the meaning of Section 10.05(b).

 

(d)           If any dividend or other distribution consisting exclusively of cash is made to all or substantially all holders of Common Stock, the Exchange Price shall be adjusted based on the following formula:

 

	
EP1    =    EP0    ×   
    	
SP0 – C
    	
 
    
	
 
    	
SP0
    	
 
    

 

where,

 

	
EP0
    	
=
    	
the Exchange Price   in effect immediately prior to the close of business on the Record Date for   such dividend or distribution;
    
	
 
    	
 
    	
 
    
	
EP1
    	
=
    	
the Exchange Price   in effect immediately after the close of business on such Record Date;
    
	
 
    	
 
    	
 
    
	
SP0
    	
=
    	
the Common Stock   Price of the Common Stock on the Trading Day immediately preceding the   Ex-Dividend Date for such dividend or distribution; and
    
	
 
    	
 
    	
 
    
	
C
    	
=
    	
the amount in cash   per share distributed by Holdings to holders of the Common Stock.
    

 

Any adjustment pursuant to this Section 10.05(d) shall become effective immediately after the close of business on the Record Date for such dividend or distribution.  In the event that any such dividend or distribution is not so made, the Exchange Price shall be readjusted, effective as of the date the Board of Directors of Holdings determines not to pay such dividend or distribution, to be the Exchange Price that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing adjustment, each Holder of a Note shall receive, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Exchange Amount immediately prior to the close of business on the Record Date for such cash dividend or distribution.

 

(e)           If Holdings or any of its Subsidiaries makes a payment in respect of a tender or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock validly tendered or exchanged exceeds the Common Stock Price per share 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 (the 

 

118

 

“Expiration Date”), the Exchange Price shall be adjusted based on the following formula:

 

	
EP1    =    EP0    ×   
    	
OS0 × SP1
    	
 
    
	
 
    	
FMV   + (SP1 × OS1)
    	
 
    

 

where,

 

	
EP0
    	
=
    	
the Exchange Price   in effect immediately prior to the close of business on the Trading Day immediately   following such Expiration Date;
    
	
 
    	
 
    	
 
    
	
EP1
    	
=
    	
the Exchange Price   in effect immediately after the close of business on the Trading Day   immediately following such Expiration Date;
    
	
 
    	
 
    	
 
    
	
FMV
    	
=
    	
the fair market   value (as determined by the Board of Directors of Holdings), on the   Expiration Date, of the aggregate value of all cash and any other   consideration paid or payable for shares validly tendered or exchanged and   not withdrawn as of the Expiration Date;
    
	
 
    	
 
    	
 
    
	
OS1
    	
=
    	
the number of   shares of Common Stock outstanding as of the last time tenders or exchanges   may be made pursuant to such tender or exchange offer (the “Expiration Time”), after giving effect to the purchase or   exchange of all shares of Common Stock accepted for purchase or exchange in   such tender offer or exchange offer;
    
	
 
    	
 
    	
 
    
	
OS0
    	
=
    	
the number of   shares of Common Stock outstanding at the Expiration Time, prior to giving   effect to the purchase or exchange of all shares of Common Stock accepted for   purchase or exchange in such tender or exchange offer; and
    
	
 
    	
 
    	
 
    
	
SP1
    	
=
    	
the average of the   Common Stock Prices of the Common Stock for the ten consecutive Trading Day   period ending on, and including, the Trading Day next succeeding the   Expiration Date.
    

 

Such adjustment shall become effective immediately after the close of business on the Trading Day immediately following the Expiration Date.  In the event Holdings or one of its Subsidiaries is obligated to purchase shares of the Common Stock pursuant to any such tender offer or exchange offer, but Holdings or such Subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, the Exchange Price shall be readjusted to be the Exchange Price that would then be in effect if such tender offer or exchange offer had not been made.  Except as set forth in the preceding 

 

119

 

sentence, if the application of this Section 10.05(e) to any tender offer or exchange offer would result in an increase in the Exchange Price, no adjustment shall be made for such tender offer or exchange offer under this Section 10.05(e).

 

(f)            To the extent permitted by applicable law and subject to the applicable rules of the principal United States national or regional securities exchange, if any, on which the Common Stock is listed, the Issuer from time to time may decrease the Exchange Price by any amount for a period of at least 20 calendar days if the decrease is irrevocable during the period and the Issuer’s Board of Directors shall have made a determination that such decrease would be in the Issuer’s best interest, which determination shall be conclusive.  Whenever the Exchange Price is decreased pursuant to the preceding sentence, the Issuer shall mail to holders of record of the Notes a notice of the decrease, which notice will be given at least five calendar days prior to the effectiveness of any such decrease, and such notice shall state the decreased Exchange Price and the period during which it will be in effect.

 

(g)           In addition, the Issuer may (but is not required to) decrease the Exchange Price to avoid or diminish any income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.

 

(h)           Adjustments to the Exchange Price shall be calculated to the nearest cent. No adjustment to the Exchange Price shall be required unless the adjustment would require an increase or decrease of at least 1% of the Exchange Price. However, the Issuer will carry forward any adjustments that are less than 1% of the Exchange Price that it elects not to make and take them into account upon the earlier of (i) any exchange of Notes or (ii) such time as all adjustments that have not been made prior thereto would have the effect of adjusting the Exchange Price by at least 1%.

 

(i)            Whenever the Exchange Price is adjusted as herein provided, the Issuer shall promptly file with the Trustee and any Exchange Agent other than the Trustee an Officer’s Certificate setting forth any applicable declaration date and the Exchange Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Exchange Price and may assume without inquiry that the last Exchange Price of which it has knowledge is still in effect.  Promptly after delivery of such certificate, the Issuer shall prepare a notice of such adjustment of the Exchange Price setting forth the adjusted Exchange Price and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Exchange Price to each Holder at its last address appearing on the Note Register within 20 calendar days of the effective date of such adjustment.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

 

120

 

(j)            In any case in which this Section 10.05(j) provides that an adjustment shall become effective immediately after (i) a Record Date for a dividend or distribution described in Sections 10.05(a), 10.05(b) or 10.05(d), (ii) the effective date for a share split or share combination of the Common Stock described in Section 10.05(a), (iii) a Record Date for the determination of stockholders entitled to receive rights or warrants pursuant to Section 10.05(b), or (iv) the Expiration Date for any tender or exchange offer pursuant to Section 10.05(e), (each, a “Determination Date”), Holdings may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the Holder of any Notes exchanged after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such exchange by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such exchange before giving effect to such adjustment and (y) paying to such Holder any amount in cash in lieu of any fractional share pursuant to Section 10.05.  For purposes of this Section 10.05(j), the term “Adjustment Event” shall mean:

 

(A)          in any case referred to in clause (i) hereof, the date any such dividend or distribution is paid or made;

 

(B)           in any case referred to in clause (ii) hereof, the occurrence of such event;

 

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

 

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

 

(k)           Notwithstanding any of the foregoing clauses in this Section 10.05, the applicable Exchange Price shall not be adjusted pursuant to clauses (a) through (e) above if the Holders will participate (other than in the case of a share split or share combination) in the transaction that would otherwise give rise to adjustment pursuant to this Section 10.05 without exchange of such Holder’s Notes on a basis equivalent to a holder of a number of shares of Common Stock equal to Exchange Amount as of the date such adjustment would otherwise become effective.  In no event shall Holdings adjust the Exchange Price to the extent that the adjustment would reduce the Exchange Price below the par value per share of Common Stock.  In addition, the applicable Exchange Price shall not be adjusted:

 

(i)         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 the securities of Holdings or any of its Subsidiaries 

 

121

 

and the investment of additional optional amounts in shares of Common Stock under any plan;

 

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

 

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

 

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

 

(v)        for accrued and non-capitalized interest.

 

(l)            For purposes of this Section 10.05, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of Holdings but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.  Holdings shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of Holdings.

 

Section 10.06.  Effect of Reclassification, Consolidation, Merger Or Sale.  In the event of:

 

(a)           any recapitalization, reclassification or change of Common Stock (other than changes resulting from a subdivision or combination to which Section 10.05(a) applies or a change in par value or from par value to no par value or vice versa);

 

(b)           a consolidation, merger or combination involving Holdings; or

 

(c)           a sale, lease or other transfer to a third party of the consolidated assets of Holdings and its Subsidiaries substantially as an entirety; or

 

(d)           any statutory share exchange,

 

in each case, as a result of which holders of Common Stock receive cash, securities or other property (the “Reference Property”) in exchange for such Common Stock (any such event or transaction, a “Reorganization Event”), in each case, Holdings or its successor, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the TIA as in force at the date of execution of such supplemental indenture, if such supplemental indenture is then required to so comply) providing that the Notes shall become exchangeable based on the type and amount of consideration that would have been received by the holders of a number of shares of Common Stock equal to the 

 

122

 

Exchange Amount immediately prior to such Reorganization Event; provided, however, that at and after the effective time of the Reorganization Event, the number of shares of Common Stock otherwise deliverable upon exchange of the Notes in accordance with Section 11.02 shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have received in such Reorganization Event.  If the Reorganization Event causes the Common Stock to be exchanged for more than a single type of consideration (determined based in part upon any form of stockholder election), the Reference Property into which the Notes will be exchangeable will be deemed to be (i) if the holders of a majority of Common Stock make an affirmative election, the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (ii) if the holders of a majority of Common Stock do not make an affirmative election, the weighted average of the types and amounts of consideration received by all holders of Common Stock.  In all cases, the provisions under Section 10.02 shall continue to apply with respect to the calculation of the Exchange Obligation.  Holdings hereby agrees not to become a party to any such transaction unless its terms are consistent with the foregoing.  Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as practicable to the adjustments provided for in this Article 10.  Holdings shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at the address of such Holder as it appears in the Note Register, within 20 calendar days after execution thereof.  Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

 

Section 10.07.  Certain Covenants.  (a) Holdings shall, prior to the issuance of any Notes 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, a sufficient number of shares of Common Stock, free of preemptive rights, to permit the exchange of the Notes.

 

(b)           Each of Holdings and the Issuer covenants that all shares of Common Stock delivered upon exchange of Notes shall be duly and validly issued by Holdings and fully paid and non-assessable by Holdings and free from all taxes, liens and charges with respect to the issue thereof.

 

(c)           Each of Holdings and the Issuer shall endeavor promptly to comply with all federal and state securities laws regulating the issuance and delivery of shares of Common Stock upon the exchange of Notes, if any, and shall cause to have listed or quoted and shall keep listed or quoted all such shares of Common Stock on each United States national securities exchange or automatic quotation system or over-the-counter or other domestic market on which the Common Stock is then listed or quoted.

 

Section 10.08.  Notice To Holders Prior To Certain Actions.  In case:

 

123

 

(a)           Holdings shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Exchange Price pursuant to Section 10.05; or

 

(b)           Holdings shall authorize the granting to all or substantially all of the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants that would require an adjustment in the Exchange Price pursuant to Section 10.05; or

 

(c)           of any reclassification of the Common Stock of Holdings (other than a share split or share combination of its outstanding Common Stock, or a change in par value), or of any share exchange, consolidation or merger to which Holdings is a party and for which approval of any stockholders of Holdings is required, or of the conveyance, transfer, sale, lease or other disposition of all or substantially all of the consolidated assets of Holdings; or

 

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

 

the Issuer shall cause to be filed with the Trustee and to be mailed to each Holder at its address appearing on the books and records of the Registrar, as promptly as possible but in any event at least 20 calendar days prior to the applicable date hereinafter specified, a notice stating (x) the declaration date of the dividend or other distribution, (y) the Record Date for 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 (z) the date on which such reclassification, share exchange, consolidation, merger, conveyance, transfer, sale, lease or other disposition, 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.

 

Section 10.09.  Stockholder Rights Plans.  If the rights provided for in any rights plan adopted by Holdings have not separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights agreement, upon exchange of Notes, the exchanging Holder shall receive, in addition to shares of Common Stock, if any, the rights under the applicable stockholders rights agreement.  If such rights have separated from the Common Stock, the Exchange Price shall be adjusted as provided in Section 10.05(c) at the time of separation as if Holdings distributed to all holders of the Common Stock, shares of Holdings’ Capital Stock, evidences of indebtedness or assets, subject to 

 

124

 

readjustment in the event of the expiration, termination or redemption of such rights.

 

Section 10.10.  Responsibility of Trustee.  The Trustee and any other Exchange Agent shall not at any time be under any duty or responsibility to any Holder to determine the Exchange Price or whether any facts exist that may require any adjustment (including any increase) of the Exchange Price, 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 Exchange 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, property or cash that may at any time be issued or delivered upon the exchange of any Note; and the Trustee and any other Exchange Agent make no representations with respect thereto.  Neither the Trustee nor any Exchange Agent shall be responsible for any failure of the Issuer to transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of exchange or to comply with any of the duties, responsibilities or covenants of Holdings or the Issuer contained in this Article 10.  Without limiting the generality of the foregoing, neither the Trustee nor any Exchange Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 10.06 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the exchange of their Notes after any event referred to in such Section 10.06 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Issuer shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

 

ARTICLE 11
 GUARANTEES

 

Section 11.01.  Guarantee.  (a) Subject to this Article 11, each of the Guarantors hereby, jointly and severally, irrevocably and unconditionally guarantees as primary obligors and not merely as sureties, to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuer hereunder or thereunder, that:

 

(i)         the principal of, premium and Additional Interest, if any, and interest on the Notes shall be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all 

 

125

 

other Obligations of the Issuer to the Holders or the Trustee hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

 

(ii)        in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

 

(b)           The Guarantors hereby agree that their obligations hereunder are irrevocable and unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest, notice and all demands whatsoever and covenant that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture or by release in accordance with the provisions of this Indenture.

 

(c)           If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid by the Issuer or the Guarantors to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

 

(d)           Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all Obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and in the event of any declaration of acceleration of such Obligations as provided in Article 6, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors shall have the right to seek contribution from any non-paying 

 

126

 

Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

 

Section 11.02.  [Reserved].

 

Section 11.03.  Limitation on Guarantor Liability.  Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor shall be limited to the maximum amount that shall, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.

 

Section 11.04.  Execution and Delivery of Note Guarantee.  To evidence its Note Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit D shall be endorsed by an Officer (or other person serving in a similar capacity) of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by one of its Officers (or other person serving in a similar capacity).

 

Each Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.

 

If an Officer (or other person serving in a similar capacity) whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid nevertheless.

 

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.

 

In the event that the Issuer or any of its Restricted Subsidiaries creates or acquires any Subsidiary after the date of this Indenture, if required by Section 4.19, the Issuer shall cause such Subsidiary to comply with the provisions of Section 4.19 and this Article 11, to the extent applicable.

 

127

 

Section 11.05.  Guarantors May Consolidate, etc., on Certain Terms.  Except as otherwise provided in this Section 11.05, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than either of the Issuer or another Guarantor, unless either:

 

(a)           the Person (if other than the Issuer or a Guarantor) acquiring the property in any such sale or disposition or the Person (if other than the Issuer or a Guarantor) formed by or surviving any such consolidation or merger unconditionally assumes all the obligations of that Guarantor, under this Indenture, the Note Guarantee and the Registration Rights Agreement pursuant to a supplemental indenture satisfactory to the Trustee; or

 

(b)           such transaction does not violate Section 4.10.

 

In case of any such consolidation, merger, sale or conveyance referred to in clause (a) and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Issuer and delivered to the Trustee. All the Note Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.

 

Except as set forth in Articles 4 and 5, and notwithstanding clauses and above, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into either of the Issuer or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Issuer or another Guarantor.

 

Section 11.06.  Releases.  The Note Guarantee of a Guarantor will be released:

 

(a)           in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Issuer or a Restricted Subsidiary of the Issuer, if the sale or other disposition does not violate Section 4.10;

 

(b)           in connection with any sale or other disposition of all of the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect 

 

128

 

to such transaction) the Issuer or a Restricted Subsidiary of the Issuer after which the Guarantor is no longer a Restricted Subsidiary, if the sale or other disposition does not violate Section 4.10;

 

(c)           if the Issuer designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.17 or a Non-Guarantor Subsidiary in accordance with the definition of that term; or

 

(d)           upon legal satisfaction and discharge in accordance with Article 12.

 

If any Guarantor is released from its Note Guarantee, any of its Subsidiaries that are Guarantors will be released from their Note Guarantees, if any.

 

Any Guarantor not released from its obligations under its Note Guarantee as provided in this Section 11.06 shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 11.

 

ARTICLE 12
 SATISFACTION AND DISCHARGE

 

Section 12.01.  Satisfaction and Discharge.  This Indenture shall be discharged and shall cease to be of further effect as to all Notes issued hereunder, when:

 

(a)           either:

 

(i)         all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money or shares of Common Stock sufficient to satisfy the Issuer’s Exchange Obligation have been deposited in trust and thereafter repaid to the Issuer, have been delivered to the Trustee for cancellation; or

 

(ii)        all Notes that have not been delivered to the Trustee for cancellation shall have become due and payable, whether at the Maturity Date, Redemption Date, upon exchange or otherwise and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, cash and shares of Common Stock (solely to satisfy the Issuer’s Exchange Obligation, if applicable), or a combination of the foregoing, in amounts as shall be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Additional Interest, if 

 

129

 

any, and accrued and non-capitalized interest to the Maturity Date or Redemption Date and any consideration due upon exchange, if applicable;

 

(b)           no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit shall not result in a breach or violation of, or constitute a default under, any other instrument to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;

 

(c)           the Issuer or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and

 

(d)           the Issuer has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money and shares of Common Stock, if applicable, toward the payment or exchange of the Notes on the Maturity Date, Redemption Date or Exchange Date, as the case may be.

 

In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

 

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to sub-clause (ii) of clause (a) of this Section, the provisions of Sections 12.02 and 12.03 shall survive. In addition, nothing in this Section 12.01 shall be deemed to discharge those provisions of Section 7.07, that, by their terms, survive the satisfaction and discharge of this Indenture.

 

Section 12.02.  Application of Trust Money.  Subject to the provisions of Section 12.03, all money and shares of Common Stock deposited with the Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money and shares of Common Stock have been deposited with the Trustee; but such money and shares of Common Stock need not be segregated from other funds except to the extent required by law.

 

To the extent that and so long as the Trustee or Paying Agent is unable to apply any money, Government Securities or shares of Common Stock in accordance with Section 12.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.01; provided, 

 

130

 

however, that if the Issuer has made any payment of principal of, premium, if any, or interest on any Notes following the reinstatement of their obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

Section 12.03.  Repayment to Issuer.  Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium or Additional Interest, if any, or interest on any Note and remaining unclaimed for two years after such principal, premium or Additional Interest, if any, or interest has become due and payable shall be paid to the Issuer on its request or (if then held by the Issuer) shall be discharged from such trust; and the Holder of such Note shall thereafter be permitted to look only to the Issuer for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining shall be repaid to the Issuer.

 

ARTICLE 13
 MISCELLANEOUS

 

Section 13.01.  Trust Indenture Act Controls.  If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control, except that, notwithstanding any contrary provision of this Indenture, the last paragraph of Section 316(a) of the TIA shall not apply to this Indenture until it is qualified under the TIA.

 

Section 13.02.  Notices.  Any notice or communication by either of the Issuer, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to the Issuer and/or any Guarantor:

 

Symbion, Inc.
 40 Burton Hills Blvd., Suite 500
 Nashville, Tennessee 37215
 Telecopier No.: 615-234-5999
 Attention: Teresa Sparks

 

131

 

If to the Trustee:

 

U.S. Bank National Association
 150 Fourth Avenue North
 Second Floor
 Nashville, Tennessee 37219
 Telecopier No.: 615-251-0737
 Attn:  Wally Jones

 

The Issuer, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

 

Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the Note Register. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

 

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

 

If the Issuer mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

 

Section 13.03.  Communication by Holders with Other Holders.  Holders may communicate pursuant to TIA Section 312 with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

 

Section 13.04.  Officer’s Certificate and Opinion of Counsel as to Conditions Precedent.  Upon any request or application by the Issuer to the Trustee to take any action under this Indenture, the Issuer shall furnish to the Trustee:

 

(a)           an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 

 

132

 

13.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

 

(b)           an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

Section 13.05.  Statements Required in Officer’s Certificate or Opinion of Counsel.  Each Officer’s Certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA Section 314 and must include:

 

(a)           a statement that the Person making such Officer’s Certificate or Opinion of Counsel has read such covenant or condition;

 

(b)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such Officer’s Certificate or Opinion of Counsel are based;

 

(c)           a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

 

(d)           a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

 

Section 13.06.  Rules by Trustee and Agents.  The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 13.07.  No Personal Liability of Directors, Officers, Employees and Stockholders.  No director, officer, employee, incorporator, stockholder, member, partner or other holder of Equity Interests of the Issuer or any Guarantor, as such, shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, this Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

 

Section 13.08.  Governing Law.  THIS INDENTURE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS 

 

133

 

INDENTURE, THE NOTES AND THE NOTE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 13.09.  No Adverse Interpretation of Other Agreements.  This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Issuer or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 13.10.  Successors.  All agreements of the Issuer in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 11.05.

 

Section 13.11.  Severability.  In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 13.12.  Counterpart 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.

 

Section 13.13.  Table of Contents, Headings, etc.  The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

 

[Signature Pages Follow]

 

134

 

SIGNATURES

 

Dated as of June 14, 2011

 

	
 
    	
SYMBION, INC., 
   as Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Teresa F.   Sparks
    
	
 
    	
 
    	
Name: 
    	
Teresa F. Sparks
    
	
 
    	
 
    	
Title: 
    	
Senior Vice   President of  Finance and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SYMBION HOLDINGS CORPORATION, 
   as Holdings
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Teresa F.   Sparks
    
	
 
    	
 
    	
Name: 
    	
Teresa F. Sparks
    
	
 
    	
 
    	
Title: 
    	
Senior Vice   President of Finance and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE SUBSIDIARY GUARANTORS SET FORTH ON SCHEDULE I HERETO, 

as Guarantors
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Teresa F.   Sparks
    
	
 
    	
 
    	
Name: 
    	
Teresa F. Sparks
    
	
 
    	
 
    	
Title: 
    	
Vice President
    

 

135

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION, 
   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Wally Jones
    
	
 
    	
 
    	
Name: Wally   Jones
    
	
 
    	
 
    	
Title:   Vice President
    

 

136

 

SCHEDULE I

 

SUBSIDIARY GUARANTORS

 

	
Ambulatory   Resource Centres Investment Company, LLC
    
	
Ambulatory   Resource Centres of Florida, Inc.
    
	
Ambulatory   Resource Centres of Massachusetts, Inc.
    
	
Ambulatory   Resource Centres of Texas, Inc.
    
	
Ambulatory   Resource Centres of Washington, Inc.
    
	
Ambulatory   Resource Centres of Wilmington, Inc.
    
	
ARC Development   Corporation
    
	
ARC Financial   Services Corporation
    
	
ASC of   Hammond, Inc
    
	
ASC of New Albany,   LLC
    
	
Austin Surgical   Holdings, LLC
    
	
Houston PSC -   I, Inc.
    
	
Lubbock   Surgicenter, Inc.
    
	
Medisphere Health   Partners - Oklahoma City, Inc.
    
	
Medisphere Health   Partners Management of Tennessee, Inc.
    
	
NeoSpine Surgery   of Nashville, LLC
    
	
NeoSpine Surgery   of Puyallup, LLC
    
	
NeoSpine Surgery,   LLC
    
	
NSC   Edmond, Inc.
    
	
Physicians   Surgical Care, Inc.
    
	
Premier Ambulatory   Surgery of Duncanville, Inc.
    
	
PSC Development   Company, LLC
    
	
PSC of New York,   L.L.C.
    
	
PSC Operating   Company, LLC
    
	
Quahog Holding   Company, LLC
    
	
SARC/Asheville, Inc.
    
	
SARC/Circleville, Inc.
    
	
SARC/DeLand, Inc.
    
	
SARC/Ft.   Myers, Inc.
    
	
SARC/FW, Inc.
    
	
SARC/Georgia, Inc.
    
	
SARC/Jacksonville, Inc.
    
	
SARC/Kent, LLC
    
	
SARC/Knoxville, Inc.
    
	
SARC/Largo Endoscopy, Inc.
    
	
SARC/Largo, Inc.
    
	
SARC/Metairie, Inc
    
	
SARC/Providence, LLC
    
	
SARC/San Antonio, LLC
    
	
SARC/Savannah, Inc.
    
	
SARC/St. Charles, Inc.
    
	
SARC/Vincennes, Inc.
    

 

I-1

 

	
SARC/Worcester, Inc.
    
	
SMBI Gresham, LLC
    
	
SMBI Havertown,   LLC
    
	
SMBI Idaho, LLC
    
	
SMBI Portsmouth,   LLC
    
	
SMBIMS   Birmingham, Inc.
    
	
SMBIMS Durango,   LLC
    
	
SMBIMS Florida I,   LLC
    
	
SMBIMS Greenville,   LLC
    
	
SMBIMS Kirkwood,   LLC
    
	
SMBIMS Novi, LLC
    
	
SMBIMS Orange   City, LLC
    
	
SMBIMS   Steubenville, Inc.
    
	
SMBIMS   Tuscaloosa, Inc.
    
	
SMBIMS Wichita,   LLC
    
	
SMBISS Beverly   Hills, LLC
    
	
SMBISS   Chesterfield, LLC
    
	
SMBISS Encino, LLC
    
	
SMBISS Irvine, LLC
    
	
SMBISS Thousand   Oaks, LLC
    
	
SSC Provider   Network, LLC
    
	
SurgiCare of   DeLand, Inc.
    
	
Symbion Ambulatory   Resource Centres, Inc.
    
	
SymbionARC   Management Services, Inc.
    
	
SymbionARC Support   Services, LLC
    
	
Texarkana Surgery   Center GP, Inc.
    
	
UniPhy Healthcare   of Johnson City VI, LLC
    
	
UniPhy Healthcare   of Louisville, Inc.
    
	
UniPhy Healthcare   of Maine I, Inc.
    
	
UniPhy Healthcare   of Memphis I, LLC
    
	
UniPhy Healthcare   of Memphis II, Inc.
    
	
UniPhy Healthcare   of Memphis III, LLC
    
	
UniPhy Healthcare   of Memphis IV, LLC
    
	
VASC, Inc.
    
	
Village Surgicenter, Inc.
    

 

I-2

 

EXHIBIT A

 

[FACE OF NOTE]

 

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

 

[Insert the Shareholders Agreement Legend, if applicable pursuant to the terms of the Indenture and the Shareholders Agreement]

 

A-1

 

8.00% Senior PIK Exchangeable Note due 2017

 

	
No. [      ]
    	
Initial   Principal Amount $[      ]
    
	
CUSIP No. [      ]
    	
 
    

 

SYMBION, INC.

 

SYMBION, INC., a Delaware corporation, promises to pay on June 15, 2017 to [CEDE & CO.](1) or registered assigns, the Accreted Principal Amount hereof based on the Initial Principal Amount set forth above [(or such greater or lesser Initial Principal Amount as shall be specified in the “Scheduled of Exchanges of Global Note” attached hereto)](2), including any accrued and non-capitalized interest to, but excluding, the Maturity Date.

 

Interest Accrual Dates: June 15 and December 15

 

Dated: [       ]

 

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT AND THE ISSUE DATE OF THIS SECURITY IS JUNE 14, 2011. A HOLDER MAY OBTAIN THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY FOR THESE NOTES BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO SYMBION, INC., 40 BURTON HILLS BLVD., SUITE 500, NASHVILLE, TENNESSEE 37215, ATTENTION: TERESA SPARKS, CHIEF FINANCIAL OFFICER.

 

[Signature pages follow]

 

(1)  Use bracketed language only if a Global Note.

(2)  Use bracketed language only if Global Note.

 

A-2

 

	
 
    	
SYMBION, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-3

 

	
This is one of the   Notes referred to in the within-mentioned Indenture:
    	
 
    
	
 
    	
 
    
	
U.S. BANK NATIONAL ASSOCIATION, 
   as Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    

 

A-4

 

[REVERSE OF NOTE]

 

8.00% Senior PIK Exchangeable Note due 2017

 

This Note is one of a duly authorized issue of Notes of SYMBION, INC., a Delaware corporation (the “Issuer”), designated as its 8.00% Senior PIK Exchangeable Notes due 2017 (the “Notes”), issued pursuant to an Indenture dated as of June 14, 2011 (the “Indenture”), among the Issuer, the Guarantors and U.S. Bank National Association (the “Trustee”), as Trustee, to which reference is hereby made for a statement of the respective rights, obligations, duties and immunities thereunder of the Issuer, the Trustee and the Holders and of the terms upon which the Notes are, and are to be, authorized and delivered.

 

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1)           INTEREST. Interest shall accrue on the Accreted Principal Amount of the Notes at the rate of 8.00% per annum from the Issue Date or from the most recent Interest Accrual Date, and will compound on a semi-annual basis on each Interest Accrual Date.  In addition, Additional Interest shall accrue on the Accreted Principal Amount of the Notes at the rate and during the periods as provided in Section 2.04 of the Registration Rights Agreement.  Except as specified in the Indenture, the Issuer shall not pay interest (including Additional Interest, if any) on this Note in cash on any Interest Accrual Date, but instead the Accreted Principal Amount shall be increased on each Interest Accrual Date by the Accretion Amount.

 

(2)           METHOD OF PAYMENT. Holders must surrender Notes to a Paying Agent to collect payment.  The Issuer shall make payment in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  The Issuer may make payment by check payable in such money.

 

(3)           PAYING AGENT, REGISTRAR AND EXCHANGE AGENT. Initially, U.S. Bank National Association, the Trustee under the Indenture, shall act as Paying Agent, Registrar and Exchange Agent. The Issuer may change any Paying Agent, Registrar or Exchange Agent without notice to any Holder. The Issuer or any of its Subsidiaries may act in any such capacity.

 

(4)           INDENTURE. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA (15 U.S. Code Sections 77aaa-77bbbb), subject to Section 13.01 of the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are general senior unsecured

 

A-5

 

obligations of the Issuer. Subject to the conditions set forth in the Indenture, the Issuer may issue Additional Notes.

 

(5)           OPTIONAL REDEMPTION.  The Issuer may not redeem the Notes prior to June 15, 2014.  On or after June 15, 2014 and prior to the Maturity Date, the Issuer may redeem all or a part of the Notes upon not less than 30 nor more than 60 days’ notice, at the Redemption Price set forth below in the table below (expressed as a percentage of the Accreted Principal Amount and based on the period during which the relevant Redemption Date occurs), plus accrued and non-capitalized interest on the Notes to be redeemed, including any Additional Interest, to, but excluding, the relevant Redemption Date (the “Redemption Price”).

 

	
Redemption Date
    	
 
    	
Percentage of Accreted
   Principal Amount
    	
 
    
	
Redemption Date occurs during the period from, and including, June 15,   2014 to, but excluding, June 15, 2015
    	
 
    	
104
    	
%
    
	
Redemption Date occurs during the period from, and including, June 15,   2015 to, but excluding, June 15, 2016
    	
 
    	
102
    	
%
    
	
Redemption Date occurs during the period from, and including, June 15,   2016 to, but excluding, June 15, 2017
    	
 
    	
100
    	
%
    

 

(6)           MANDATORY REDEMPTION.  The Issuer will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes.

 

(7)           NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 Initial Principal Amount may be redeemed in part but only in whole multiples of $1,000 Initial Principal Amount in excess thereof, unless all of the Notes held by a Holder are to be redeemed.

 

(8)           EXCHANGE.  Subject to and upon compliance with the provisions of the Indenture, the Holder hereof has the right, at its option, prior to 5:00 p.m. (New York City time) on the Business Day immediately preceding the Maturity Date, to exchange any Notes or portion thereof that is equal to $1,000 Initial Principal Amount or an integral multiple thereof, into shares of Common Stock, at the applicable Exchange Price specified in the Indenture, as adjusted from time to time as provided in the Indenture.

 

(9)           DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 Initial Principal Amount and integral multiples thereof. The transfer of Notes may be registered 

 

A-6

 

and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Issuer need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part.

 

(10)         PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

 

(11)         AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Note Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate Initial Principal Amount of the then outstanding Notes, including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes, and any existing Default or Event of Default or compliance with any provision of the Indenture, the Note Guarantees or the Notes may be waived with the consent of the Holders of a majority in aggregate Initial Principal Amount of the then outstanding Notes, including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes. Without the consent of any Holder, the Indenture, the Note Guarantees or the Notes may be amended or supplemented (i) to cure any ambiguity, defect or inconsistency, (ii) to provide for uncertificated Notes in addition to or in place of certificated Notes, (iii) to provide for the assumption of the Issuer’s or any Guarantor’s obligations to Holders of the Notes and Note Guarantees in case of a merger or consolidation, (iv) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture of any such Holder, (v) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, (vi) to evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee pursuant to the requirements of Section 7.08, (vii) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of the Issue Date, (viii) to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes or to secure the Notes, (ix) to issue additional notes in accordance with the terms of the Indenture or (x) to provide for exchange rights of Holders upon any recapitalization, reclassification or change of Common Stock, a consolidation, merger or combination involving a sale, lease or other transfer to another corporation of the consolidated assets of Holdings and its Subsidiaries substantially as an entirety, or any statutory share exchange.

 

(12)         DEFAULTS AND REMEDIES.  If any Event of Default (as defined in the Indenture) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate Initial Principal Amount of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or 

 

A-7

 

insolvency in respect of the Issuer, all outstanding Notes shall become due and payable without further action or notice.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in Initial Principal Amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power.

 

(13)         TRUSTEE DEALINGS WITH ISSUER. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuer or its Affiliates, and may otherwise deal with the Issuer or its Affiliates, as if it were not the Trustee.

 

(14)         NO RECOURSE AGAINST OTHERS. No director, officer, employee, incorporator, stockholder, member partner or other holder of Equity Interests of the Issuer or any Guarantor, as such, shall have any liability for any obligations of the Issuer or any such Guarantor under the Indenture, the Notes or the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

 

(15)         AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(16)         ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(17)         ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of June 14, 2011, among the Issuer, the Guarantors and the other parties named on the signature pages thereof (the “Registration Rights Agreement”).

 

(18)         CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in all notices issued to Holders as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice and reliance may be placed only on the other identification numbers placed thereon.

 

A-8

 

The Issuer shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to:

 

Symbion, Inc.
 40 Burton Hills Blvd., Suite 500
 Nashville, Tennessee 37215
 Telecopier No.: 615-234-5999
 Attention: Teresa Sparks

 

THIS NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

A-9

 

SCHEDULE OF EXCHANGES OF GLOBAL NOTE(3)

 

SYMBION, INC.

 

8.00% Senior PIK Exchangeable Note due 2017

 

The Initial Principal Amount of this Global Note is [                ] DOLLARS ($[              ]).  The following exchanges of a part of this Global Note for an interest in another Global Note, or exchanges in part of another other Restricted Global Note for an interest in this Global Note or exchanges of a part of this Global Note have been made:

 

	
Date of
   Exchange 
    	
 
    	
Amount of
   decrease in
   Initial
   Principal
   Amount of
   this Global
   Note
    	
 
    	
Amount of
   increase in
   Initial
   Principal
   Amount of
   this Global
   Note
    	
 
    	
Initial
   Principal
   Amount of
   this Global
   Note
   following
   such decrease
   (or increase)
    	
 
    	
Signature of
   authorized
   officer of
   Trustee or
   Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(3)  This schedule should be included only if the Note is issued in global form.

 

A-10

 

ATTACHMENT 1

 

[FORM OF EXCHANGE NOTICE]

 

TO:                            SYMBION, INC.
 U.S. BANK NATIONAL ASSOCIATION, as Trustee and Exchange Agent

 

The undersigned registered owner of this Note hereby irrevocably exercises the option to exchange this Note, or the portion thereof (which is $1,000 Initial Principal Amount or a multiple thereof) below designated in accordance with the terms of the Indenture referred to in this Note, and directs that the shares of Common Stock and cash deliverable or payable upon such exchange and any Notes representing any unexchanged Initial Principal Amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below.  Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.  If shares or any portion of this Note not exchanged are to be issued in the name of a person other than the undersigned, the undersigned will provide the appropriate information below and pay all transfer taxes payable with respect thereto.  Any amount required to be paid by the undersigned on account of interest accompanies this Note.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature(s)   must be guaranteed by an “eligible guarantor institution” meeting the   requirements of the Note Registrar, which requirements include membership or   participation in the Security Transfer Agent Medallion Program (“STAMP”) or   such other “signature guarantee program” as may be determined by the Note   Registrar in addition to, or in substitution for, STAMP, all in accordance   with the Securities Exchange Act of 1934, as amended.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature   Guarantee
    

 

A-11

 

Fill in the registration of shares of Common Stock, if any, if to be issued, and Notes if to be delivered, and the person to whom payment for fractional shares is to be made, if to be made, other than to and in the name of the registered Holder:

 

	
Please print name   and address
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Name)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Street Address)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(City, State and   Zip Code)
    	
 
    
	
 
    	
 
    
	
Principal amount   to be exchanged
    	
 
    
	
 (if less   than all):
    	
 
    
	
 
    	
 
    
	
$
    	
 
    	
 
    
	
Social   Security or Other Taxpayer
    	
 
    
	
 Identification   Number:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
			

 

NOTICE:  The signature on this Exchange Notice must correspond with the name as written upon the face of the Notes in every particular without alteration or enlargement or any change whatever.

 

A-12

 

ATTACHMENT 2

 

[FORM OF ASSIGNMENT]

 

For value received                                                                                  hereby sell(s) assign(s) and transfer(s) unto                                                              (Please insert social security or other Taxpayer Identification Number of assignee) the within Notes, and hereby irrevocably constitutes and appoints                                                                              attorney to transfer said Notes on the books of the Issuer, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature(s)   must be guaranteed by an “eligible guarantor institution” meeting the   requirements of the Registrar, which requirements include membership or   participation in the Security Transfer Agent Medallion Program (“STAMP”) or   such other “signature guarantee program” as may be determined by the Note   Registrar in addition to, or in substitution for, STAMP, all in accordance   with the Securities Exchange Act of 1934, as amended.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature   Guarantee
    

 

NOTICE:  The signature on this Assignment must correspond with the name as written upon the face of the Notes in every particular without alteration or enlargement or any change whatsoever.

 

A-13

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Symbion, Inc.
 40 Burton Hills Blvd.,
 Suite 500
 Nashville, Tennessee 37215

 

U.S. Bank National Association
 150 Fourth Avenue North
 Second Floor
 Nashville, Tennessee 37219

 

Re: 8.00% Senior PIK Exchangeable Notes due 2017

 

Reference is hereby made to the Indenture, dated as of June 14, 2011 (the “Indenture”), by and among Symbion, Inc., a Delaware corporation (the “Issuer”), the Guarantors party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

                                                           (the “Transferor”) owns and proposes to transfer the Note(s) or interest in such Note(s) specified in Annex A hereto, in the Initial Principal Amount of $                             in such Note(s) or interests (the “Transfer”), to (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

1.             o  CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note shall be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global 

 

B-1

 

Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

 

2.             o  CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

 

(a)           o  such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or

 

(b)           o  such Transfer is being effected to the Issuer or a subsidiary thereof;

 

or

 

(c)           o  such Transfer is being effected pursuant to an effective registration statement under the Securities Act.

 

3.             o  CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.

 

(a)           o  CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note shall no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

(b)           o  CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with 

 

B-2

 

the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note shall not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

B-3

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of Transferor]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    	
 
    
					

 

B-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.             The Transferor owns and proposes to transfer the following:

 

[CHECK ONE OF (a) OR (b)]

 

(a)           o a beneficial interest in the

 

(i)            o Restricted Global Note (CUSIP No. 871507 AC3), or

 

(b)           o a Restricted Definitive Note.

 

2.             After the Transfer the Transferee shall hold:

 

[CHECK ONE]

 

(a)           o a beneficial interest in the:

 

(i)            o Restricted Global Note (CUSIP No. 871507 AC3), or

 

(ii)           o Unrestricted Global Note (CUSIP No. 871507 AD1); or

 

(b)           o a Restricted Definitive Note; or

 

(c)           o an Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-5

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Symbion, Inc.
 40 Burton Hills Blvd., Suite 500
 Nashville, Tennessee 37215

 

U.S. Bank National Association
 150 Fourth Avenue North
 Second Floor
 Nashville, Tennessee 37219

 

Re: 8.00% Senior PIK Exchangeable Notes due 2017

 

(CUSIP)

 

Reference is hereby made to the Indenture, dated as of June 14, 2011 (the “Indenture”), by and among Symbion, Inc., a Delaware corporation (the “Issuer”), the Guarantors party thereto and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

                                                               (the “Owner”) owns and proposes to exchange the Note(s) or interest in such Note(s) specified herein, in the Initial Principal Amount of $                              in such Note(s) or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

 

1.             EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE

 

(a)           o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal Initial Principal Amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

C-1

 

(b)           o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(c)           o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(d)           o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

2.             EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES

 

(a)           o CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner’s beneficial interest in a Restricted 

 

C-2

 

Global Note for a Restricted Definitive Note with an equal Initial Principal Amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued shall continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

(b)           o CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the “Restricted Global Note” with an equal Initial Principal Amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued shall be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Issuer.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Insert Name of Transferor]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    	
 
    
					

 

C-3

 

EXHIBIT D

 

[FORM OF NOTATION OF NOTE GUARANTEE]

 

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, irrevocably and unconditionally guaranteed, to the extent set forth in, and subject to the provisions contained in, the Indenture dated as of June 14, 2011 (the “Indenture”) by and among Symbion, Inc., a Delaware corporation (the “Issuer”), the Guarantors party thereto and U.S. Bank National Association (the “Trustee”), the due and punctual payment of the principal of, premium and Additional Interest, if any, and interest on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other Obligations of the Issuer to the Holders or the Trustee all in accordance with the terms of the Indenture and in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 11 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee.

 

Capitalized terms used but not defined herein have the meanings given to them in the Indenture.

 

[Signature pages follow]

 

D-1

 

	
 
    	
[NAME OF   GUARANTOR(S)]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

D-2

 

EXHIBIT E

 

FORM OF SUPPLEMENTAL INDENTURE
 TO BE DELIVERED BY SUBSEQUENT GUARANTORS

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of           , 20    , among (the “Guaranteeing Subsidiary”), a subsidiary of Symbion, Inc., a Delaware corporation (the “Issuer”), the Issuer and U.S. Bank National Association, as trustee under the Indenture referred to below (the “Trustee”).

 

WITNESSETH

 

WHEREAS, the Issuer has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of June 14, 2011, providing for the issuance of 8.00% Senior PIK Exchangeable Notes due 2017 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall irrevocably and unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and

 

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

 

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

 

1.             Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.             Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in this Indenture including but not limited to Article 11 thereof.

 

3.             No Recourse Against Others. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Issuer or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by 

 

E-1

 

accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

 

4.             New York Law to Govern. THIS SUPPLEMENTAL INDENTURE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

5.             Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

 

6.             Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

 

7.             The Trustee. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Issuer.

 

E-2

 

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

 

Dated:                                             , 20

 

 

	
 
    	
[GUARANTEEING   SUBSIDIARY]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SYMBION, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SYMBION HOLDINGS CORPORATION, as Holdings
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL   ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

E-3Exhibit 4.6

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

THIS FORM OF REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of June 14, 2011 by and among SYMBION, INC., a Delaware corporation (the “Company”), SYMBION HOLDINGS CORPORATION, a Delaware corporation (“Holdings”), each of the subsidiary guarantors listed in Schedule A attached hereto (the “Subsidiary Guarantors” and, together with Holdings, the “Guarantors”) and [                                    ] (the “Initial Holders”).

 

This Agreement is made in connection with (i) the Notes Exchange Agreements, dated as of June 7, 2011, by and among the Company, the Guarantors and [                                  ] (collectively, the “Exchange Agreements”), which provide for, among other things, the issuance by the Company to the Initial Holders of an aggregate of $88,490,236 initial principal amount of the Company’s 8.00% Senior PIK Exchangeable Notes due 2017 (the “Notes”) in exchange for $85,396,396 aggregate principal amount of the Company’s existing 11.00%/11.75% Senior PIK Toggle Notes due 2015, plus accrued and unpaid interest thereon.

 

The Notes are issued under an indenture (the “Indenture”), dated as of the date hereof between the Company, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”).  Pursuant to the Indenture, the Guarantors are required to guarantee (collectively, the “Guarantees”) the Company’s obligations under the Notes and the Indenture.  References to the “Securities” shall mean, collectively, the Notes, the Guarantees, and any shares of common stock, par value $0.01 per share, of Holdings (“Common Stock”) issued upon exchange of the Notes pursuant to the terms thereof.  References to the “Issuers” shall mean both the Company and Holdings.  In order to induce the Initial Holders to enter into the Exchange Agreements, the Issuers have agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Holders and any subsequent holder or holders of the Securities.  The execution and delivery of this Agreement is a condition to the Initial Holders’ obligations under the respective Exchange Agreements.

 

The Notes and the Common Stock issued upon exchange of the Notes are “Company Securities” as defined in the Shareholders Agreement and, as a result, are subject to additional restrictions on transfer as well as certain other provisions set forth in the Shareholders Agreement.

 

In consideration of the foregoing, the parties hereto agree as follows:

 

 

ARTICLE 1
  DEFINITIONS

 

Section 1.01.  Definitions.  As used in this Agreement, the following capitalized defined terms shall have the following meanings:

 

“1933 Act” shall mean the Securities Act of 1933, as amended from time to time.

 

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

“Accreted Principal Amount” shall have the meaning set forth in the Indenture.

 

“Additional Interest” means all amounts of additional interest, if any, payable under Section 2.04(a) or (b).

 

“Closing Date” shall have the meaning set forth in the Exchange Agreements.

 

“Common Stock” shall have the meaning specified in the preamble.

 

“Company” shall have the meaning set forth in the preamble and shall also include the Company’s successors.

 

“Depositary” shall mean The Depository Trust Company, or any other depositary appointed by the Company, provided, however, that such depositary must have an address in the Borough of Manhattan, in The City of New York.

 

“Effectiveness Period” shall have the meaning set forth in Section 2.01(b).

 

“Event Date” shall have the meaning set forth in Section 2.04(c).

 

“Exchange Agreements” shall have the meaning set forth in the preamble.

 

“Exchange Price” shall have the meaning set forth in the Indenture.

 

“Free Writing Prospectus” shall mean each free writing prospectus (as defined in Rule 405 under the 1933 Act) prepared by or on behalf of the Issuers (or any of their agents or representatives) or used or referred to by the Issuers (or any of their agents or representatives) in connection with the sale of the Securities.

 

“Guarantees” shall have the meaning set forth in the preamble.

 

“Guarantors” shall have the meaning set forth in the preamble and shall also include their respective successors.

 

 

“Holder” shall mean an Initial Holder, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become beneficial owners of Registrable Securities under the Indenture.

 

“Holdings” shall have the meaning set forth in the preamble and shall also include Holdings’ successors.

 

“Indenture” shall have the meaning set forth in the preamble.

 

“Initial Holders” shall have the meaning set forth in the preamble.

 

“Issuers” shall have the meaning set forth in the preamble.

 

“Majority Holders” shall mean the Holders of a majority of the aggregate initial principal amount of outstanding Notes constituting Registrable Securities; provided that, for the purposes of this definition, a Holder of shares of Common Stock for which any Notes were exchanged pursuant to the terms thereof shall be deemed to hold an aggregate initial principal amount of the Notes (in addition to the initial principal amount of Notes then held by such Holder) equal to (i) the number of such shares of Common Stock held by such Holder, multiplied by (ii) the Exchange Price in effect at the time of the exchange of such Notes as determined in accordance with the Indenture; provided, further that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company, the Guarantors and any other guarantors of the Securities shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount.

 

“Notes” shall have the meaning set forth in the preamble.

 

“Person” shall mean an individual, partnership (general or limited), corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.

 

“Prospectus” shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

 

“Registrable Securities” shall mean the Securities; provided, however, that Securities shall cease to be Registrable Securities when (i) a Registration Statement with respect to such Securities shall have been declared effective under

 

 

the 1933 Act and such Securities shall have been disposed of pursuant to such Registration Statement or (ii) such Securities shall have ceased to be outstanding.

 

“Registration Expenses” shall mean any and all expenses incident to or incurred in connection with the performance by the Issuers of, or compliance by the Issuers with, this Agreement, including without limitation: (i) all SEC, stock exchange or Financial Industry Regulatory Authority (“FINRA”) registration and filing fees, including, if applicable, the fees and expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained by any holder of Registrable Securities in accordance with the rules and regulations of FINRA, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of FINRA (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Registrable Securities and any filings with FINRA), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Securities on any securities exchange or exchanges, (v) all rating agency fees, (vi) the fees and disbursements of counsel for the Issuers and of the independent public accountants of the Issuers, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance, (vii) the fees and expenses of the Trustee, and any escrow agent or custodian, (viii) in the case of a Shelf Registration Statement, the reasonable fees and disbursements of one special counsel (and any reasonably requested local counsel) representing the Holders of Registrable Securities (which counsel shall be elected by the Majority Holders) and (ix) any fees and disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and shall be reasonably acceptable to the Company) and (x) the fees and expenses of any special experts retained by the Issuers in connection with any Shelf Registration Statement, but excluding underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

 

“Registration Statement” shall mean any registration statement of the Issuers, as co-registrants, which covers any of the Registrable Securities pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

 

“SEC” shall mean the Securities and Exchange Commission or any successor agency or government body performing the functions currently performed by the United States Securities and Exchange Commission.

 

 

“Shareholders Agreement” shall mean the Shareholders Agreement, dated as of August 23, 2007, among Holdings, Crestview Symbion Holdings L.L.C., The Northwestern Mutual Life Insurance Company, on behalf of itself and on behalf of its Group Annuity Separate Account, Trident IV, L.P., Trident IV Professionals Fund, L.P., Banc of America Capital Investors V, L.P., R6 Opportunity Fund, L.P., R6 Overseas Opportunity Fund, Ltd. and certain other persons named therein, as amended and supplemented from time to time.

 

“Shelf Registration” shall mean a registration effected pursuant to Section 2.01 hereof.

 

“Shelf Registration Statement” shall mean a “shelf” registration statement of the Issuers, as co-registrants, pursuant to the provisions of Section 2.01 of this Agreement which covers all of the Registrable Securities on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.  For the avoidance of doubt, all Subsidiary Guarantors in respect of the Notes (regardless of whether each such person is a Guarantor on the date hereof) shall be included as registrants in any Shelf Registration Statement.

 

“Subsidiary Guarantors” shall have the meaning set forth in the preamble and shall also include their successors.

 

“TIA” means the Trust Indenture Act of 1939, as amended and in effect on the date hereof.

 

“Trustee” shall mean the trustee with respect to the Securities under the Indenture.

 

ARTICLE 2
  REGISTRATION UNDER THE 1933 ACT

 

Section 2.01.   Shelf Registration.  (a) Upon the request of the Majority Holders, the Issuers shall, at the Issuers’ cost, (i) file with the SEC not later than 90 days after the date of such request, a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time and (ii) thereafter shall use their commercially reasonable efforts to cause such Shelf Registration Statement to be declared  effective under the 1933 Act not later than 180 days after the date of such request.

 

(b)           The Issuers shall use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming part thereof to be usable by Holders until September 15, 2017, or for such shorter period that will terminate when all Registrable Securities 

 

 

covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding or otherwise to be Registrable Securities (the “Effectiveness Period”).

 

(c)           Notwithstanding any other provisions hereof, the Issuers shall use their commercially reasonable efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading.

 

The Issuers agree, if necessary, to supplement or amend the Shelf Registration Statement, as required by Section 3.01(b) below, and to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC.

 

Section 2.02.  Expenses.  The Issuers shall pay all Registration Expenses in connection with the registration pursuant to Section 2.01.  Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

 

Section 2.03.  Effectiveness.  A Shelf Registration Statement pursuant to Section 2.01 hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have become effective during the period of such interference, until the offering of Registrable Securities pursuant to such Registration Statement may legally resume.

 

Section 2.04.  Additional Interest.  (a) If either (i) a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time is not filed with the SEC on or prior to the date that is 90 days after the date of any request from the Majority Holders pursuant to Section 2.01(a), or (ii) a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time has not been declared effective on or prior to the date that is 180 days after the date of any such request (each such event referred to in clauses (i) and (ii) above, a “Registration 

 

 

Default”), then additional interest shall accrue on the Accreted Principal Amount of the Notes at the rate of (A) 0.25% per annum for each day during the 90-day period beginning on, and including, the date such Registration Default occurs and on which any Registration Default is continuing, and (B) 0.50% per annum for each day thereafter on which any Registration Default is continuing. Following the cure of all Registration Defaults the accrual of Additional Interest will cease and the interest rate will revert to the original rate.  The Company will not be obligated to pay Additional Interest in respect of more than one Registration Default at a time.

 

(b)           If the Shelf Registration Statement is unusable by the Holders for any reason, and the aggregate number of days in any consecutive twelve-month period for which the Shelf Registration Statement shall not be usable exceeds 90 days in the aggregate, then additional interest shall accrue on the Accreted Principal Amount of the Notes at the rate of (i) 0.25% per annum for each day during the 90-day period beginning on, and including, the 90th day after the date such Shelf Registration Statement first ceases to be usable in such twelve-month period and on which such Shelf Registration Statement shall not be usable, and (ii) 0.50% per annum for each day thereafter on which such Shelf Registration Statement shall not be usable.   Upon the Shelf Registration Statement once again becoming usable, the interest rate borne by the Securities will be reduced to the original interest rate if the Issuers are otherwise in compliance with this Agreement at such time.  Additional Interest shall be computed based on the actual number of days for which the Shelf Registration Statement is unusable.

 

(c)           The Issuers shall notify the Trustee within three business days after each and every date (an “Event Date”) for which Additional Interest is payable.  Additional Interest shall be payable pursuant to the Indenture in the same manner as regular interest on the Notes and shall be computed on the basis of a 360-day year comprised of twelve 30-day months

 

ARTICLE 3
  REGISTRATION PROCEDURES

 

Section 3.01.  Registration Procedures.  In connection with the obligations of the Issuers with respect to Registration Statements pursuant to Section 2.01 hereof, the Issuers shall:

 

(a)           prepare and file with the SEC a Registration Statement, within the relevant time period specified in Article 2, on the appropriate form under the 1933 Act, which form (i) shall be selected by the Issuers, (ii) shall be available for the sale of the Registrable Securities by the selling Holders thereof, (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein, and (iv) shall comply in all respects with the requirements of Regulation S-T under the 1933 

 

 

Act, and use their commercially reasonable efforts to cause such Registration Statement to become effective and remain effective in accordance with Article 2 hereof;

 

(b)           prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period in accordance with Article 2 hereof; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable to them with respect to the disposition of all securities covered by each Registration Statement during the applicable period;

 

(c)           (i) notify each Holder of Registrable Securities for which the Company has information, at least five business days prior to filing, that a Shelf Registration Statement with respect to the Registrable Securities is being filed; (ii) furnish to each Holder of Registrable Securities and to each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if the Holder so requests, all exhibits in order to facilitate the public sale or other disposition of the Registrable Securities (for the avoidance of doubt, any such supplement or amendment electronically filed with the SEC on the EDGAR system shall be deemed furnished to the Holders of Registrable Securities); and (iii) hereby consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Securities in accordance with applicable law in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto;

 

(d)           use their commercially reasonable efforts to register or qualify the Registrable Securities under all applicable state securities or “blue sky” laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement shall reasonably request by the time the applicable Registration Statement is declared effective by the SEC, and do any and all other acts and things which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that neither Issuer shall be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it is not then so qualified or would not otherwise be required to qualify but for this Section 3.01(d), or (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject;

 

(e)           notify promptly each Holder of Registrable Securities for which the Company has information, and, if requested by such Holder, confirm such advice 

 

 

in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) in the case of a Shelf Registration, if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Issuers contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects (or, in the case of any representation or warranty that by its terms is qualified by reference to materiality, a material adverse effect or any term or concept of similar import, such representation or warranty ceases to be true in all respects), (v) of the happening of any event or the discovery of any facts during the period a Shelf Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading, (vi) of the receipt by the Issuers of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vii) of any determination by the Issuers that a post-effective amendment to such Registration Statement would be appropriate;

 

(f)            furnish counsel for the Holders of Registrable Securities copies of any comment letters received from the SEC or any other request by the SEC or any state securities authority for amendments or supplements to a Registration Statement and Prospectus or for additional information;

 

(g)           make commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment;

 

(h)           furnish to each Holder of Registrable Securities, and each underwriter, if any, without charge, at least one conformed copy (or one electronically reproducible conformed copy) of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto, unless requested);

 

(i)            cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations, if applicable, (consistent with the provisions of the Indenture) and registered in such names as

 

 

the selling Holders or the underwriters, if any, may reasonably request at least three business days prior to the closing of any sale of Registrable Securities;

 

(j)            upon the occurrence of any event or the discovery of any facts, each as contemplated by Sections 3.01(e)(v) and 3.01(e)(vi) hereof, as promptly as practicable after the occurrence of such an event, use their commercially reasonable efforts to prepare a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or will remain so qualified.  At such time as such public disclosure is otherwise made or the Issuers determine that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Issuers agree as promptly as practicable to notify each Holder of such determination and to furnish each Holder such number of copies of the Prospectus as amended or supplemented, as such Holder may reasonably request;

 

(k)           a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Holders; and make representatives of the Issuers, as shall be reasonably requested by the Holders of Registrable Securities available for discussion of such document;

 

(l)            obtain a CUSIP number for all Registrable Securities not later than the effective date of a Registration Statement, and provide the Trustee with printed certificates for the Registrable Securities, as the case may be, in a form eligible for deposit with the Depositary;

 

(m)          (i) cause the Indenture to be qualified under the TIA in connection with the registration of the Registrable Securities, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use their commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;

 

(n)           when requested by the Majority Holders, enter into underwriting agreements and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Registrable Securities and in such connection therewith:

 

 

(i)    to the extent practicable, make such representations and warranties to the Holders of such Registrable Securities and the underwriters, if any, in form, substance and scope as are customarily made by issuers and guarantors to Holders or underwriters, as the case may be, in similar underwritten offerings as may be reasonably requested by them;

 

(ii)   if requested by any Holder or Holders of Securities being sold, obtain opinions of counsel to the Issuers and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the holders of a majority in principal amount or number of the Registrable Securities being sold) addressed to each selling Holder (to the extent customary) and the underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters;

 

(iii)  in the case of an underwritten offering, obtain “cold comfort” letters and updates thereof from the Issuers’ independent certified public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Issuers or of any business acquired by the Issuers for which financial statements are, or are required to be, included in the Registration Statement) addressed to the underwriters, if any, and use reasonable efforts to have such letter addressed to the selling Holders of Registrable Securities (to the extent consistent with Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accountants), such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters to underwriters in connection with similar underwritten offerings;

 

(iv)  enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Registrable Securities, which agreement shall be in form, substance and scope customary for similar offerings;

 

(v)   if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Article 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types of transactions; and

 

(vi)  deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings

 

 

to the Holders of a majority in principal amount or number of the Registrable Securities being sold and the managing underwriters, if any.

 

The above shall be done at (i) the effectiveness of such Shelf Registration Statement (and each post-effective amendment thereto) and (ii) each closing under any underwriting agreement as and to the extent required thereunder;

 

(o)        make available for inspection by representatives of the Holders of the Registrable Securities, any lead managing underwriters participating in any disposition pursuant to a Shelf Registration Statement and any counsel or accountant retained by any of the foregoing, at reasonable times and in a reasonable manner, all financial and other records, pertinent corporate documents and properties of the Issuers and the Subsidiary Guarantors reasonably requested by any such persons, and cause the respective officers, directors, employees, and any other agents of the Issuers to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in connection with a Registration Statement, and make such representatives of the Issuers available for discussion of such documents as shall be reasonably requested by the  Majority Holders (subject to customary confidentiality agreements);

 

(p)        a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of Registrable Securities, to the Holders, to counsel for the Holders and to the underwriter or underwriters of an underwritten offering of Registrable Securities, if any, make such changes in any such document prior to the filing thereof as the Majority Holders, the counsel to the Holders or the underwriter or underwriters reasonably request and, except as otherwise required by applicable law, not file any such document in a form to which the Majority Holders, counsel for the Holders of Registrable Securities or any underwriter shall not have previously been advised and furnished a copy of or to which the Majority Holders, counsel to the Holders of Registrable Securities or any underwriter shall reasonably object, and make the representatives of the Issuers available for discussion of such document as shall be reasonably requested by the Holders of Registrable Securities, counsel for the Holders of Registrable Securities or any underwriter.

 

(q)        use their commercially reasonable efforts to cause all Registrable Securities that are Common Stock to be listed on any securities exchange on which Common Stock is then listed;

 

(r)         use their commercially reasonable efforts to cause the Registrable Securities that are debt securities to be rated by the appropriate rating agencies, if so requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any;

 

 

(s)        otherwise comply with all applicable rules and regulations of the SEC and make available to their security holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; and

 

(t)         reasonably cooperate and assist in any filings required to be made with FINRA.

 

The Issuers may (as a condition to such Holder’s participation in the Shelf Registration) require each Holder of Registrable Securities to furnish to the Issuers such information regarding the Holder (including, without limitation, a customary selling holder questionnaire) and the proposed distribution by such Holder of such Registrable Securities as the Issuers may from time to time reasonably request in writing.

 

Each Holder agrees that, upon receipt of any notice from the Issuers of the happening of any event or the discovery of any facts, each of the kind described in Section 3.01(e)(v) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3.01(j) hereof, and, if so directed by the Issuers, such Holder will deliver to the Issuers (at their expense) all copies in such Holder’s possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.

 

In the event that the Issuers fail to file any Shelf Registration Statement and maintain the effectiveness of any Shelf Registration Statement as provided herein, neither Issuer shall file any Registration Statement with respect to any securities (within the meaning of Section 2(1) of the 1933 Act) of such Issuer, other than Registrable Securities.

 

If the Majority Holders decide that any of the Registrable Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage such offering will be selected by the Majority Holders and shall be acceptable to the Issuers.  No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

 

ARTICLE 4
  INDEMNIFICATION; CONTRIBUTION

 

Section 4.01.  Indemnification; Contribution.  (a) The Issuers and the Subsidiary Guarantors agree jointly and severally to indemnify and hold harmless each Holder, officers, directors, partners, employees, representatives and agents of each Person, if any, who controls any Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

 

(i)    against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto) pursuant to which Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or any Free Writing Prospectus or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(ii)   against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4.01(d) below) any such settlement is effected with the written consent of the Issuers; and

 

(iii)  against any and all expense whatsoever, as incurred (including the reasonable fees and disbursements of counsel chosen by any indemnified party), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above;

 

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Issuers by the

 

 

Holder expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto).

 

(b)        Each Holder severally, but not jointly, agrees to indemnify and hold harmless the Issuers, the Subsidiary Guarantors, the selling Holders, and each of their respective directors and officers, and each Person, if any, who controls the Issuers, a Subsidiary Guarantor, the selling Holders within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 4.01(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) or any Free Writing Prospectus in reliance upon and in conformity with written information with respect to such Holder furnished to the Issuers by such Holder expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto) or such Free Writing Prospectus; provided, however, that no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Shelf Registration Statement.

 

(c)        Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement.  An indemnifying party may participate at its own expense in the defense of such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  In no event shall the indemnifying party or parties be liable for the reasonable fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances.  No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Article 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

 

(d)        If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 4.01(a)(ii) effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 45 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

(e)        If the indemnification provided for in this Article 4 is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the Issuers and the Subsidiary Guarantors on the one hand and the Holders on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

 

The relative fault of the Issuers and the Subsidiary Guarantors on the one hand and the Holders on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Issuers and/or the Subsidiary Guarantors or the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Issuers, the Subsidiary Guarantors and the Holders agree that it would not be just and equitable if contribution pursuant to this Article 4 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Article 4.  The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Article 4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

 

No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

 

For purposes of this Article 4, each Person, if any, who controls a Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Holder, and each director of an Issuer or any Subsidiary Guarantor, and each Person, if any, who controls an Issuer or any Subsidiary Guarantor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Issuers or such Subsidiary Guarantor, as applicable.

 

ARTICLE 5
  MISCELLANEOUS

 

Section 5.01.  Rule 144A.  If the Issuers cease to be required to file reports under the 1934 Act, the Issuers covenant that they will upon the request of any Holder of Registrable Securities (a) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act, and (b) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or any similar rules or regulations hereafter adopted by the SEC.  Upon the request of any Holder of Registrable Securities, the Issuers will deliver to such Holder a written statement as to whether they have complied with such requirements.

 

Section 5.02.  No Inconsistent Agreements.  Subject to Section 5.06, neither the Issuers nor any Subsidiary Guarantor has entered into, and neither the Issuers nor any Subsidiary Guarantor will after the date of this Agreement enter into, any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof.  Subject to Section 5.06, the rights granted to the Holders hereunder do not and will not for the term of this Agreement in any way conflict with the rights granted to the holders of the Issuers’ or any Subsidiary Guarantor’s other issued and outstanding securities under any such agreements.

 

Section 5.03.  Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Issuers have obtained the written consent of the Majority Holders.

 

Section 5.04.  Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Issuers by means of a notice given in accordance with the provisions of this Section 5.04, which address, in the case of the Initial Holders, initially is the address set forth in

 

 

the relevant Exchange Agreement; and (b) if to the Issuers or any Subsidiary  Guarantor, initially at the Company’s address set forth in the Exchange Agreements, and thereafter at such other address of which notice is given in accordance with the provisions of this Section 5.04.

 

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

 

Copies of all such notices, demands, or other communications shall be concurrently delivered by the person giving the same to the Trustee under the Indenture, at the address specified in such Indenture.

 

Section 5.05.  Successor and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Indenture.  If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and such person shall be entitled to receive the benefits hereof.

 

Section 5.06.  Shareholders Agreement Controls.  To the extent that the provisions of Article 5 of the Shareholders Agreement apply to any Registrable Securities, the terms of this Agreement as they relate to such Registrable Securities shall be interpreted and are hereby deemed modified to the extent necessary to ensure that such terms are no more favorable to the Holders of such Registrable Securities than the terms set forth in Article 5 of the Shareholders Agreement.  In addition, if any Shelf Registration is or becomes a “Piggyback Registration” (as defined in the Shareholders Agreement), the terms of this Agreement as they relate to such Shelf Registration shall be interpreted and are hereby deemed modified to the extent necessary to ensure that such terms do not reduce the amount of the “Registrable Securities” of the “Shareholders” (as such terms are defined in the Shareholders Agreement), if any, included in such Shelf Registration.

 

Section 5.07.  Specific Enforcement.  Without limiting the remedies available to the Holders, the Issuers acknowledge that any failure by the Issuers to comply with their obligations under Sections 2.01 through 2.03 hereof may result in material irreparable injury to the Holders for which there is no adequate

 

 

remedy at law, that it would not be possible to measure damages for such injuries  precisely and that, in the event of any such failure, any Holder may obtain such relief as may be required to specifically enforce the Issuers’ obligations under Sections 2.01 through 2.03 hereof.

 

Section 5.08.  Restriction on Resales.  Until the expiration of one year after the original issuance of the Securities, the Issuers and the Subsidiary Guarantors will not resell any Securities that are “restricted securities” (as such term is defined under Rule 144(a)(3) under the 1933 Act) that have been reacquired by any of them, except pursuant to a registered offering.

 

Section 5.09.  Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

Section 5.10.  Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 5.11.  Governing Law.  THIS AGREEMENT, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

 

Section 5.12.  Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
SYMBION, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Teresa F.   Sparks
    
	
 
    	
 
    	
Name:
    	
Teresa F. Sparks
    
	
 
    	
 
    	
Title:
    	
Senior Vice   President of Finance and Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SYMBION HOLDINGS   CORPORATION
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Teresa F.   Sparks
    
	
 
    	
 
    	
Name:
    	
Teresa F. Sparks
    
	
 
    	
 
    	
Title:
    	
Senior Vice   President of Finance and Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
THE SUBSIDIARY GUARANTORS SET FORTH ON SCHEDULE A HERETO
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Teresa F.   Sparks
    
	
 
    	
 
    	
Name:
    	
Teresa F. Sparks
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

 

Confirmed and accepted as of the date first above written:

 

 

	
NAME OF INITIAL   HOLDER
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Schedule A

 

SUBSIDIARY GUARANTORS

 

Ambulatory Resource Centres Investment Company, LLC

Ambulatory Resource Centres of Florida, Inc.

Ambulatory Resource Centres of Massachusetts, Inc.

Ambulatory Resource Centres of Texas, Inc.

Ambulatory Resource Centres of Washington, Inc.

Ambulatory Resource Centres of Wilmington, Inc.

ARC Development Corporation

ARC Financial Services Corporation

ASC of Hammond, Inc

ASC of New Albany, LLC

Austin Surgical Holdings, LLC

Houston PSC - I, Inc.

Lubbock Surgicenter, Inc.

Medisphere Health Partners - Oklahoma City, Inc.

Medisphere Health Partners Management of Tennessee, Inc.

NeoSpine Surgery of Nashville, LLC

NeoSpine Surgery of Puyallup, LLC

NeoSpine Surgery, LLC

NSC Edmond, Inc.

Physicians Surgical Care, Inc.

Premier Ambulatory Surgery of Duncanville, Inc.

PSC Development Company, LLC

PSC of New York, L.L.C.

PSC Operating Company, LLC

Quahog Holding Company, LLC

SARC/Asheville, Inc.

SARC/Circleville, Inc.

SARC/DeLand, Inc.

SARC/Ft. Myers, Inc.

SARC/FW, Inc.

SARC/Georgia, Inc.

SARC/Jacksonville, Inc.

SARC/Kent, LLC

SARC/Knoxville, Inc.

SARC/Largo Endoscopy, Inc.

SARC/Largo, Inc.

SARC/Metairie, Inc

SARC/Providence, LLC

SARC/San Antonio, LLC

SARC/Savannah, Inc.

SARC/St. Charles, Inc.

SARC/Vincennes, Inc.

 

 

SARC/Worcester, Inc.

SMBI Gresham, LLC

SMBI Havertown, LLC

SMBI Idaho, LLC

SMBI Portsmouth, LLC

SMBIMS Birmingham, Inc.

SMBIMS Durango, LLC

SMBIMS Florida I, LLC

SMBIMS Greenville, LLC

SMBIMS Kirkwood, LLC

SMBIMS Novi, LLC

SMBIMS Orange City, LLC

SMBIMS Steubenville, Inc.

SMBIMS Tuscaloosa, Inc.

SMBIMS Wichita, LLC

SMBISS Beverly Hills, LLC

SMBISS Chesterfield, LLC

SMBISS Encino, LLC

SMBISS Irvine, LLC

SMBISS Thousand Oaks, LLC

SSC Provider Network, LLC

SurgiCare of DeLand, Inc.

Symbion Ambulatory Resource Centres, Inc.

SymbionARC Management Services, Inc.

SymbionARC Support Services, LLC

Texarkana Surgery Center GP, Inc.

UniPhy Healthcare of Johnson City VI, LLC

UniPhy Healthcare of Louisville, Inc.

UniPhy Healthcare of Maine I, Inc.

UniPhy Healthcare of Memphis I, LLC

UniPhy Healthcare of Memphis II, Inc.

UniPhy Healthcare of Memphis III, LLC

UniPhy Healthcare of Memphis IV, LLC

VASC, Inc.

Village Surgicenter, Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}]]