Exhibit 4.2
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HEALTHSOUTH CORPORATION
10.75% Senior Notes due 2016
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INDENTURE
Dated as of June 14, 2006
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THE BANK OF NOVA SCOTIA
TRUST COMPANY OF NEW YORK,
as Trustee
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CROSS-REFERNCE TABLE
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TIA Indenture
Section Section
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310(a)(1) ................................... 7.10
(a)(2) ................................... 7.10
(a)(3) ................................... N.A.
(a)(4) ................................... N.A.
(b) ................................... 7.08; 7.10
(c) ................................... N.A.
311(a) ................................... 7.11
(b) ................................... 7.11
(c) ................................... N.A.
312(a) ................................... 2.05
(b) ................................... 11.03
(c) ................................... 11.03
313(a) ................................... 7.06
(b)(1) ................................... 7.06
(b)(2) ................................... 7.06
(c) ................................... 11.02
(d) ................................... 7.06
314(a) ................................... 4.02; 4.12; 11.02
(b) ................................... N.A.
(c)(1) ................................... 11.04
(c)(2) ................................... 11.04
(c)(3) ................................... N.A.
(d) ................................... N.A.
(e) ................................... 11.05
(f) ................................... 4.13
315(a) ................................... 7.01
(b) ................................... 7.05; 11.02
(c) ................................... 7.01
(d) ................................... 7.01
(e) ................................... 6.11
316(a)(last sentence) ................................... 11.06
(a)(1)(A) ................................... 6.05
(a)(1)(B) ................................... 6.04
(a)(2) ................................... N.A.
(b) ................................... 6.07
317(a)(1) ................................... 6.08
(a)(2) ................................... 6.09
(b) ................................... 2.04
318(a) ................................... 11.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions..........................................7
SECTION 1.02. Other Definitions...................................37
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...38
SECTION 1.04. Rules of Construction...............................38
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating.....................................39
SECTION 2.02. Execution and Authentication........................39
SECTION 2.03. Registrar and Paying Agent..........................40
SECTION 2.04. Paying Agent to Hold Money in Trust.................41
SECTION 2.05. Holder Lists........................................41
SECTION 2.06. Transfer and Exchange...............................41
SECTION 2.07. Replacement Securities..............................42
SECTION 2.08. Outstanding Securities..............................42
SECTION 2.09. Temporary Securities................................42
SECTION 2.10. Cancelation.........................................43
SECTION 2.11. Defaulted Interest..................................43
SECTION 2.12. CUSIP Numbers and ISINs.............................43
SECTION 2.13. Issuance of Additional Securities...................43
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee..................................44
SECTION 3.02. Selection of Securities To Be Redeemed..............44
SECTION 3.03. Notice of Redemption................................44
SECTION 3.04. Effect of Notice of Redemption......................45
SECTION 3.05. Deposit of Redemption Price.........................45
SECTION 3.06. Securities Redeemed in Part.........................45
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities...............................46
SECTION 4.02. SEC Reports.........................................46
SECTION 4.03. Limitation on Indebtedness..........................47
SECTION 4.04. Limitation on Restricted Payments...................49
SECTION 4.05. Limitation on Restrictions on Distributions
from Restricted Subsidiaries.....................53
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock..54
SECTION 4.07. Limitation on Transactions with Affiliates..........58
SECTION 4.08. Change of Control...................................59
SECTION 4.09. Limitation on Liens.................................60
SECTION 4.10. Limitation on Sale/Leaseback Transactions...........60
SECTION 4.11. Future Guarantors...................................61
SECTION 4.12. Compliance Certificate..............................61
SECTION 4.13. Further Instruments and Acts........................61
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets...........61
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default...................................63
SECTION 6.02. Acceleration........................................65
SECTION 6.03. Other Remedies......................................65
SECTION 6.04. Waiver of Past Defaults.............................65
SECTION 6.05. Control by Majority.................................66
SECTION 6.06. Limitation on Suits.................................66
SECTION 6.07. Rights of Holders to Receive Payment................67
SECTION 6.08. Collection Suit by Trustee..........................67
SECTION 6.09. Trustee May File Proofs of Claim....................67
SECTION 6.10. Priorities..........................................67
SECTION 6.11. Undertaking for Costs...............................67
SECTION 6.12. Waiver of Stay or Extension Laws....................68
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee...................................68
SECTION 7.02. Rights of Trustee...................................69
SECTION 7.03. Individual Rights of Trustee........................70
SECTION 7.04. Trustee's Disclaimer................................70
SECTION 7.05. Notice of Defaults..................................70
SECTION 7.06. Reports by Trustee to Holders.......................71
SECTION 7.07. Compensation and Indemnity..........................71
SECTION 7.08. Replacement of Trustee..............................72
SECTION 7.09. Successor Trustee by Merger.........................72
SECTION 7.10. Eligibility; Disqualification.......................73
SECTION 7.11. Preferential Collection of Claims Against Company...73
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance....73
SECTION 8.02. Conditions to Defeasance............................74
SECTION 8.03. Application of Trust Money..........................75
SECTION 8.04. Repayment to Company................................75
SECTION 8.05. Indemnity for Government Obligations................75
SECTION 8.06. Reinstatement.......................................76
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders..........................76
SECTION 9.02. With Consent of Holders.............................77
SECTION 9.03. Compliance with Trust Indenture Act.................78
SECTION 9.04. Revocation and Effect of Consents and Waivers.......78
SECTION 9.05. Notation on or Exchange of Securities...............78
SECTION 9.06. Trustee to Sign Amendments..........................79
SECTION 9.07. Payment for Consent.................................79
ARTICLE 10
Subsidiary Guaranties
SECTION 10.01. Guaranties..........................................79
SECTION 10.02. Limitation on Liability.............................81
SECTION 10.03. Successors and Assigns..............................81
SECTION 10.04. No Waiver...........................................81
SECTION 10.05. Modification........................................81
SECTION 10.06. Release of Subsidiary Guarantor.....................81
SECTION 10.07. Contribution........................................82
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls........................82
SECTION 11.02. Notices.............................................83
SECTION 11.03. Communication by Holders with Other Holders.........83
SECTION 11.04. Certificate and Opinion as to Conditions Precedent..83
SECTION 11.05. Statements Required in Certificate or Opinion.......84
SECTION 11.06. When Securities Disregarded.........................84
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar........84
SECTION 11.08. Legal Holidays......................................84
SECTION 11.09. Governing Law.......................................84
SECTION 11.10. No Recourse Against Others..........................84
SECTION 11.11. Successors..........................................85
SECTION 11.12. Multiple Originals..................................85
SECTION 11.13. Table of Contents; Headings.........................85
Appendix A - Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit 2 - Form of Transferee Letter of Representation
Exhibit A - Form of Exchange Security or Private Exchange Security
Exhibit B - Form of Guaranty Agreement
INDENTURE dated as of June 14, 2006, among
HEALTHSOUTH CORPORATION, a Delaware corporation (the
"Company"), the SUBSIDIARY GUARANTORS (as defined
herein) party hereto and THE BANK OF NOVA SCOTIA
TRUST COMPANY OF NEW YORK, a New York trust company
(the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (a) the Company's 10.75%
Senior Notes due 2016 issued on the date hereof (the "Original Securities"),
(b) any Additional Securities (as defined herein) that may be issued from time
to time subsequent to the Issue Date (all such Securities in clauses (a) and
(b) being referred to collectively as the "Initial Securities"), (c) if and
when issued as provided in a Registration Rights Agreement (as defined in
Appendix A hereto (the "Appendix")), the Company's 10.75% Senior Notes due 2016
issued in a Registered Exchange Offer in exchange for any Initial Securities
(the "Exchange Securities") and (d) if and when issued as provided in a
Registration Rights Agreement, the Private Exchange Securities (as defined in
the Appendix) (together with the Initial Securities and any Exchange Securities
issued hereunder, the "Securities") issued in a Private Exchange:
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (1) any property or assets used in a Related
Business; (2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; or (3) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary described in clause (2) or (3)
above is primarily engaged in a Related Business.
"Additional Securities" means Securities issued under the terms of
this Indenture subsequent to the Issue Date, and in compliance with Sections
2.13 and 4.03, it being understood that any Securities issued in exchange for
or replacement of any Initial Security issued on the Issue Date shall not be an
Additional Security, including any such Securities issued pursuant to a
Registration Rights Agreement.
"Adjusted Treasury Rate" means, with respect to any redemption date,
(1) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after June 15, 2011, yields for the two
published maturities most closely corresponding to the Comparable Treasury
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Issue shall be determined and the Adjusted Treasury Rate shall be interpolated
or extrapolated from such yields on a straight line basis, rounding to the
nearest month) or (2) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per year equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such redemption
date, in each case calculated on the third Business Day immediately preceding
the redemption date, and in each case of (1) and (2), plus 0.50%.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. No
Person (other than the Company or any Subsidiary of the Company) in whom a
Receivables Entity makes an Investment in connection with a Qualified
Receivables Transaction shall be deemed to be an Affiliate of the Company or
any of its Subsidiaries solely by reason of such Investment.
"Applicable Premium" means, with respect to a Security at any
redemption date, the greater of (1) 1.00% of the principal amount of such
Security and (2) the excess of (A) the present value at such redemption date of
(i) the redemption price of such Security on June 15, 2011 (such redemption
price being set forth in paragraph 5 of such Security, exclusive of any accrued
interest), plus (ii) all required remaining scheduled interest payments due on
such Security through June 15, 2011 (but excluding accrued and unpaid interest
to the redemption date), computed using a discount rate equal to the Adjusted
Treasury Rate, over (B) the principal amount of such Security on such
redemption date.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary;
other than, in the case of clauses (1), (2) and (3) above,
(A) a disposition by a Restricted Subsidiary to the Company
or by the Company or a Restricted Subsidiary to a Restricted
Subsidiary;
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(B) for purposes of Section 4.06 only, a disposition that
constitutes a Restricted Payment (or would constitute a Restricted
Payment but for the exclusions from the definition thereof) that is
not prohibited by Section 4.04 or that constitutes a Permitted
Investment;
(C) a disposition of all or substantially all the assets of
the Company in accordance with Section 5.01;
(D) a disposition of assets with a Fair Market Value of less
than or equal to $2,000,000;
(E) sales of damaged, worn-out or obsolete equipment or
assets in the ordinary course of business that, in the Company's
reasonable judgment, are no longer either used or useful in the
business of the Company or its Subsidiaries;
(F) the sale or discount, in each case without recourse, of
accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof;
(G) sales of accounts receivable and related assets of the
type specified in the definition of "Qualified Receivables
Transaction" to a Receivables Entity;
(H) 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 Entity in a Qualified Receivables Transaction;
(I) 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 Company or any of its Restricted Subsidiaries;
(J) a disposition of cash or Temporary Cash Investments; and
(K) the creation of a Lien (but not the sale or other
disposition of the property subject to such Lien).
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate implicit in the lease, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended); provided, however, that if such Sale/Leaseback Transaction
results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby shall be determined in accordance with the definition of "Capital Lease
Obligation".
"Average Life" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing:
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(1) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment
of or redemption or similar payment with respect to such Indebtedness
multiplied by the amount of such payment by
(2) the sum of all such payments.
"Birmingham Hospital Transaction" means, collectively, the sale of the
Downtown Birmingham Medical Center and, to the extent required in connection
therewith, the acquisition of, and the buyout of leases with respect to, such
property and Sale/Leaseback Transactions with Healthcare Realty Trust
Incorporated and HR Acquisition of Alabama, Inc., in each case to the extent
consummated on or prior to September 10, 2006.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined
in accordance with GAAP; and the Stated Maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty. For purposes of Section 4.09, a Capital Lease Obligation
shall be deemed to be secured by a Lien on the property being leased.
"Capital Stock" of any Person means any and all shares, interests
(including partnership interests), rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Captive Insurance Subsidiary" means HCS, Ltd., a Cayman Islands
entity, and any successor to it, and any other Subsidiary formed for the
purpose of facilitating self-insurance programs of the Company and its
Subsidiaries.
"Change of Control" means the occurrence of any of the following
events:
(1) the Company becomes aware that any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or has become the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that for purposes of this clause (1) such person shall be
deemed to have "beneficial ownership" of all shares that any such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 50%
of the total voting power of the Voting Stock of the Company;
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(2) at any time during any period of up to 24 consecutive months,
commencing on the Issue Date, individuals who at the beginning of such
period constituted the Board of Directors (together with any new directors
whose election by such Board of Directors or whose nomination for election
by the shareholders of the Company was approved by a vote of a majority of
the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office;
(3) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution; or
(4) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company (determined on
a consolidated basis) to another Person, other than a transaction
following which (i) in the case of a merger or consolidation transaction,
holders of securities that represented 100% of the Voting Stock of the
Company immediately prior to such transaction (or other securities into
which such securities are converted as part of such merger or
consolidation transaction) own directly or indirectly at least a majority
of the voting power of the Voting Stock of the surviving Person in such
merger or consolidation transaction immediately after such transaction and
(ii) in the case of a sale of assets transaction, each transferee becomes
an obligor in respect of the Securities and a Subsidiary of the transferor
of such assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term of the Securities from the redemption date to June 15, 2011,
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of a maturity most nearly equal to June 15, 2011.
"Comparable Treasury Price" means, with respect to any redemption
date, if clause (2) of the Adjusted Treasury Rate is applicable, the average of
three, or if not possible, such lesser number as is obtained by the Company,
Reference Treasury Dealer Quotations for such redemption date.
"Consolidated Amortization Expense" means, for any Person for any
period, the amortization expense of such Person and its Restricted Subsidiaries
for such period (to the extent included in the computation of Consolidated Net
Income of such Person), determined on a consolidated basis in accordance with
GAAP, excluding amortization expense attributable to a prepaid item that was
paid in cash in a prior period.
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"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (a) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (b) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding
or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Indebtedness
(and the application of the proceeds thereof) as if such Indebtedness had
been Incurred on the first day of such period;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary had not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used
to repay, repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, EBITDA for
such period shall be reduced by an amount equal to EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to EBITDA (if
negative), directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to
the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company
and its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale);
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person that becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, that constitutes a hospital or other
health care-related business or all or substantially all of an operating
6
unit of a business, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition had occurred on the first day of such period; and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or
(4) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition had occurred on the first day of
such period.
For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness Incurred in connection therewith, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting Officer of
the Company (and shall include any applicable Pro Forma Cost Savings). If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness).
If any Indebtedness is incurred under a revolving credit facility and
is being given pro forma effect, the interest on such Indebtedness shall be
calculated based on the average daily balance of such Indebtedness for the four
fiscal quarters subject to the pro forma calculation to the extent that such
Indebtedness was incurred solely for working capital purposes.
"Consolidated Depreciation Expense" means, for any Person for any
period, the depreciation expense of such Person and its Restricted Subsidiaries
for such period (to the extent included in the computation of Consolidated Net
Income of such Person), determined on a consolidated basis in accordance with
GAAP.
"Consolidated Income Tax Expense" means, for any Person for any
period, the provision for taxes based on income and profits of such Person and
its Restricted Subsidiaries to the extent such provision for income taxes was
deducted in computing Consolidated Net Income of such Person for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
net of interest income of the Company and its consolidated Restricted
Subsidiaries (other than interest income of any Captive Insurance Subsidiary
that is a Restricted Subsidiary), plus, to the extent not included in the
calculation of total interest expense, and to the extent incurred by the
Company or its Restricted Subsidiaries, without duplication:
(1) interest expense attributable to Capital Lease Obligations;
7
(2) amortization of debt discount;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(6) net payments made or received pursuant to Hedging Obligations;
(7) dividends accrued in respect of all Disqualified Stock of the
Company and all Preferred Stock of any Restricted Subsidiary, in each case
held by Persons other than the Company or a Wholly Owned Subsidiary (other
than dividends payable solely in Capital Stock (other than Disqualified
Stock) of the Company); provided, however, that such dividends shall be
multiplied by a fraction the numerator of which is one and the denominator
of which is one minus the effective combined tax rate of the issuer of
such Preferred Stock (expressed as a decimal) for such period (as
estimated by the chief financial officer of the Company in good faith);
(8) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of)
the Company or any Restricted Subsidiary; and
(9) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the limitations
contained in clause (3) below); and
(B) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net
Income to the extent such loss has been funded with cash from the
Company or a Restricted Subsidiary;
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(2) any net income (or loss) of any Person acquired by the Company or
a Subsidiary in a pooling of interests transaction (or any transaction
accounted for in a manner similar to a pooling of interests) for any
period prior to the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that:
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
paid to another Restricted Subsidiary, to the limitation contained in
this clause); and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other disposition of
any assets of the Company, its consolidated Subsidiaries or any other
Person (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and
any gain (or loss) realized upon the sale or other disposition of any
Capital Stock of any Person;
(5) any net income or net losses from discontinued operations;
(6) extraordinary gains or losses; and
(7) the cumulative effect of a change in accounting principles,
in each case, for such period. Notwithstanding the foregoing, for the purposes
of Section 4.04 only, there shall be excluded from Consolidated Net Income any
repurchases, repayments or redemptions of Investments, proceeds realized on the
sale of Investments or return of capital to the Company or a Restricted
Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or
returns increase the amount of Restricted Payments permitted under clause
(a)(3)(D) or (a)(3)(E) of Section 4.04.
"Consolidated Tangible Assets" as of any date means the total assets
of the Company and its Restricted Subsidiaries (excluding any assets that would
be classified as "intangible assets" under GAAP) on a consolidated basis at
such date, as determined in accordance with GAAP, less (i) all write-ups
subsequent to the Issue Date in the book value of any asset owned by the
Company or any of its Restricted Subsidiaries and (ii) Investments in and
assets of Unrestricted Subsidiaries.
9
"Convertible Preferred Stock" means the Company's Series A Convertible
Perpetual Preferred Stock issued and outstanding on the Issue Date.
"Credit Agreement" means the Credit Agreement dated as of March 10,
2006, by and among the Company, as borrower, JPMorgan Chase Bank, N.A., as
administrative agent and the other lenders and agents party thereto from time
to time, together with the related documents thereto (including the term loans
and revolving loans thereunder, any guarantees and security documents), as
amended, extended, renewed, restated, supplemented or otherwise modified (in
whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any agreement (and
related document) governing Indebtedness incurred to Refinance, in whole or in
part, the borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Credit Agreement,
whether by the same or any other lender or group of lenders (including by means
of sales of debt securities to institutional investors).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement with respect to currency values.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Noncash Consideration" means noncash consideration
received by the Company or one of its Restricted Subsidiaries in connection
with an Asset Disposition that is designated by the Company as Designated
Noncash Consideration, less the amount of cash or cash equivalents received in
connection with a subsequent sale of such Designated Noncash Consideration,
which cash and cash equivalents shall be considered Net Available Cash received
as of such date and shall be applied pursuant to Section 4.06.
"Digital Hospital" means the planned 219-bed acute care hospital
located on Highway 280 in Birmingham, Alabama as replacement for the
HealthSouth Medical Center.
"Digital Hospital Transaction" means any sale or other related
disposition of real property (and any improvements thereon) involving the
Digital Hospital.
"Disqualified Stock" means, with respect to any Person, 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 at the option of the holder) or
upon the happening of any event:
(1) matures or is mandatorily redeemable (other than redeemable only
for Capital Stock of such Person which is not itself Disqualified Stock)
pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
10
(3) is mandatorily redeemable or must be purchased upon the occurrence
of certain events or otherwise, in whole or in part;
in each case on or prior to the date that is 91 days after the Stated Maturity
of the Securities; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to purchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
date that is 91 days after the Stated Maturity of the Securities shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are not more favorable to the
holders of such Capital Stock than the terms applicable to the Securities under
Sections 4.06 and 4.08.
The amount of any Disqualified Stock that does not have a fixed
redemption, repayment or repurchase price shall be calculated in accordance
with the terms of such Disqualified Stock as if such Disqualified Stock were
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
however, that if such Disqualified Stock could not be required to be redeemed,
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price shall be the book value of such Disqualified
Stock as reflected in the most recent financial statements of such Person. The
Convertible Preferred Stock, based on the terms thereof in effect on the Issue
Date, shall not be Disqualified Stock.
"EBITDA" of any Person for any period means Consolidated Net Income of
such Person for such period plus, without duplication, the sum for such Person
of the following to the extent deducted in calculating Consolidated Net Income
for such period:
(1) Consolidated Income Tax Expense,
(2) Consolidated Depreciation Expense,
(3) Consolidated Amortization Expense,
(4) Consolidated Interest Expense,
(5) all other non-cash items or non-recurring non-cash items reducing
Consolidated Net Income of such Person and its Subsidiaries, determined on
a consolidated basis in accordance with GAAP (including non-cash charges
incurred as a result of the application of SFAS No. 123R); provided that
cash expenditures made in respect of items to which the charges referred
to in this clause (5) relate in an aggregate amount in excess of
$10,000,000 for any period of four consecutive fiscal quarters shall be
deducted in determining EBITDA for the period during which such
expenditures are made,
(6) any restructuring charges in respect of legal fees associated with
the government, class-action and shareholder derivative litigation
described in the Company's Report on Form 10-K for the fiscal year ended
December 31, 2005,
11
(7) fees, costs and expenses related to the Recapitalization
Transactions,
(8) any losses from discontinued operations and closed locations,
(9) costs and expenses related to the settlement of the Shareholder
Litigation, and
(10) charges in respect of professional fees for reconstruction and
restatement of financial statements (including matters related to internal
controls and documentation) that relate to the fiscal years ended December
31, 2000, 2001, 2002, 2003, 2004 and 2005 and the fiscal quarters
occurring during such fiscal years,
in each case determined on a consolidated basis in accordance with GAAP, less
all unusual non-cash items or non-recurring non-cash items to the extent
increasing Consolidated Net Income of such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, in each case for
such period. Notwithstanding the foregoing, the provision for taxes based on
the income or profits of, and the depreciation and amortization and non-cash
charges of, a Restricted Subsidiary shall be added to Consolidated Net Income
to compute EBITDA only to the extent (and in the same proportion, including by
reason of minority interests) that the net income or loss of such Restricted
Subsidiary was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Eligible Indebtedness" means any Indebtedness other than:
(1) Indebtedness in the form of, or represented by, bonds (other than
surety bonds, indemnity bonds, performance bonds or bonds of a similar
nature) or other securities or any Guarantee thereof; and
(2) Indebtedness that is, or may be, quoted, listed or purchased and
sold on any stock exchange, automated trading system or over-the-counter
or other securities market (including, without prejudice to the generality
of the foregoing, the market for securities eligible for resale pursuant
to Rule 144A under the Securities Act).
"Equity Offering" means any public or private sale of Capital Stock
(other than Disqualified Stock) of the Company, other than public offerings
with respect to the Company's common stock registered on Form S-8 under the
Securities Act and other than issuances to any Subsidiary of the Company.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, with respect to any asset or property, the
price that could be negotiated in an arm's-length, free market transaction, for
cash, between a willing and able buyer and an unaffiliated willing seller,
neither of whom is under undue pressure or compulsion to complete the
12
transaction, as such price is determined in good faith by (1) the Chief
Financial Officer, the Treasurer or the Chief Accounting Officer of the Company
(unless otherwise provided in this Indenture) for transactions valued at, or
below, $10,000,000, or (2) the Board of Directors of the Company (unless
otherwise provided in this Indenture) for transactions valued in excess of
$10,000,000.
"Floating Rate Exchange Securities" means the "Exchange Securities"
(as such term is used and defined in the Floating Rate Securities Indenture)
excluding any "Additional Securities" (as such term is used and defined in the
Floating Rate Securities Indenture).
"Floating Rate Securities" means the Company's Floating Rate Senior
Notes due 2014.
"Floating Rate Securities Indenture" means the Indenture dated as of
June 14, 2006, among the Company, the Subsidiary Guarantors and the Trustee,
relating to the Floating Rate Securities.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in:
(1) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting
Standards Board;
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
13
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranty Agreement" means a supplemental indenture, in substantially
the form of Exhibit B hereto or another form satisfactory to the Trustee,
pursuant to which a Subsidiary Guarantor guarantees the Company's obligations
with respect to the Securities on the terms provided for in this Indenture.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness of a Person existing at
the time such Person becomes a Restricted Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Restricted Subsidiary. The term "Incurrence"
when used as a noun shall have a correlative meaning. Solely for purposes of
determining compliance with Section 4.03:
(1) amortization of debt discount or the accretion of principal with
respect to a non-interest bearing or other discount security;
(2) the payment of regularly scheduled interest in the form of
additional Indebtedness of the same instrument or the payment of regularly
scheduled dividends on Capital Stock in the form of additional Capital
Stock of the same class and with the same terms; and
(3) the obligation to pay a premium in respect of Indebtedness arising
in connection with the issuance of a notice of redemption or making of a
mandatory offer to purchase such Indebtedness
will not be deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale/Leaseback Transactions entered into by such
Person;
14
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention
agreement (but excluding any accounts payable or other liability to trade
creditors arising in the ordinary course of business);
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, bankers' acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (1)
through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of
such Person or, with respect to any Preferred Stock of any Subsidiary of
such Person, the principal amount of such Preferred Stock to be determined
in accordance with this Indenture (but excluding, in each case, any
accrued dividends);
(6) all obligations of the type referred to in clauses (1) through (5)
of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through (6)
of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the Fair Market
Value of such property or assets and the amount of the obligation so
secured; and
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
Notwithstanding the foregoing, in connection with the purchase by the
Company or any Restricted Subsidiary of any business, the term "Indebtedness"
will exclude indemnification, purchase price adjustment, holdback and
contingency payment obligations to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing;
provided, however, that, at the time of closing, the amount of any such payment
is not determinable and, to the extent such payment thereafter becomes fixed
and determined, the amount is paid within 60 days thereafter.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all obligations as described above;
provided, however, that in the case of Indebtedness sold at a discount, the
amount of such Indebtedness at any time will be the accreted value thereof at
such time.
15
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Qualified Party" means an investment banking firm,
accounting firm or appraisal firm of national standing; provided, however, that
such firm is not an Affiliate of the Company.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement with
respect to exposure to interest rates.
"Interim Loan Agreement" means the Interim Loan Agreement dated as of
March 10, 2006, among the Company, the subsidiary guarantors named therein, the
lenders named therein and the administrative agent named therein.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. If the Company or any Restricted
Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person
that is a Restricted Subsidiary such that, after giving effect thereto, such
Person is no longer a Restricted Subsidiary, any Investment by the Company or
any Restricted Subsidiary in such Person remaining after giving effect thereto
will be deemed to be a new Investment at such time. The acquisition by the
Company or any Restricted Subsidiary of a Person that holds an Investment in a
third Person shall be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person at such time. Except as otherwise
provided for herein, the amount of an Investment shall be its Fair Market Value
at the time the Investment is made and without giving effect to subsequent
changes in value.
For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 4.04:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment"
in an Unrestricted Subsidiary equal to an amount (if positive) equal to
(A) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (B) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of
such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its Fair Market Value at the time of such transfer.
16
"Issue Date" means June 14, 2006.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor to
its rating agency business.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other non-cash form), in each case net of:
(1) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred (including legal, accounting and investment
banking fees and commissions), and all Federal, state, provincial, foreign
and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition;
(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition; and
(5) any portion of the purchase price from an Asset Disposition placed
in escrow, whether as a reserve for adjustment of the purchase price, for
satisfaction of indemnities in respect of such Asset Disposition or
otherwise in connection with that Asset Disposition; provided, however,
that upon the termination of that escrow, Net Available Cash shall be
increased by any portion of funds in the escrow that are released to the
Company or any Restricted Subsidiary.
17
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock or Indebtedness, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Obligations" means, with respect to any Indebtedness, all obligations
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated June 9,
2006, and used in connection with the offering of the Original Securities.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Treasurer or the Secretary of
the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that shall, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person if, as a result of such Investment, such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's primary business is a
Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
18
(6) loans or advances to officers, directors and employees made in the
ordinary course of business of the Company or such Restricted Subsidiary;
(7) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents the non-cash
portion of the consideration received for (A) an Asset Disposition as
permitted pursuant to Section 4.06 or (B) a disposition of assets not
constituting an Asset Disposition;
(9) any Person where such Investment was acquired by the Company or
any of its Restricted Subsidiaries (A) in exchange for any other
Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of a foreclosure by
the Company or any of its Restricted Subsidiaries with respect to any
secured Investment or other transfer of title with respect to any secured
Investment in default;
(10) any Person to the extent such Investments consist of prepaid
expenses, negotiable instruments held for collection and lease, utility
and workers' compensation, performance and other similar deposits made in
the ordinary course of business by the Company or any Restricted
Subsidiary;
(11) any Person to the extent such Investments consist of Hedging
Obligations otherwise permitted under Section 4.03;
(12) any Person to the extent such Investment exists on the Issue
Date, and any extension, modification or renewal of any such Investments
existing on the Issue Date, but only to the extent not involving
additional advances, contributions or other Investments of cash or other
assets or other increases thereof (other than as a result of the accrual
or accretion of interest or original issue discount or the issuance of
pay-in-kind securities, in each case, pursuant to the terms of such
Investment as in effect on the Issue Date);
(13) any Person arising from the transfer of assets made pursuant to
the Digital Hospital Transaction;
(14) a Receivables Entity, or any Investment by a Receivables Entity
in any other Person in connection with a Qualified Receivables
Transaction, including Investments of funds held in accounts permitted or
required by the arrangements governing such Qualified Receivables
Transaction or any related Indebtedness; provided, however, that any
Investment in a Receivables Entity is in the form of a purchase money
note, contribution of additional receivables or an equity interest; or
19
(15) Persons to the extent such Investments, when taken together with
all other Investments made pursuant to this clause (15) and outstanding on
the date such Investment is made, do not exceed 7.5% of Consolidated
Tangible Assets, as determined based on the consolidated balance sheet of
the Company as of the end of the most recent fiscal quarter ending at
least 45 days prior thereto.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's compensation
laws, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, performance bonds or
obligations of a like nature or deposits as security for contested taxes
or import duties or for the payment of rent, in each case Incurred in the
ordinary course of business;
(2) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect to which such Person
shall then be proceeding with an appeal or other proceedings for review
and Liens arising solely by virtue of any statutory or common law
provision relating to banker's Liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, however, that (A) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board and (B) such deposit
account is not intended by the Company or any Restricted Subsidiary to
provide collateral to the depository institution;
(3) Liens for taxes, assessments or other governmental charges or
claims, in each case not yet subject to penalties for non-payment or which
are being contested in good faith by appropriate proceedings;
(4) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in
the ordinary course of its business; provided, however, that such letters
of credit do not constitute Indebtedness;
(5) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes,
or zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the
ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the
operation of the business of such Person;
20
(6) Liens securing Indebtedness Incurred to finance the construction,
purchase or lease of, or repairs, improvements or additions to, property,
plant or equipment of such Person; provided, however, that the Lien may
not extend to any other property owned by such Person or any of its
Restricted Subsidiaries at the time the Lien is Incurred (other than
assets and property affixed or appurtenant thereto), and the Indebtedness
(other than any interest thereon) secured by the Lien may not be Incurred
more than 180 days after the later of the acquisition, completion of
construction, repair, improvement, addition or commencement of full
operation of the property subject to the Lien;
(7) Liens to secure (i) Indebtedness permitted pursuant to Section
4.03(b)(1) and (ii) Attributable Debt in respect of Specified
Sale/Leaseback Transactions; provided, however, that the Liens referred to
in this clause (ii) may not extend to any assets or property other than
the assets and property subject to the Specified Sale/Leaseback
Transaction;
(8) Liens existing on the Issue Date (other than Liens referred to in
the foregoing clause (7)(i));
(9) Liens on property or shares of Capital Stock of another Person at
the time such other Person becomes a Subsidiary of such Person; provided,
however, that the Liens may not extend to any other property owned by such
Person or any of its Restricted Subsidiaries (other than assets and
property affixed or appurtenant thereto);
(10) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means of
a merger or consolidation with or into such Person or a Subsidiary of such
Person; provided, however, that the Liens may not extend to any other
property owned by such Person or any of its Restricted Subsidiaries (other
than assets and property affixed or appurtenant thereto);
(11) Liens securing Indebtedness or other obligations of a Subsidiary
of such Person owing to such Person or a Wholly Owned Subsidiary of such
Person;
(12) Liens securing Hedging Obligations so long as such Hedging
Obligations are permitted to be Incurred under this Indenture;
(13) any Lien on accounts receivable and related assets of the types
specified in the definition of "Qualified Receivables Transaction"
incurred in connection with a Qualified Receivables Transaction;
(14) Liens in favor of the Company or the Subsidiary Guarantors;
(15) leases, subleases, licenses or sublicenses granted to third
parties entered into in the ordinary course of business which do not
materially interfere with the conduct of the business of the Company and
the Restricted Subsidiaries and which do not secure any Indebtedness;
21
(16) Liens securing judgments, decrees, orders or awards for the
payment of money not constituting an Event of Default in respect of which
the Company shall in good faith be prosecuting an appeal or proceedings
for review, which appeal or proceedings shall not have been finally
terminated, or in respect of which the period within which such appeal or
proceedings may be initiated shall not have expired;
(17) Liens to secure any Refinancing (or successive Refinancings) as a
whole, or in part, of any Indebtedness secured by any Lien referred to in
the foregoing clause (6), (7)(ii), (8), (9) or (10); provided, however,
that:
(A) such 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
Lien (plus improvements and accessions to, such property or proceeds
or distributions thereof); and
(B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (i) the outstanding
principal amount or, if greater, committed amount of the Indebtedness
described under clause (6), (7)(ii), (8), (9) or (10) at the time the
original Lien became a Permitted Lien and (ii) an amount necessary to
pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement; and
(18) other Liens securing Indebtedness to the extent such
Indebtedness, when taken together with all other Indebtedness secured by
Liens Incurred pursuant to this clause (18) and outstanding on the date
such other Lien is Incurred, does not exceed 5% of Consolidated Tangible
Assets, as determined based on the consolidated balance sheet of the
Company as of the end of the most recent fiscal quarter ending at least 45
days prior thereto.
Notwithstanding the foregoing, "Permitted Liens" will not include any
Lien described in clause (6), (9) or (10) above to the extent such Lien applies
to any Additional Assets acquired directly or indirectly from Net Available
Cash pursuant to Section 4.06. For purposes of this definition, the term
"Indebtedness" shall be deemed to include interest on such Indebtedness.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
22
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs that were
(1) directly attributable to an asset acquisition and calculated on a
basis that is consistent with Regulation S-X under the Securities Act in
effect and applied as of the Issue Date, or
(2) implemented by the business that was the subject of any such asset
acquisition within the six months prior to or following the date of the
asset acquisition and that are supportable and quantifiable by the
underlying accounting records of such business,
as if, in the case of each of clause (1) and (2), all such reductions in costs
had been effected as of the beginning of such period.
"Purchase Money Indebtedness" means Indebtedness (1) consisting of the
deferred purchase price of property, conditional sale obligations, obligations
under any title retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds or similar Indebtedness, in
each case where the maturity of such Indebtedness does not exceed the
anticipated useful life of the asset being financed, and (2) Incurred to
finance the acquisition by the Company or a Restricted Subsidiary of such
asset, including additions and improvements, in the ordinary course of
business, provided, however, that any Lien arising in connection with any such
Indebtedness shall be limited to the specific asset being financed or, in the
case of real property or fixtures, including additions and improvements, the
real property on which such asset is attached; provided, further, however, that
such Indebtedness is Incurred within 180 days after such acquisition of such
assets.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to:
(1) a Receivables Entity (in the case of a transfer by the Company or
any of its Restricted Subsidiaries) or
(2) any other Person (in the case of a transfer by a Receivables
Entity),
or may grant a security interest in, any accounts receivable (whether now
existing or arising in the future) of the Company or any of its Restricted
Subsidiaries, and any assets related thereto, including all collateral securing
such accounts receivable, all contracts and all Guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts receivable
and other assets which are customarily transferred or in respect of which
security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable; provided, however,
23
that the financing terms, covenants, termination events and other provisions
thereof shall be market terms (as determined in good faith by the chief
financial officer of the Company).
The grant of a security interest in any accounts receivable of the
Company or any of its Restricted Subsidiaries to secure Indebtedness permitted
pursuant to Section 4.03(b)(1) shall not be deemed a Qualified Receivables
Transaction.
"Quotation Agent" means one of the Reference Treasury Dealers selected
by the Company.
"Receivables Entity" means (a) a Wholly Owned Subsidiary of the
Company that is designated by the Board of Directors (as provided below) as a
Receivables Entity or (b) another Person engaging in a Qualified Receivables
Transaction with the Company, which Person engages in the business of the
financing of accounts receivable, and in either of clause (a) or (b):
(1) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of such entity
(A) is Guaranteed by the Company or any Subsidiary of the
Company (excluding Guarantees of obligations (other than the principal
of, and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings),
(B) is recourse to or obligates the Company or any Subsidiary
of the Company in any way (other than pursuant to Standard
Securitization Undertakings), or
(C) subjects any property or asset of the Company or any
Subsidiary of the Company, directly or indirectly, contingently or
otherwise, to the satisfaction thereof (other than pursuant to
Standard Securitization Undertakings);
(2) the entity is not an Affiliate of the Company or is an entity with
which neither the Company nor any Subsidiary of the Company has any
material contract, agreement, arrangement or understanding other than on
terms that the Company reasonably believes to be no less favorable to the
Company or such Subsidiary than those that might be obtained at the time
from Persons that are not Affiliates of the Company; and
(3) is an entity to which neither the Company nor any Subsidiary of
the Company has any obligation to maintain or preserve such entity's
financial condition or cause such entity to achieve certain levels of
operating results.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
24
"Reference Treasury Dealer" means each of Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, Citigroup Global Markets Inc. and X.X. Xxxxxx
Securities Inc. and their respective successors and assigns.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the Company, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the Company by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day immediately preceding such redemption
date.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, purchase, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Recapitalization Transactions" means the offering of Convertible
Preferred Stock completed on or about March 7, 2006, the borrowing of loans
under the Interim Loan Agreement and the Credit Agreement on March 10, 2006,
and the use of the proceeds thereof to (A) complete the tender offer for the
Company's then-existing senior notes and senior subordinated notes and (B)
prepay the loans under, and terminate, the Company's then-existing senior
secured credit agreement, senior subordinated credit agreement and term loan
agreement.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being Refinanced;
(3) such Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding (plus fees and expenses, including any premium and defeasance
costs) under the Indebtedness being Refinanced; and
(4) if the Indebtedness being Refinanced is subordinated in right of
payment to the Securities, such Refinancing Indebtedness is subordinated
in right of payment to the Securities at least to the same extent as the
Indebtedness being Refinanced;
25
provided, further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that is not a Subsidiary Guarantor that Refinances
Indebtedness of the Company or a Subsidiary Guarantor or (B) Indebtedness of
the Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business in which the Company or any of
the Restricted Subsidiaries was engaged on the Issue Date and any business
related, ancillary or complementary to such business.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its
Capital Stock (other than (A) dividends or distributions payable solely in
its Capital Stock (other than Disqualified Stock), (B) dividends or
distributions payable solely to the Company or a Restricted Subsidiary and
(C) pro rata dividends or other distributions made by a Subsidiary that is
not a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation));
(2) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of any Capital Stock of the Company
held by any Person (other than by a Restricted Subsidiary) or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than by a Restricted Subsidiary), including in connection
with any merger or consolidation and including the exercise of any option
to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations of the Company or any Subsidiary Guarantor (other than (A)
from the Company or a Restricted Subsidiary or (B) the purchase,
repurchase, redemption, defeasance or other acquisition or retirement of
Subordinated Obligations purchased in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each case due
within one year of the date of such purchase, repurchase, redemption,
defeasance or other acquisition or retirement); or
(4) the making of any Investment (other than a Permitted Investment)
in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
26
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter
acquired by the Company or a Restricted Subsidiary whereby the Company or a
Restricted Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person, other than leases between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Senior Indebtedness" means with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the Issue Date
or thereafter Incurred; and
(2) all other Obligations of such Person (including interest accruing
on or after the filing of any petition in bankruptcy or for reorganization
relating to such Person whether or not post-filing interest is allowed in
such proceeding) in respect of Indebtedness described in clause (1) above
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such Indebtedness or other obligations are subordinate in right
of payment to the Securities or the Subsidiary Guaranty of such Person, as the
case may be; provided, however, that Senior Indebtedness shall not include:
(A) any obligation of such Person to the Company or any
Subsidiary;
(B) any liability for Federal, state, local or other taxes
owed or owing by such Person;
(C) any accounts payable or other liability to trade
creditors arising in the ordinary course of business;
(D) any Indebtedness or other Obligation of such Person which
is subordinate or junior in any respect to any other Indebtedness or
other Obligation of such Person; or
(E) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Shareholder Litigation" means the federal securities class actions
and the derivative actions brought against the Company and/or certain of its
former directors and officers and certain other parties in the United States
District Court for the Northern District of Alabama and the Circuit Court in
Jefferson County, Alabama relating to financial reporting and related activity
that occurred at the Company during periods ended in March 2003.
27
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Specified Property" means the real property and improvements thereon
for (a) rehabilitation hospitals in Fredericksburg, Virginia; Sarasota, Florida
and Petersburg, Virginia, (b) long-term acute care facilities in Sarasota,
Florida; Huntsville, Alabama; Kansas City, Missouri; Tucson, Arizona and
Charlottesville, Virginia and (c) surgery centers in Des Moines, Iowa and
Joliet, Illinois, in each case under construction or anticipated to be
constructed as of the Issue Date.
"Specified Sale/Leaseback Transaction" means (A) a Sale/Leaseback
Transaction consisting of a sale or other transfer of (i) a Specified Property
or (ii) any other real property and improvements thereon identified after the
Issue Date prior to the acquisition or construction thereof by written notice
from the Company to the Trustee (which notice shall also contain a reasonably
detailed summary of the construction and other improvements that the Company
intends to make on the applicable real property), in each case to a real estate
investment trust or other Person within 180 days after completion of all
principal construction and improvements thereon and the simultaneous lease of
such property by such real estate investment trust or other Person to the
Company or a Restricted Subsidiary and (B) a Sale/Leaseback Transaction that is
a Birmingham Hospital Transaction.
"Standard & Poor's" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor to its rating agency business.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company that, taken as a whole, are customary in an accounts
receivable transaction.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or
thereafter Incurred) which is subordinate or junior in right of payment to the
Securities or a Subsidiary Guaranty of such Person, as the case may be,
pursuant to a written agreement to that effect.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or
controlled, directly or indirectly, by:
(1) such Person;
28
(2) such Person and one or more Subsidiaries of such Person; or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Subsidiary of the Company that
executes this Indenture as a guarantor on the Issue Date and each other
Subsidiary of the Company that thereafter guarantees the Securities pursuant to
the terms of this Indenture.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to the Securities.
"Syndication" means the sale of partnership or other equity interests
in Subsidiaries of the Company or other Persons controlled by the Company that
own or operate surgery, diagnostic or other health care facilities to (i)
participating physicians, radiologists and other specialists, (ii) professional
corporations and other legal entities owned or controlled by such participating
physicians, radiologists and other specialists and (iii) participating
hospitals and other health care providers. For purposes of this definition,
"controlled" shall have the meaning set forth in the definition of "Affiliate."
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in demand and time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any State thereof or any
foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $250,000,000 (or the foreign currency equivalent thereof) and
has outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
(4) investments in commercial paper, maturing not more than 270 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Moody's or "A-1" (or
higher) according to Standard and Poor's;
29
(5) investments in securities issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard & Poor's or "A2" by Moody's;
(6) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than one year, in
each case having a rating of, or evidencing the full recourse obligation
of a person whose senior debt is rated, at least "A" by Standard & Poor's
and at least "A2" by Moody's; and
(7) investments in money market funds that invest substantially all
their assets in securities of the types described in clauses (1) through
(6) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the Issue Date.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors
in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital
Stock or Indebtedness of, or holds any Lien on any property of, the Company or
any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.04.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (A) the Company could Incur $1.00 of additional
Indebtedness under Section 4.03(a) and (B) no Default shall have occurred and
be continuing. Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
30
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or one or more other Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"............................................ 4.07(a)
"Appendix"......................................................... Preamble
"Bankruptcy Law"................................................... 6.01
"Change of Control Offer".......................................... 4.08(b)
"covenant defeasance option"....................................... 8.01(b)
"Custodian"........................................................ 6.01
"Definitive Securities"............................................ Appendix A
"Event of Default"................................................. 6.01
"Exchange Securities".............................................. Preamble
"Global Securities"................................................ Appendix A
"Guaranteed Obligations"........................................... 10.01
"Initial Lien"..................................................... Preamble
"Initial Securities"............................................... 4.09
"legal defeasance option".......................................... 8.01(b)
"Offer"............................................................ 4.06(b)
"Offer Amount"..................................................... 4.06(c)
"Offer Period"..................................................... 4.06(c)
"Original Securities".............................................. Preamble
"Paying Agent"..................................................... 2.03
"Private Exchange"................................................. Appendix A
"Private Exchange Securities"...................................... Appendix A
"Purchase Date".................................................... 4.06(c)
"Registration Rights Agreement".................................... Appendix A
"Registered Exchange Offer"........................................ Appendix A
31
Defined in
Term Section
---- -------
"Registrar"........................................................ 2.03
"Securities"....................................................... Preamble
"Securities Custodian"............................................. Appendix A
"Successor Company"................................................ 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Subsidiary
Guaranties.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the
Subsidiary Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(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;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
32
(g) secured Indebtedness shall not be deemed to be subordinate or
junior to any other secured Indebtedness merely because it has a junior
priority with respect to the same collateral;
(h) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(i) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
(j) all references to the date the Securities were originally issued
shall refer to the Issue Date.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Appendix, which is hereby incorporated in and expressly made a
part of this Indenture. The Initial Securities and the Trustee's certificate of
authentication thereto, shall be substantially in the form of Exhibit 1 to the
Appendix, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities, the Private Exchange Securities and the
Trustee's certificate of authentication thereto shall be substantially in the
form of Exhibit A, which is hereby incorporated in and expressly made a part of
this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The Securities shall be issuable only in
registered form without interest coupons and only in denominations of $1,000
and integral multiples thereof. The terms of the Securities set forth in the
Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall sign
the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
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The Trustee shall authenticate and make available for delivery
Securities as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.
On the Issue Date, the Trustee shall authenticate and deliver
$625,000,000 of 10.75% Senior Notes Due 2016 and, at any time and from time to
time thereafter, the Trustee shall authenticate and deliver Securities for
original issue in an aggregate principal amount specified in such order, in
each case upon a written order of the Company signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated and, in the case of an issuance of Additional Securities pursuant
to Section 2.13 after the Issue Date, shall certify that such issuance is in
compliance with Section 4.03.
SECTION 2.03. Registrar and Paying Agent. (a) The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent, and the
term "Registrar" includes any co-registrars. The Company initially appoints the
Trustee as (i) Registrar and Paying Agent in connection with the Securities and
(ii) the Securities Custodian with respect to the Global Securities.
(b) The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall, to the extent
that it is capable, act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. The Company or any Wholly Owned
Subsidiary incorporated or organized within The United States of America may
act as Paying Agent, Registrar, co-registrar or transfer agent.
(c) The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee; provided, however,
that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered
into by the Company and such successor Registrar or Paying Agent, as the case
may be, and delivered to the Trustee or (ii) notification to the Trustee that
the Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above.
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SECTION 2.04. Paying Agent to Hold Money in Trust. Prior to 10:00
a.m., New York City time, on each due date of the principal of and interest on
any Security, the Company shall deposit with the Paying Agent (or if the
Company or a Wholly Owned Subsidiary is acting as Paying Agent, segregate and
hold in trust for the benefit of the Persons entitled thereto) a sum sufficient
to pay such principal and interest when so becoming due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that the
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal of and interest on
the Securities, and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or a Wholly Owned Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.05. 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 Holders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer and in compliance with the Appendix. When a
Security is presented to the Registrar or a co-registrar with a request to
register a transfer, the Registrar shall register the transfer as requested if
the requirements of this Indenture and Section 8-401(1) of the Uniform
Commercial Code are met. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met.
To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.06, 4.08 and 9.05). The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Securities selected for redemption in accordance with the terms of this
Indenture (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or any Securities for a period of 15 days
before a selection of Securities to be redeemed or 15 days before an interest
payment date.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Subsidiary Guarantors, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the Person in whose
name a Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and (subject to paragraph 2 of the
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Securities) interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
any Subsidiary Guarantor, the Trustee, the Paying Agent or the Registrar shall
be affected by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this
Section as not outstanding. Subject to Section 11.06, a Security does not cease
to be outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser (as defined in
Section 8-303 of the Uniform Commercial Code).
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities. In the event that Definitive
Securities are to be issued under the terms of this Indenture, until such
Definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Securities and deliver them in exchange for temporary
Securities upon surrender of such temporary Securities at the office or agency
of the Company, without charge to the Holder.
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SECTION 2.10. Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancelation and shall deliver a certificate of such
destruction to the Company. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancelation.
The Trustee shall not authenticate Securities in place of canceled Securities
other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, the Company shall pay the defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the Persons who are
Holders on a subsequent special record date. The Company shall fix or cause to
be fixed any such special record date and payment date and, at least 10 days
before such special record date, shall mail or cause to be mailed to each
Holder, with a copy to the Trustee, a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers and ISINs. The Company in issuing the
Securities may use "CUSIP" numbers, ISINs and "Common Code" numbers (in each
case if then generally in use) and, if so, the Trustee shall use "CUSIP"
numbers, ISINs and "Common Code" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers. The Company shall advise the Trustee in writing of
any change in any "CUSIP" numbers, ISINs or "Common Code" numbers applicable to
the Securities.
SECTION 2.13. Issuance of Additional Securities. After the Issue Date,
the Company shall be entitled, subject to its compliance with Section 4.03, to
issue Additional Securities under this Indenture, which Securities shall have
identical terms as the Initial Securities issued on the Issue Date, other than
with respect to the date of issuance and issue price, first payment of interest
and rights under the Registration Rights Agreement dated June 14, 2006. All the
Securities issued under this Indenture shall be treated as a single class for
all purposes of this Indenture, including waivers, amendments, redemptions and
offers to purchase.
With respect to any Additional Securities, the Company shall set forth
in a resolution of the Board of Directors and an Officers' Certificate, a copy
of each of which shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Securities to be
authenticated and delivered pursuant to this Indenture and the provision
of Section 4.03 that the Company is relying on to issue such Additional
Securities;
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(2) the issue price, the issue date, the CUSIP number and the ISIN of
such Additional Securities; provided, however, that no Additional
Securities may be issued at a price that would cause such Additional
Securities to have "original issue discount" within the meaning of Section
1273 of the Code; and
(3) whether such Additional Securities shall be Initial Securities or
shall be issued in the form of Exchange Securities as set forth in Exhibit
A.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of
Securities to be redeemed.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply
with the conditions herein. Any such notice of redemption may be canceled at
any time prior to such notice being mailed to any Holder and, upon such
cancelation, shall be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed on a pro rata basis to the extent practicable. The Trustee shall
make the selection from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the principal
amount of Securities that have denominations larger than $1,000. Securities and
portions of them the Trustee selects shall be in principal amounts of $1,000 or
a whole multiple of $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption. The Trustee shall notify the Company promptly of the Securities
or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
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(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) the CUSIP number or ISIN, if any, printed on the Securities being
redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, ISIN or "Common Code" number, if any, listed in such
notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed to Holders, Securities called for redemption become due
and payable on the redemption date and at the redemption price stated in the
notice. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price stated in the notice, plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date), and
such Securities shall be canceled by the Trustee. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m., New
York City time, on the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest on all Securities or portions thereof
to be redeemed on that date other than Securities or portions of Securities
called for redemption that have been delivered by the Company to the Trustee
for cancelation. On and after the redemption date, interest shall cease to
accrue on Securities or portions thereof called for redemption so long as the
Company has deposited with the Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) funds
sufficient to pay the principal of, plus accrued and unpaid interest on, the
Securities to be redeemed.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
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ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Whether or not the Company is subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall file with the SEC (subject to the next sentence), and provide the
Trustee and Holders with, such annual and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such reports to be so filed and provided at the times
specified for the filings of such reports under such Sections and containing
all the information, audit reports and exhibits required for such reports. If,
at any time, the Company is not subject to the periodic reporting requirements
of the Exchange Act for any reason, the Company shall nevertheless continue
filing the reports specified in the preceding sentence with the SEC within the
time periods required unless the SEC will not accept such a filing. Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely on
Officer's Certificates). The Company agrees that it shall not take any action
for the purpose of causing the SEC not to accept such filings. If,
notwithstanding the foregoing, the SEC will not accept such filings for any
reason, the Company shall post the reports specified in the preceding sentence
on its website within the time periods that would apply if the Company were
required to file such reports with the SEC. At any time that any of the
Company's Subsidiaries are Unrestricted Subsidiaries, the quarterly and annual
financial information required by this paragraph shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations", of the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Company.
In addition, at any time when the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall furnish to the Holders of the Securities and to prospective investors,
upon the requests of such Holders, any information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act so long as the Securities
are not freely transferable under the Securities Act. The Company also shall
comply with the other provisions of Section 314(a) of the TIA.
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SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company and the
Subsidiary Guarantors shall be entitled to Incur Indebtedness if, on the date
of such Incurrence and after giving effect thereto on a pro forma basis the
Consolidated Coverage Ratio exceeds 2.0 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company and the
Restricted Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Agreement; provided,
however, that, immediately after giving effect to any such Incurrence, the
aggregate principal amount of all Indebtedness Incurred under this clause
(1) and then outstanding does not exceed $2,550,000,000 less the sum of
all principal payments with respect to such Indebtedness made pursuant to
Section 4.06(a)(3)(A) and in satisfaction of Section 4.06;
(2) Indebtedness owed to and held by the Company or a Restricted
Subsidiary; provided, however, that (A) any subsequent issuance or
transfer of any Capital Stock that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of such Indebtedness (other than to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Indebtedness by the obligor thereon, (B) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all obligations with respect to
the Securities, and (C) if a Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations of such Subsidiary Guarantor
with respect to its Subsidiary Guaranty;
(3) (i) the Initial Securities and the Exchange Securities (excluding
any Additional Securities) and (ii) the Floating Rate Securities issued on
the Issue Date under the Floating Rate Securities Indenture and the
Floating Rate Exchange Securities;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) or (3) of this Section 4.03(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on or prior to the date on which such Subsidiary was acquired by the
Company (other than Indebtedness Incurred in connection with, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Subsidiary became a Subsidiary or was acquired by the Company);
provided, however, that on the date of such acquisition and after giving
pro forma effect thereto, the Company would have been entitled to Incur at
least $1.00 of additional Indebtedness pursuant to Section 4.03(a);
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to clause (3), (4) or (5) or this
clause (6) of this Section 4.03(b);
41
(7) Hedging Obligations directly related to Indebtedness permitted to
be Incurred by the Company and its Restricted Subsidiaries pursuant to
this Indenture or entered into in the ordinary course of business and not
for speculative purposes;
(8) obligations in respect of performance, bid and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
in the ordinary course of business;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within three Business Days
of its Incurrence;
(10) Indebtedness consisting of the Subsidiary Guaranty of a
Subsidiary Guarantor and any Guarantee by the Company or a Subsidiary
Guarantor of Indebtedness or other obligations of the Company or any
Restricted Subsidiary (other than Indebtedness Incurred pursuant to clause
(5) of this Section 4.03(b)) so long as the Incurrence of such
Indebtedness or other obligations by the Company or such Restricted
Subsidiary is permitted under the terms of this Indenture;
(11) (A) Purchase Money Indebtedness, (B) Capital Lease Obligations
and (C) Attributable Debt, and Refinancing Indebtedness in respect
thereof, in an aggregate principal amount on the date of Incurrence that,
when added to all other Indebtedness Incurred pursuant to this clause (11)
and then outstanding, does not exceed 10% of Consolidated Tangible Assets,
as determined based on the consolidated balance sheet of the Company as of
the end of the most recent fiscal quarter ending at least 45 days prior
thereto;
(12) Attributable Debt, and Refinancing Indebtedness in respect
thereof, in respect of Specified Sale/Leaseback Transactions in an
aggregate principal amount on the date of Incurrence that, when added to
all other Indebtedness Incurred pursuant to this clause (12) and then
outstanding, does not exceed 10% of Consolidated Tangible Assets, as
determined based on the consolidated balance sheet of the Company as of
the end of the most recent fiscal quarter ending at least 45 days prior
thereto;
(13) Indebtedness Incurred by a Receivables Entity in a Qualified
Receivables Transaction;
(14) Preferred Stock issued by any Restricted Subsidiary formed to
operate a single health care facility; provided that the amount of such
Preferred Stock, when added to the aggregate amount of all other such
Preferred Stock of Restricted Subsidiaries then outstanding, does not
exceed 1% of Consolidated Tangible Assets, as determined based on the
consolidated balance sheet of the Company as of the end of the most recent
fiscal quarter ending at least 45 days prior thereto; and
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(15) Indebtedness of the Company or of any of its Restricted
Subsidiaries in an aggregate principal amount that, when taken together
with all other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (14) of this Section 4.03(b) or by
Section 4.03(a)) does not exceed $125,000,000.
(c) Notwithstanding the foregoing, neither the Company nor any
Subsidiary Guarantor shall incur any Indebtedness pursuant to Section 4.03(b)
if the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of the Company or any Subsidiary Guarantor unless such
Indebtedness shall be subordinated to the Securities or the applicable
Subsidiary Guaranty to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section 4.03:
(1) all Indebtedness outstanding under the Credit Agreement on the
Issue Date shall be treated as Incurred under clause (b)(1) of this
Section 4.03;
(2) in the event that an item of Indebtedness (or any portion thereof)
meets the criteria of more than one of the types of Indebtedness described
above, the Company, in its sole discretion, shall classify such item of
Indebtedness (or any portion thereof) at the time of Incurrence and shall
only be required to include the amount and type of such Indebtedness in
one of the above clauses (provided that any Indebtedness originally
classified as Incurred pursuant to any of clauses (b)(2) through (b)(15)
of this Section 4.03 may later be reclassified as having been Incurred
pursuant to paragraph (a) or any other of clauses (b)(2) through (b)(15)
of this Section 4.03 to the extent that such reclassified Indebtedness
could be Incurred pursuant to paragraph (a) or one of clauses (b)(2)
through (b)(15) of this Section 4.03, as the case may be, if it were
Incurred at the time of such reclassification); and
(3) the Company shall be entitled to divide and classify an item of
Indebtedness in more than one of the types of Indebtedness described
above.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to
make a Restricted Payment if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
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(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the beginning of the
fiscal quarter immediately following the fiscal quarter during which
the Issue Date occurs to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted Payment
(or, in case such Consolidated Net Income shall be a deficit, minus
100% of such deficit); plus
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an
issuance or sale to a Subsidiary of the Company and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit
of their employees) and 100% of any cash capital contribution received
by the Company from its shareholders subsequent to the Issue Date;
plus
(C) the amount by which Indebtedness of the Company is
reduced on the Company's balance sheet upon the conversion or exchange
subsequent to the Issue Date of any Indebtedness of the Company
convertible or exchangeable for Capital Stock (other than Disqualified
Stock) of the Company (less the amount of any cash, or the fair value
of any other property, distributed by the Company upon such conversion
or exchange); provided, however, that the foregoing amount shall not
exceed the Net Cash Proceeds received by the Company or any Restricted
Subsidiary from the sale of such Indebtedness (excluding Net Cash
Proceeds from sales to a Subsidiary of the Company or to an employee
stock ownership plan or to a trust established by the Company or any
of its Subsidiaries for the benefit of their employees); plus
(D) an amount equal to the net reduction in the Investments
(other than Permitted Investments) made by the Company or any
Restricted Subsidiary in any Person resulting from repurchases,
repayments or redemptions of such Investments by such Person, proceeds
realized on the sale of such Investment and proceeds representing the
return of capital (excluding dividends and distributions), in each
case received by the Company or any Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case of any
such Person, the amount of Investments (excluding Permitted
Investments) previously made (and treated as a Restricted Payment) by
the Company or any Restricted Subsidiary in such Person; plus
(E) in the case of the redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary, the portion (proportionate to
the Company's equity interest in such Subsidiary) of the Fair Market
Value of the net assets of such Unrestricted Subsidiary at the time
such Unrestricted Subsidiary is redesignated as a Restricted
Subsidiary, except to the extent that the Investment in such
Unrestricted Subsidiary was made by the Company or a Restricted
Subsidiary pursuant to Section 4.04(b)(10) or to the extent that such
Investment constituted a Permitted Investment; plus
44
(F) $50,000,000.
(b) The preceding provisions shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made by exchange for, Capital Stock
of the Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees) or a substantially
concurrent cash capital contribution received by the Company from its
shareholders; provided, however, that (A) such Restricted Payment shall be
excluded from the calculation of the amount of Restricted Payments and (B)
the Net Cash Proceeds from such sale or such cash capital contribution (to
the extent so used for such Restricted Payment) shall be excluded in the
calculation of amounts under Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or a Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent Incurrence of, Indebtedness of
such Person that is permitted to be Incurred pursuant to Section 4.03;
provided, however, that such purchase, repurchase, redemption, defeasance
or other acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section 4.04; provided, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
purchase, redemption or other acquisition of shares of Capital Stock of
the Company or any of its Subsidiaries from employees, former employees,
directors or former directors of the Company or any of its Subsidiaries
(or permitted transferees of such employees, former employees, directors
or former directors), pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved or
ratified by the Board of Directors under which such individuals purchase
or sell or are granted the option to purchase or sell, shares of such
Capital Stock; provided, however, that the aggregate amount of such
Restricted Payments (excluding amounts representing cancelation of
Indebtedness) shall not exceed $5,000,000 in any calendar year (provided
that (A) if the Company and its Restricted Subsidiaries make less than
$5,000,000 in the aggregate of such Restricted Payments in any calendar
year, the unused amount for such calendar year may be carried over to the
next succeeding calendar year (but not any other calendar year thereafter)
and (B) the amount payable in any calendar year may be increased by an
amount up to the sum of (i) the amount of cash proceeds from the sale of
Capital Stock (other than Disqualified Stock) of the Company to employees,
former employees, directors or former directors of the Company or any of
its Subsidiaries, to the extent that the cash proceeds from the sale of
such Capital Stock have not otherwise been applied to the payment of
45
Restricted Payments by virtue of Section 4.04(a)(3)(B), plus (ii) the cash
proceeds of key man life insurance policies received by the Company or its
Restricted Subsidiaries after the Issue Date, less (iii) the amount of
repurchases and other acquisitions previously made with the cash proceeds
described in clauses (i) and (ii) above); provided, further, however, that
(x) such repurchases and other acquisitions shall be excluded in the
calculation of the amount of Restricted Payments and (y) cash proceeds
referred to in clause (B)(i) above used to make Restricted Payments under
this Section 4.04(b)(4) shall be excluded from the calculation of amounts
under Section 4.04(a)(3)(B);
(5) (A) the declaration and payment of dividends on the Convertible
Preferred Stock, and other cash payments at any time to reduce any
accretion in the liquidation preference resulting from previously unpaid
dividends on the Convertible Preferred Stock, in each case in accordance
with the terms thereof in effect on the Issue Date and (B) the declaration
and payments of dividends on Disqualified Stock issued pursuant to Section
4.03; provided, however, in each case, that at the time of payment of such
dividend or other cash payment, no Default shall have occurred and be
continuing (or result therefrom); provided, further, however, that
dividends and cash payments referred to in this clause (5) shall be
excluded in the calculation of the amount of Restricted Payments;
(6) repurchases of Capital Stock deemed to occur upon exercise of
stock options if such Capital Stock represents a portion of the exercise
price of such options; provided, however, that such Restricted Payments
shall be excluded in the calculation of the amount of Restricted Payments;
(7) cash payments in lieu of the issuance of fractional shares in
connection with the exercise of warrants, options or other securities
convertible into or exchangeable for Capital Stock of the Company;
provided, however, that any such cash payment shall not be for the purpose
of evading the limitation of this Section 4.04; provided, further,
however, that such payments shall be excluded in the calculation of the
amount of Restricted Payments;
(8) in the event of a Change of Control, and if no Default shall have
occurred and be continuing, the payment, purchase, redemption, defeasance
or other acquisition or retirement of Subordinated Obligations of the
Company or any Subsidiary Guarantor, in each case, at a purchase price not
greater than 101% of the principal amount of such Subordinated
Obligations, plus any accrued and unpaid interest thereon; provided,
however, that prior to such payment, purchase, redemption, defeasance or
other acquisition or retirement, the Company (or a third party to the
extent permitted by this Indenture) has made a Change of Control Offer
with respect to the Securities as a result of such Change of Control and
has repurchased all Securities validly tendered and not withdrawn in
connection with such Change of Control Offer; provided, further, however,
that such payments, purchases, redemptions, defeasances or other
acquisitions or retirements shall be excluded in the calculation of the
amount of Restricted Payments;
46
(9) payments of intercompany subordinated Indebtedness, the Incurrence
of which was permitted under Section 4.03(b)(2); provided, however, that
no Default has occurred and is continuing or would otherwise result
therefrom; provided, further, however, that such payments shall be
excluded in the calculation of the amount of Restricted Payments; or
(10) Restricted Payments in an amount that, when taken together with
all Restricted Payments made pursuant to this clause (10), does not exceed
$50,000,000; provided, however, that (A) at the time of each such
Restricted Payment, no Default shall have occurred and be continuing (or
result therefrom) and (B) such Restricted Payments shall be excluded in
the calculation of the amount of Restricted Payments.
The amount of any Restricted Payment that is not made in cash shall be
determined in a manner consistent with the determination of the amount of an
Investment as set forth in the final sentence of the first paragraph of the
definition of "Investment".
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) pay dividends or make any other distributions
on its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c),
(A) any encumbrance or restriction pursuant to applicable
law, rule, regulation or order or an agreement in effect at or entered
into on the Issue Date;
(B) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and outstanding on such date;
(C) any encumbrance or restriction pursuant to any amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing of the agreement referred to in clauses (A)
and (B) above; provided, however, that such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing is no more restrictive, as reasonably determined by the
Company, with respect to such encumbrances and other restrictions
47
taken as a whole than those prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing;
(D) any encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of all or substantially all the Capital
Stock or assets of such Restricted Subsidiary pending the closing of
such sale or disposition;
(E) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
(F) any limitation or prohibition on the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements,
which limitation or prohibition is applicable only to the assets that
are the subject of such agreements;
(G) any encumbrance or restriction existing under or by
reason of contractual requirements of a Receivables Entity in
connection with a Qualified Receivables Transaction, provided that
such restrictions apply only to such Receivables Entity; and
(2) with respect to clause (c) only,
(A) any encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests to
the extent such provisions restrict the transfer of the lease or the
property leased thereunder; and
(B) any encumbrance or restriction contained in Capital Lease
Obligations, any agreement governing Purchase Money Indebtedness,
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the
transfer of the property subject to such Capital Lease Obligations,
Purchase Money Indebtedness, security agreements or mortgages.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless:
(1) the Company or such Restricted Subsidiary receives consideration
at the time of such Asset Disposition at least equal to the Fair Market
Value (including as to the value of all non-cash consideration) of the
shares and assets subject to such Asset Disposition;
(2) at least 75% of the consideration thereof received by the Company
or such Restricted Subsidiary is in the form of cash or cash equivalents;
48
provided, however, that this clause (2) shall not apply to the sale or
other disposition of the Company's diagnostic division; and
(3) an amount equal to 100% of the Net Available Cash from such Asset
Disposition, other than any Asset Disposition that constitutes (i) a
Syndication or a resyndication transaction in the ordinary course of
business or (ii) a Specified Sale/Leaseback Transaction, is applied by the
Company (or such Restricted Subsidiary, as the case may be)
(A) to the extent the Company elects (or is required by the
terms of any Indebtedness), to prepay, repay, redeem or purchase
Senior Indebtedness of the Company or a Subsidiary Guarantor or
Indebtedness (other than any Disqualified Stock) of a Restricted
Subsidiary that is not a Subsidiary Guarantor (in each case other than
Indebtedness owed to the Company or an Affiliate of the Company)
within one year from the later of the date of such Asset Disposition
or the receipt of such Net Available Cash;
(B) to the extent the Company elects (including with respect
to the balance of such Net Available Cash after application (if any)
in accordance with clause (A)), to acquire Additional Assets within
one year from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; and
(C) to the extent of the balance of such Net Available Cash
after application (if any) in accordance with clauses (A) and (B), to
make an offer to the Holders of the Securities (and to holders of
other Senior Indebtedness of the Company designated by the Company) to
purchase Securities (and such other Senior Indebtedness of the
Company) pursuant to and subject to the conditions contained in this
Indenture;
provided, however, that in connection with any prepayment, repayment or
purchase of Indebtedness made to satisfy clause (A) or (C) above, the Company
or such Restricted Subsidiary shall permanently retire such Indebtedness and
shall cause the related loan commitment (if any) to be permanently reduced in
an amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section 4.06 except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which is not
applied in accordance with this Section 4.06 exceeds $20,000,000. Pending
application of Net Available Cash pursuant to this Section 4.06, such Net
Available Cash shall be invested in Temporary Cash Investments or applied to
temporarily reduce revolving credit indebtedness.
For the purposes of this Section 4.06, the following are deemed to be
cash or cash equivalents:
49
(1) the assumption or discharge of any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in
the footnotes thereto) of the Company or such Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Securities)
that are assumed by the transferee of such assets and for which the
Company and all of the Restricted Subsidiaries have been released by all
creditors in writing;
(2) securities received by the Company or any Restricted Subsidiary
from the transferee that are converted by the Company or such Restricted
Subsidiary within 180 days into cash, to the extent of cash received in
that conversion;
(3) all Temporary Cash Investments; and
(4) any Designated Noncash Consideration having an aggregate Fair
Market Value that, when taken together with all other Designated Noncash
Consideration previously received and then outstanding, does not exceed at
the time of the receipt of such Designated Noncash Consideration (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) $30,000,000.
(b) In the event of an Asset Disposition that requires the purchase of
Securities (and other Senior Indebtedness of the Company) pursuant to Section
4.06(a)(3)(C), the Company shall purchase Securities tendered pursuant to an
offer by the Company for the Securities (and such other Senior Indebtedness)
(the "Offer") at a purchase price of 100% of their principal amount (or, in the
event such other Senior Indebtedness of the Company was issued with significant
original issue discount, 100% of the accreted value thereof) without premium,
plus accrued but unpaid interest (or, in respect of such other Senior
Indebtedness of the Company, such lesser price, if any, as may be provided for
by the terms of such Senior Indebtedness) in accordance with the procedures
(including prorating in the event of oversubscription) set forth in this
Indenture. If the aggregate purchase price of the securities tendered pursuant
to the Offer exceeds the Net Available Cash allotted to their purchase, the
Company shall select the securities to be purchased on a pro rata basis but in
round denominations, which in the case of the Securities will be denominations
of $1,000 principal amount or multiples thereof. The Company shall not be
required to make such an Offer to purchase Securities (and other Senior
Indebtedness of the Company) pursuant to this Section 4.06 if the Net Available
Cash available therefor is less than $20,000,000 (which lesser amount shall be
carried forward for purposes of determining whether such an offer is required
with respect to the Net Available Cash from any subsequent Asset Disposition).
Upon completion of such an Offer, Net Available Cash shall be deemed to be
reduced by the aggregate amount of such Offer.
(c) (i) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee
and send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in
whole or in part (subject to prorating as described in Section 4.06(b) in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
50
amount at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date").
(ii) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (A) the amount of the Offer (the "Offer
Amount"), including information as to any other Senior Indebtedness included in
the Offer for repurchase, (B) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (C) the
compliance of such allocation with the provisions of Section 4.06(a). By 11:00
a.m. New York City time on the Purchase Date, the Company shall irrevocably
deposit with the Trustee or with a Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is acting as Paying Agent, segregate and hold in trust) an
amount equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section. Upon the expiration of the period for which the
Offer remains open (the "Offer Period"), the Company shall deliver to the
Trustee for cancelation the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee (or the
Paying Agent, if not the Trustee) shall, on the Purchase Date, mail or deliver
payment (or cause the delivery of payment) to each tendering Holder in the
amount of the purchase price. In the event that the aggregate purchase price of
the Securities delivered by the Company to the Trustee is less than the Offer
Amount applicable to the Securities, the Trustee shall deliver the excess to
the Company immediately after the expiration of the Offer Period for
application in accordance with this Section 4.06.
(iii) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. A Holder shall be entitled to withdraw its election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of the Security that was delivered
for purchase by such Holder and a statement that such Holder is withdrawing its
election to have such Security purchased. Holders whose Securities are
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(iv) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue of
its compliance with such securities laws or regulations.
51
SECTION 4.07. Limitation on Transactions with Affiliates. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering
of any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less favorable to
the Company or such Restricted Subsidiary than those that could be
obtained at the time of the Affiliate Transaction in arm's-length dealings
with a Person who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in excess of
$10,000,000, the terms of the Affiliate Transaction are set forth in
writing and a majority of the non-employee directors of the Company
disinterested with respect to such Affiliate Transaction have determined
in good faith that the criteria set forth in clause (1) are satisfied and
have approved the relevant Affiliate Transaction as evidenced by a
resolution of the Board of Directors; and
(3) if such Affiliate Transaction involves an amount in excess of
$50,000,000, the Board of Directors shall also have received a written
opinion from an Independent Qualified Party to the effect that such
Affiliate Transaction is fair, from a financial standpoint, to the Company
and its Restricted Subsidiaries or is not less favorable to the Company
and its Restricted Subsidiaries than could reasonably be expected to be
obtained at the time in an arm's-length transaction with a Person who was
not an Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit:
(1) any Investment (other than a Permitted Investment) or other
Restricted Payment, in each case permitted to be made pursuant to Section
4.04;
(2) any employment or consulting agreement, employee benefit plan,
officer or director indemnification agreement or any similar arrangement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business or approved by the Board of Directors, and
payments pursuant thereto;
(3) loans or advances to employees in the ordinary course of business
of the Company or its Restricted Subsidiaries, but in any event not to
exceed $10,000,000 in the aggregate outstanding at any one time;
(4) the payment of reasonable fees or other reasonable compensation
to, or the provision of customary benefits or indemnification arrangements
to, directors of the Company and its Restricted Subsidiaries;
(5) any transaction with the Company, a Restricted Subsidiary or any
Person that would constitute an Affiliate Transaction solely because the
52
Company or a Restricted Subsidiary owns an equity interest in or otherwise
controls such Restricted Subsidiary or Person;
(6) the issuance or sale of any Capital Stock (other than Disqualified
Stock) of the Company;
(7) any agreement as in effect on the Issue Date and described in the
Offering Memorandum or any renewals or extensions of any such agreement
(so long as such renewals or extensions are not less favorable in any
material respect to the Company or the Restricted Subsidiaries) and the
transactions evidenced thereby;
(8) the provision of services to directors or officers of the Company
or any of its Restricted Subsidiaries of the nature provided by the
Company or any of its Restricted Subsidiaries to customers in the ordinary
course of business; and
(9) transactions effected as a part of a Qualified Receivables
Transaction.
SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change
of Control, each Holder shall have the right to require that the Company
purchase all or any part of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof on the date of purchase plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), in accordance with Section 4.08(b).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:
(i) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof on
the date of purchase, plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest on the relevant interest payment
date);
(ii) the circumstances and relevant facts and financial information
regarding such Change of Control;
(iii) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(iv) the instructions, as determined by the Company, consistent with
this Section 4.08, that a Holder must follow in order to have its
Securities purchased.
(c) The Company shall not be required to make a Change of Control
Offer following a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
53
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company and purchases all Securities validly tendered and not
withdrawn under such Change of Control Offer.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.08. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.08, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.08 by virtue
thereof.
(e) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to
the purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(f) On the purchase date, all Securities purchased by the Company
under this Section 4.08 shall be delivered by the Company to the Trustee for
cancelation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
SECTION 4.09. Limitation on Liens. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, Incur or
permit to exist any Lien (the "Initial Lien") of any nature whatsoever on any
of its properties (including Capital Stock of a Restricted Subsidiary), whether
owned at the Issue Date or thereafter acquired, securing any Indebtedness,
other than Permitted Liens, without effectively providing that the Securities
shall be secured equally and ratably with (or prior to) the obligations so
secured for so long as such obligations are so secured.
Any Lien created for the benefit of the Holders of the Securities
pursuant to the preceding sentence shall provide by its terms that such Lien
shall be automatically and unconditionally released and discharged upon the
release and discharge of the Initial Lien.
SECTION 4.10. Limitation on Sale/Leaseback Transactions. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless:
(1) the Company or such Restricted Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable Debt with
respect to such Sale/Leaseback Transaction pursuant to Section 4.03 and
(B) create a Lien on such property securing such Attributable Debt without
equally and ratably securing the Securities pursuant to Section 4.09;
54
(2) the gross proceeds received by the Company or any Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are at least
equal to the Fair Market Value of such property; and
(3) the Company applies the proceeds of such transaction in compliance
with Section 4.06.
SECTION 4.11. Future Guarantors. The Company shall cause each
Restricted Subsidiary that (a) Guarantees any Indebtedness of the Company or
any Subsidiary Guarantor (other than Indebtedness permitted to be Incurred
pursuant to clause (2), (8) or (9) of Section 4.03(b)) or (b) Incurs any
Indebtedness other than Eligible Indebtedness, to, at the same time, execute
and deliver to the Trustee a Guaranty Agreement pursuant to which such
Restricted Subsidiary will Guarantee payment of the Securities on the same
terms and conditions as those set forth in Article X of this Indenture.
SECTION 4.12. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe
the Default, its status and what action the Company is taking or proposes to
take with respect thereto. The Company also shall comply with Section 314(a)(4)
of the TIA.
SECTION 4.13. Further Instruments and Acts. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer
or lease, in one transaction or a series of transactions, directly or
indirectly, all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall expressly
assume, by a supplemental indenture hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the
Company under the Securities and this Indenture;
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(2) immediately after giving pro forma effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary thereof as a result of such transaction as
having been Incurred by the Successor Company or such Subsidiary at the
time of such transaction), no Default shall have occurred and be
continuing;
(3) immediately after giving pro forma effect to such transaction, (A)
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a) or (B) the Consolidated Coverage
Ratio for the Successor Company would be greater than such ratio for the
Company and its Restricted Subsidiaries immediately prior to such
transaction; and
(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture,
provided, however, that clause (3) shall not be applicable to (A) a Restricted
Subsidiary consolidating with, merging into or transferring all or part of its
properties and assets to the Company (so long as no Capital Stock of the
Company is distributed to any Person) or (B) the Company merging with an
Affiliate of the Company solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.
For purposes of this Section 5.01, the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, and the predecessor Company, except in the
case of a lease, shall be released from the obligation to pay the principal of
and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:
(1) except in the case of a Subsidiary Guarantor (x) that has been
disposed of in its entirety to another Person (other than to the Company
or an Affiliate of the Company), whether through a merger, consolidation
or sale of Capital Stock or assets or (y) that, as a result of the
disposition of all or a portion of its Capital Stock, ceases to be a
Subsidiary of the Company, in both cases, if in connection therewith the
Company provides an Officers' Certificate to the Trustee to the effect
that the Company will comply with its obligations under Section 4.06 in
respect of such disposition, the resulting, surviving or transferee Person
(if not such Subsidiary) shall be a Person organized and existing under
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the laws of the jurisdiction under which such Subsidiary was organized or
under the laws of the United States of America, or any State thereof or
the District of Columbia, and such Person shall expressly assume, by a
Guaranty Agreement, in a form satisfactory to the Trustee, all the
obligations of such Subsidiary, if any, under its Subsidiary Guaranty;
(2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as
a result of such transaction as having been issued by such Person at the
time of such transaction), no Default shall have occurred and be
continuing; and
(3) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such Guaranty Agreement, if any, complies with this
Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company (A) defaults in the payment of principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon declaration of acceleration or otherwise or
(B) fails to purchase Securities when required pursuant to this Indenture
or the Securities;
(3) the Company fails to comply with Section 5.01;
(4) the Company or any Subsidiary Guarantor fails to comply with any
of its agreements contained in the Securities or this Indenture (other
than those referred to in (1), (2) or (3) above) and such failure
continues for 60 days after the notice from the Trustee or the Holders
specified below;
(5) Indebtedness of the Company, any Subsidiary Guarantor or any
Significant Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof because of a
default and the total amount of such Indebtedness unpaid or accelerated
exceeds $50,000,000 or its foreign currency equivalent at the time;
(6) the Company, any Subsidiary Guarantor or any Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
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(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it
in an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company, any Subsidiary
Guarantor or any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company, any Subsidiary
Guarantor or any Significant Subsidiary or for any substantial part of
its property; or
(C) orders the winding up or liquidation of the Company, any
Subsidiary Guarantor or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(8) any judgment or decree for the payment of money in excess of
$50,000,000 (or its foreign currency equivalent at the time) is entered
against the Company, any Subsidiary Guarantor or any Significant
Subsidiary, remains outstanding for a period of 60 consecutive days
following the entry of such judgment or decree and is not discharged,
waived or effectively stayed; or
(9) any Subsidiary Guaranty ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty) or
any Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guaranty.
The foregoing shall constitute Events of Default whatever the reason for any
such Event of Default and whether such Event of Default is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
However, a default under clause (4) will not constitute an Event of
Default until the Trustee or the Holders of 25% in principal amount of the
outstanding Securities notify the Company of the default and the Company does
not cure such default within the time specified after receipt of such notice.
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The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (5) or (9) and any event which with the
giving of notice or the lapse of time or both would become an Event of Default
under clause (4) or (8), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(6) or (7) with respect to the
Company) occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the outstanding Securities, by notice to the Company,
may declare the principal of and accrued but unpaid interest on all the
Securities to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.01(6) or (7) with respect to the Company occurs, the principal of
and interest on all the Securities shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holders. The Holders of a majority in principal amount of the Securities
by notice to the Trustee may rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of acceleration. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Securities pursuant to
the optional redemption provisions hereof, an equivalent premium shall also
become and be immediately due and payable to the extent permitted by law upon
the acceleration of the Securities.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of
59
the principal of or interest on a Security, (b) a Default arising from the
failure to redeem or purchase any Security when required pursuant to this
Indenture or (c) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Holder affected. When a Default
is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
or, subject to Section 7.01, that the Trustee determines is unduly prejudicial
to the rights of other Holders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action under this Section, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no Holder
may pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the outstanding
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the outstanding
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder. In the event
that the Definitive Securities are not issued to any beneficial owner promptly
after the Registrar has received a request from the Holder of a Global Security
to issue such Definitive Securities to such beneficial owner or its nominee,
the Company expressly agrees and acknowledges, with respect to the right of any
Holder to pursue a remedy pursuant to this Indenture, the right of such
beneficial holder of Securities to pursue such remedy with respect to the
portion of the Global Security that represents such beneficial holder's
Securities as if such Definitive Securities had been issued.
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SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount then due
and owing (together with interest on overdue principal and (to the extent
lawful) on any unpaid interest at the rate provided for in the Securities) and
the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section. At least 15 days before such record date, the
Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
61
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company
nor any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company and each Subsidiary Guarantor (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall be
fully protected and shall not be liable for any action it takes or omits to
take in good faith in reliance on the Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents, attorneys, custodians or
nominees and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights
or powers; provided, however, that the Trustee's conduct does not constitute
wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and if the Trustee shall determine in good faith to make such further inquiry
63
or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.
(g) In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Trustee shall have
no liability in respect of losses incurred as a result of the liquidation of
any such investment prior to its Stated Maturity or the failure of the party
directing such investment to provide timely written investment direction. The
Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of specific written investment direction.
(h) The rights, privileges, immunities and protections afforded to the
Trustee in such capacity pursuant to this Indenture (including, without
limitation, the right to be indemnified) shall also be afforded to the Trustee
in each of its other capacities hereunder.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default
is received by the Trustee at the Corporate Trust Office of the Trustee, and
such notice references the Notes and this Indenture.
(j) The Trustee may request that the Company deliver an Officers'
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 Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for
any statement of the Company or any Subsidiary Guarantor in this Indenture or
in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs, is continuing
and is known to the Trustee, the Trustee shall mail to each Holder notice of
the Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Security, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders.
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SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each June 1 beginning with the June 1 following the date of
this Indenture, and in any event prior to June 15 in each year, the Trustee
shall mail to each Holder a brief report dated as of such June 1 that complies
with Section 313(a) of the TIA. The Trustee shall also comply with Section
313(b) of the TIA.
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange (if any) on which the Securities are
listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants,
custodians, nominees and experts. The Company and each Subsidiary Guarantor,
jointly and severally, shall indemnify the Trustee and its officers, directors,
employees and agents and any predecessor Trustee and its officers, directors,
employees and agents for, and hold it or them harmless against, any and all
loss, liability or expense (including reasonable attorneys' fees) incurred by
it in connection with the administration of this trust and the performance of
its duties under this Indenture and any other documents and transactions in
connection therewith, including the reasonable costs and expenses of defending
itself against any claim (whether asserted by the Company, any Holder or any
other Person) or liability in connection with the exercise or performance of
any of its or their powers or duties hereunder (including, without limitation,
settlement costs, provided any settlement with respect to which indemnification
is sought shall have been consented to by the Company), except to the extent
any such loss, liability or expenses may be attributable to its own negligence,
bad faith or willful misconduct. The Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Company shall not relieve the Company or any Subsidiary Guarantor of
its obligations hereunder. The Company shall defend the claim and the Trustee
may have separate counsel and the Company shall pay the fees and expenses of
such counsel. The Company need not reimburse any expense or indemnify against
any loss, liability or expense incurred by the Trustee through the Trustee's
own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the resignation or removal of the Trustee and the discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(6) or (7) with respect to the Company, the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
65
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee if such successor corporation is
eligible and qualified under Section 7.10.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
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authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of Section 310(a) of the TIA. The Trustee,
together with its parent entity, shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with Section 310(b) of the TIA; provided,
however, that there shall be excluded from the operation of Section 310(b)(1)
of the TIA any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in Section
310(b)(1) of the TIA are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (1) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant
to Article 3 hereof and the Company irrevocably deposits with the Trustee funds
in an amount sufficient, or U.S. Government Obligations the principal of and
interest on which will be sufficient, or a combination thereof sufficient, to
pay at maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than Securities
replaced pursuant to Section 2.07), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent set forth herein relating to the
satisfaction and discharge of this Indenture have been satisfied, and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and the operation of Sections
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6.01(5), 6.01(6), 6.01(7) and 6.01(8) (but, in the case of Sections 6.01(6) and
(7), with respect to Subsidiary Guarantors and Significant Subsidiaries only)
and the limitations contained in Section 5.01(a)(3) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of Default specified
in Sections 6.01(5), 6.01(6), 6.01(7) or 6.01(8) (but, in the case of Sections
6.01(6) and (7), with respect to Subsidiary Guarantors and Significant
Subsidiaries only) or because of the failure of the Company to comply with
Section 5.01(a)(3). If the Company exercises its legal defeasance option or its
covenant defeasance option, each Subsidiary Guarantor, if any, shall be
released from all of its obligations with respect to its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations, or a combination thereof, for the payment
of the principal of and interest on the Securities to redemption or
maturity, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal of and interest when
due on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(6) or (7) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
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(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (B) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge
69
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's and each Subsidiary
Guarantor's obligations under this Indenture, each Subsidiary Guarantee and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of principal of or interest on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or
U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities, including any
Subsidiary Guaranties, or to secure the Securities;
(5) to add to the covenants of the Company or a Subsidiary Guarantor
for the benefit of the Holders or to surrender any right or power herein
conferred upon the Company or a Subsidiary Guarantor;
(6) to make any change that does not adversely affect the rights of
any Holder;
(7) to conform the text of this Indenture or the Securities to any
provision of the "Description of the Notes" section of the Offering
Memorandum to the extent that such provision of the "Description of the
70
Notes" section of the Offering Memorandum was intended to be a verbatim
recitation of a provision of this Indenture or the Securities;
(8) to comply with any requirement of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(9) to make any amendment to the provisions of this Indenture relating
to the transfer and legending of Securities; provided, however, that (A)
compliance with this Indenture as so amended would not result in
Securities being transferred in violation of the Securities Act or any
other applicable securities law and (B) such amendment does not materially
and adversely affect the rights of Holders to transfer Securities.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.01.
SECTION 9.02. With Consent of Holders. (a) The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of
the Securities then outstanding (including consents obtained in connection with
a purchase of, or tender offer or exchange for, the Securities) and any past
Default or compliance with any provisions may also be waived with the consent
of the Holders of at least a majority in principal amount of the Securities
then outstanding. Notwithstanding the foregoing, without the consent of each
Holder affected thereby, an amendment or waiver may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or change the Stated Maturity of any
Security;
(4) (i) reduce the amount payable upon the redemption of any Security
or (ii) change the time at which any Security may be redeemed, in each
case in accordance with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder of the Securities to receive
payment of principal of and interest on such Holder's Securities on or
after the due dates therefor or to institute suit for the enforcement of
any payment on or with respect to such Holder's Securities;
(7) make any change in the amendment provisions that require each
Holder's consent or in the waiver provisions;
71
(8) make any change in the ranking or priority of any Security that
would adversely affect the Securityholders; or
(9) make any change in, or release other than in accordance with this
Indenture, any Subsidiary Guaranty that would adversely affect the
Securityholders.
(b) It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation
of the consent or waiver is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date on which the amendment or waiver becomes effective.
After an amendment or waiver becomes effective, it shall bind every Holder. An
amendment or waiver becomes effective upon execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
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SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to all Holders and is paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.
ARTICLE 10
Subsidiary Guaranties
SECTION 10.01. Guaranties. (a) Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Guaranteed
Obligations"). Each Subsidiary Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under this Article 10 notwithstanding any extension
or renewal of any Obligation.
(b) Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Guaranteed Obligations
and also waives notice of protest for nonpayment. Each Subsidiary Guarantor
waives notice of any default under the Securities or the Guaranteed
Obligations. The obligations of each Subsidiary Guarantor hereunder shall not
be affected by (1) the failure of any Holder or the Trustee to assert any claim
or demand or to enforce any right or remedy against the Company or any other
Person (including any Subsidiary Guarantor) under this Indenture, the
Securities or any other agreement or otherwise; (2) any extension or renewal of
any thereof; (3) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
agreement; (4) the release of any security held by any Holder or the Trustee
for the Guaranteed Obligations or any of them; (5) the failure of any Holder or
73
the Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (6) except as set forth in Section 10.06, any change
in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.
(c) Except as expressly set forth in Sections 8.01(b), 10.02, 10.05
and 10.06, the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of such Subsidiary Guarantor
or would otherwise operate as a discharge of such Subsidiary Guarantor as a
matter of law or equity.
(d) Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or
interest on any Obligation is rescinded or must otherwise be restored by any
Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
(e) In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall
become due, whether at maturity, by acceleration, by redemption or otherwise,
or to perform or comply with any other Obligation, each Subsidiary Guarantor
hereby promises to and shall, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (A) the unpaid amount of such Guaranteed
Obligations, (B) accrued and unpaid interest on such Guaranteed Obligations
(but only to the extent not prohibited by law) and (C) all other monetary
Guaranteed Obligations of the Company to the Holders and the Trustee.
(f) Each Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in respect of any Obligations guaranteed hereby until
payment in full of all Obligations. Each Subsidiary Guarantor further agrees
that, as between it, on the one hand, and the Holders and the Trustee, on the
other hand, (A) the maturity of the Guaranteed Obligations guaranteed hereby
may be accelerated as provided in Article 6 for the purposes of any Subsidiary
Guaranty herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Guaranteed Obligations
74
guaranteed hereby, and (B) in the event of any declaration of acceleration of
such Guaranteed Obligations as provided in Article 6, such Guaranteed
Obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purposes of this Section 10.01.
(g) Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section 10.01.
SECTION 10.02. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 10.03. Successors and Assigns. This Article 10 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 10 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 10
at law, in equity, by statute or otherwise.
SECTION 10.05. Modification. No modification, amendment or waiver of
any provision of this Article 10, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 10.06. Release of Subsidiary Guarantor. A Subsidiary Guarantor
will be released from its obligations under this Article 10 (other than any
obligation that may have arisen under Section 10.08)
(1) upon the sale or other disposition (including by way of
consolidation or merger) of such Subsidiary Guarantor, including the sale
or disposition of Capital Stock of such Subsidiary Guarantor, following
75
which such Subsidiary Guarantor is no longer a Subsidiary of the Company;
or
(2) upon the sale or disposition of all or substantially all of the
assets of such Subsidiary Guarantor;
in each case other than to the Company or an Affiliate of the Company and as
permitted by this Indenture and if in connection therewith the Company provides
an Officers' Certificate to the Trustee to the effect that the Company will
comply with its obligations under Section 4.06 in respect of such disposition.
Upon any sale or disposition described in clause (1) or (2) above, the obligor
on the related Subsidiary Guaranty will be released from its obligations
thereunder. The Subsidiary Guaranty of a Subsidiary Guarantor also shall be
released:
(3) upon the designation of such Subsidiary Guarantor as an
Unrestricted Subsidiary in accordance with the terms of this Indenture;
(4) at such time as (A) any Guarantee by such Subsidiary Guarantor of
the obligations under the Credit Agreement and any other Guarantee that
resulted in (or would by itself require) the creation of such Subsidiary
Guaranty under this Indenture has been released and discharged, except a
discharge or release by or as a result of payment under such Guarantee, or
(B) such Subsidiary Guarantor does not have any Indebtedness outstanding
that resulted in (or would by itself require) the creation of such
Subsidiary Guaranty under this Indenture; or
(5) if the Company exercises its legal defeasance option or its
covenant defeasance option as described in Article 8 or if the Company's
obligations under this Indenture are discharged in accordance with the
terms of this Indenture.
At the request of the Company, the Trustee shall execute and deliver
an appropriate instrument evidencing such release.
SECTION 10.07. Contribution. Each Subsidiary Guarantor that makes a
payment under its Subsidiary Guaranty shall be entitled upon payment in full of
all Guaranteed Obligations under this Indenture to a contribution from each
other Subsidiary Guarantor in an amount equal to such other Subsidiary
Guarantor's pro rata portion of such payment based on the respective net assets
of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
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SECTION 11.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or any Subsidiary Guarantor, to it at:
Xxx XxxxxxXxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
if to the Trustee:
The Bank of Nova Scotia Trust Company of New York
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention of: Corporate Trust Office
Fax: (000) 000-0000
The Company, any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed,
first-class mail, to the Holder at the Holder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a 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, it is duly given,
whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders. Holders
may communicate pursuant to Section 312(b) of the TIA with other Holders with
respect to their rights under this Indenture or the Securities. The Company,
the Trustee, the Registrar and anyone else shall have the protection of Section
312(c) of the TIA.
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
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(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(a) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or any Subsidiary
Guarantor or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any Subsidiary
Guarantor shall be disregarded and deemed not to be outstanding, except that,
for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded. Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 11.08. Legal Holidays. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 11.09. Governing Law. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the state of New
York.
SECTION 11.10. No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Company or any Subsidiary
Guarantor shall have any liability for any obligations of the Company or any
78
Subsidiary Guarantor under the Securities, any Subsidiary Guaranty or this
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. By accepting a Security, each Holder shall waive
and release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 11.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
79
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
HEALTHSOUTH CORPORATION,
By: /s/ XXX XXXXXXX
-----------------------------------
Name: Xxx Xxxxxxx
Title: President and Chief Executive
Officer
EACH CORPORATION SET FORTH ON
ANNEX I HERETO
By: /s/ XXX XXXXXXX
-----------------------------------
Name: Xxx Xxxxxxx
Title: President
Annex I
-------
----------------------------------------------------------
Advantage Health Corporation
Advantage Health Harmarville Rehabilitation Corporation
ASC Network Corporation
Baton Rouge Rehab, Inc.
CMS Development and Management Company, Inc.
CMS Jonesboro Rehabilitation, Inc
Continental Medical of Arizona, Inc.
Continental Medical Systems, Inc.
Continental Rehabilitation Hospital of Arizona, Inc.
Diagnostic Health Corporation
HEALTHSOUTH Holdings, Inc.
HEALTHSOUTH LTAC of Sarasota, Inc.
HEALTHSOUTH Medical Center, Inc.
HEALTHSOUTH of Altoona, Inc.
HEALTHSOUTH of Austin, Inc.
HEALTHSOUTH of Charleston, Inc.
HEALTHSOUTH of Dothan, Inc.
HEALTHSOUTH of East Tennessee, Inc.
HEALTHSOUTH of Erie, Inc.
HEALTHSOUTH of Fort Xxxxx, Inc.
HEALTHSOUTH of Xxxxxxxxx, Inc.
HEALTHSOUTH of Houston, Inc.
HEALTHSOUTH of Mechanicsburg, Inc.
HEALTHSOUTH of Midland, Inc.
HEALTHSOUTH of Xxxxxxxxxx, Inc.
HEALTHSOUTH of Nittany Valley, Inc.
HEALTHSOUTH of Pittsburgh, Inc.
HEALTHSOUTH of Reading, Inc.
HEALTHSOUTH of San Antonio, Inc.
HEALTHSOUTH of South Carolina, Inc.
HEALTHSOUTH of Spring Hill, Inc.
HEALTH SOUTH of Texarkana, Inc.
HEALTH SOUTH of Texas, Inc.
HEALTH SOUTH of Toms River, Inc.
HEALTHSOUTH of Treasure Coast, Inc.
HEALTH SOUTH of Utah, Inc.
HEALTH SOUTH of York, Inc.
HEALTHSOUTH of Yuma, Inc.
HEALTHSOUTH Properties Corporation
HEALTHSOUTH Real Property Holding Corporation
HEALTHSOUTH Rehabilitation Center, Inc.
HEALTHSOUTH S.C. of Scottsdale-Xxxx Road, Inc.
HEALTHSOUTH Specialty Hospital, Inc.
HEALTHSOUTH Sub-Acute Center of Mechanicsburg, Inc.
HEALTHSOUTH Surgery Centers-West, Inc.
HEALTHSOUTH Surgery Center of Fairfield, Inc.
HEALTHSOUTH Surgical Center of Tuscaloosa, Inc.
Kansas Rehabilitation Hospital, Inc.
National Imaging Affiliates, Inc.
National Surgery Centers, Inc.
New England Rehabilitation Management Co., Inc.
North Louisiana Rehabilitation Center, Inc.
NSC Houston, Inc.
Pacific Rehabilitation & Sports Medicine, Inc.
Rebound, Inc.
Rehab Concepts Corp.
Rehabilitation Hospital Corporation of America, Inc.
Rehabilitation Hospital of Colorado Springs, Inc.
Rehabilitation Hospital of Nevada - Las Vegas, Inc.
Rehabilitation Hospital of Plano, Inc.
SelectRehab, Inc.
Sherwood Rehabilitation Hospital, Inc.
Surgery Center Holding Corporation
Surgical Care Affiliates, Inc.
Surgical Health Corporation
Surgicare of Huntsville, Inc.
Tarrant County Rehabilitation Hospital, Inc.
Terre Haute Rehabilitation Hospital, Inc.
Tyler Rehabilitation Hospital, Inc.
Western Neuro Care, Inc.
Chiron, Inc.
HEALTHSOUTH Diagnostic Centers, Inc.
HEALTHSOUTH of New Mexico, Inc.
HEALTHSOUTH S.C. of Portland, Inc.
HSC of Beaumont, Inc.
HVPG of California, Inc.
Lakeland Physicians Medical Building, Inc.
Lakeshore System Services of Florida, Inc.
Little Rock-SC, Inc.
National Imaging Affiliates of Fayetteville, Inc.
Neuro Imaging Institute, Inc.
New England Rehabilitation Hospital, Inc.
NSC Connecticut, Inc.
NSC Seattle, Inc.
SCA-Roseland, Inc.
SCA-Shelby Development Corp.
Surgicare of Laguna Hills, Inc.
Collin County Rehab Associates Limited
Partnership
By: Rehabilitation Hospital of Plano, Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
-----------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Bakersfield Rehabilitation
Hospital Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Diagnostic Center of
Colorado Springs Limited Partnership
By: Diagnostic Health Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Diagnostic Centers of
Tennessee Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------------
Xxx Xxxxxxx, its President
2
HEALTHSOUTH Diagnostic Centers of Texas
Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Meridian Point Rehabilitation
Hospital Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Northern Kentucky Rehabilitation
Hospital Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
3
HEALTHSOUTH of Largo Limited Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Fort Lauderdale Limited
Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Ohio Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Sarasota Limited Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
4
HEALTHSOUTH of Tallahassee Limited
Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Rehabilitation Center of
New Hampshire, Ltd.
By: HEALTHSOUTH Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Rehabilitation Hospital of
Arlington Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
5
HEALTHSOUTH Rehabilitation Institute of
Tucson Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Valley of the Sun Rehabilitation
Hospital Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
Rehabilitation Hospital of Nevada-Las
Vegas, L.P.
By: Rehabilitation Hospital of Nevada-Las
Vegas, Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
Sarasota LTAC Properties, LLC
By: HEALTHSOUTH Corporation
Its: Member
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
6
Southern Arizona Regional
Rehabilitation Hospital, L.P.
By: Continental Rehabilitation Hospital of
Arizona, Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
Terre Haute Regional Rehabilitation
Hospital, L.P.
By: Terre Haute Rehabilitation Hospital,
Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
--------------------------------
Xxx Xxxxxxx, its President
THE BANK OF NOVA SCOTIA TRUST COMPANY OF
NEW YORK, as Trustee
by /s/ XXXX X. XXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Trust Officer
RULE 144A/REGULATION S APPENDIX
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository for such a
Temporary Regulation S Global Security, to the extent applicable to such
transaction and as in effect from time to time.
"Definitive Security" means a certificated Initial Security or
Exchange Security or Private Exchange Security bearing, if required, the
appropriate restricted securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Distribution Compliance Period", with respect to any Securities,
means the period of 40 consecutive days beginning on and including the later of
(i) the day on which such Securities are first offered to Persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S and (ii) the issue date with respect to such Securities.
"Exchange Securities" means (1) the 10.75% Senior Notes Due 2016
issued pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to a Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"IAI" means an institutional "accredited investor", as defined in Rule
501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act.
"Initial Purchasers" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Citigroup Global Markets Inc., X.X. Xxxxxx Securities Inc.,
Deutsche Bank Securities Inc., Xxxxxxx, Xxxxx & Co. and Wachovia Capital
Markets, LLC.
"Initial Securities" means (1) $625,000,000 aggregate principal amount
of 10.75% Senior Notes Due 2016 issued on the Issue Date and (2) Additional
Securities, if any, issued in a transaction exempt from the registration
requirements of the Securities Act.
2
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 10.75% Senior Notes Due 2016
issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial Securities
issued on the Issue Date, the Purchase Agreement dated June 9, 2006, among the
Company and the Initial Purchasers, and (2) with respect to each issuance of
Additional Securities, the purchase agreement or underwriting agreement among
the Company and the Persons purchasing such Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement dated
June 14, 2006, among the Company and the Initial Purchasers and (2) with
respect to each issuance of Additional Securities issued in a transaction
exempt from the registration requirements of the Securities Act, the
registration rights agreement, if any, among the Company and the Persons
purchasing such Additional Securities under the related Purchase Agreement.
"Rule 144A Securities" means all Securities offered and sold to QIBs
in reliance on Rule 144A.
"Securities" means the Initial Securities, the Exchange Securities and
the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Securities or
Private Exchange Securities pursuant to a Registration Rights Agreement.
3
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend relating to restrictions on transfer relating to
the Securities Act set forth in Section 2.3(e) hereto.
1.2 Other Definitions
DEFINED IN
TERM SECTION:
---- --------
"Agent Members".................................................. 2.1(b)
"Global Securities".............................................. 2.1(a)
"IAI Global Security"............................................ 2.1(a)
"Permanent Regulation S Global Security"......................... 2.1(a)
"Regulation S"................................................... 2.1(a)
"Regulation S Global Security"................................... 2.1(a)
"Rule 144A"...................................................... 2.1(a)
"Rule 144A Global Security"...................................... 2.1(a)
"Temporary Regulation S Global Security"......................... 2.1(a)
2. The Securities
2.1 (a) Form and Dating. The Initial Securities will be offered and
sold by the Company pursuant to a Purchase Agreement. The Initial Securities
will be resold initially only to (i) QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the
restrictions on transfer set forth herein. Initial Securities initially resold
pursuant to Rule 144A shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form (collectively,
the "Rule 144A Global Security"); and Initial Securities initially resold
pursuant to Regulation S shall be issued initially in the form of one or more
temporary global securities in fully registered form (collectively, the
"Temporary Regulation S Global Security"), in each case without interest
coupons and with the global securities legend and the applicable restricted
securities legend set forth in Exhibit 1 hereto, which shall be deposited on
behalf of the purchasers of the Initial Securities represented thereby with the
Securities Custodian and registered in the name of the Depository or a nominee
of the Depository, duly executed by the Company and authenticated by the
Trustee as provided in this Indenture. One or more global securities in
definitive, fully registered form without interest coupons and with the global
securities legend and the applicable restricted securities legend set forth in
Exhibit 1 hereto (collectively, the "IAI Global Security") shall also be issued
on the Issue Date, deposited with the Securities Custodian, and registered in
the name of the Depositary or a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee as provided in this Indenture to
accommodate transfers of beneficial interests in the Securities to IAIs
4
subsequent to the initial distribution. Except as set forth in this Section
2.1(a), beneficial ownership interests in the Temporary Regulation S Global
Security will not be exchangeable for interests in the Rule 144A Global
Security, the IAI Global Security, a permanent global security (the "Permanent
Regulation S Global Security", and together with the Temporary Regulation S
Global Security, the "Regulation S Global Security") or any other Security
prior to the expiration of the Distribution Compliance Period and then, after
the expiration of the Distribution Compliance Period, may be exchanged for
interests in a Rule 144A Global Security, an IAI Global Security or the
Permanent Regulation S Global Security only upon certification in form
reasonably satisfactory to the Trustee that (i) beneficial ownership interests
in such Temporary Regulation S Global Security are owned either by non-U.S.
persons or U.S. persons who purchased such interests in a transaction that did
not require registration under the Securities Act and (ii) in the case of an
exchange for an IAI Global Security, certification that the interest in the
Temporary Regulation S Global Security is being transferred to an institutional
"accredited investor" under the Securities Act that is an institutional
accredited investor acquiring the securities for its own account or for the
account of an institutional accredited investor.
Beneficial interests in Temporary Regulation S Global Securities or
IAI Global Securities may be exchanged for interests in Rule 144A Global
Securities if (1) such exchange occurs in connection with a transfer of
Securities in compliance with Rule 144A and (2) the transferor of the
beneficial interest in the Temporary Regulation S Global Security or the IAI
Global Security, as applicable, first delivers to the Trustee a written
certificate (in a form satisfactory to the Trustee) to the effect that the
beneficial interest in the Temporary Regulation S Global Security or the IAI
Global Security, as applicable, is being transferred to a Person (a) who the
transferor reasonably believes to be a QIB, (b) purchasing for its own account
or the account of a QIB in a transaction meeting the requirements of Rule 144A,
and (c) in accordance with all applicable securities laws of the States of the
United States and other jurisdictions.
Beneficial interests in Temporary Regulation S Global Securities and
Rule 144A Global Securities may be exchanged for an interest in IAI Global
Securities if (1) such exchange occurs in connection with a transfer of the
securities in compliance with an exemption under the Securities Act and (2) the
transferor of the Regulation S Global Security or Rule 144A Global Security, as
applicable, first delivers to the trustee a written certificate (substantially
in the form of Exhibit 2) to the effect that (A) the Regulation S Global
Security or Rule 144A Global Security, as applicable, is being transferred (a)
to an "accredited investor" within the meaning of 501(a)(1),(2),(3) and (7)
under the Securities Act that is an institutional investor acquiring the
securities for its own account or for the account of such an institutional
accredited investor, in each case in a minimum principal amount of the
securities of $250,000, for investment purposes and not with a view to or for
offer or sale in connection with any distribution in violation of the
Securities Act and (B) in accordance with all applicable securities laws of the
States of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Security or an IAI Global
Security may be transferred to a Person who takes delivery in the form of an
interest in a Regulation S Global Security, whether before or after the
5
expiration of the Distribution Compliance Period, only if the transferor first
delivers to the Trustee a written certificate (in the form provided in the
Indenture) to the effect that such transfer is being made in accordance with
Rule 903 or 904 of Regulation S or Rule 144 (if applicable).
The Rule 144A Global Security, the IAI Global Security, the Temporary
Regulation S Global Security and the Permanent Regulation S Global Security are
collectively referred to herein as "Global Securities". The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository
as the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of
a holder of a beneficial interest in any Global Security.
(c) Definitive Securities. Except as provided in this Section 2.1 or
Section 2.3 or 2.4, owners of beneficial interests in Global Securities shall
not be entitled to receive physical delivery of Definitive Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) on
the Issue Date, an aggregate principal amount of $625,000,000 10.75% Senior
Notes Due 2016, (2) any Additional Securities for an original issue in an
aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or
Private Exchange Securities for issue only in a Registered Exchange Offer or a
Private Exchange, respectively, pursuant to a Registration Rights Agreement,
for a like principal amount of Initial Securities, in each case upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order shall
6
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated and, in the case of any
issuance of Additional Securities pursuant to Section 2.13 of the Indenture,
shall certify that such issuance is in compliance with Section 4.03 of the
Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar, duly executed by the Holder thereof or its attorney
duly authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or exchanged
pursuant to an effective registration statement under the Securities
Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C)
below, and are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Definitive Securities are being transferred to
the Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred (x)
pursuant to an exemption from registration in accordance with Rule
144A, Regulation S or Rule 144 under the Securities Act; or (y) in
reliance upon another exemption from the requirements of the
Securities Act: (i) a certification to that effect (in the form set
forth on the reverse of the Security) and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions set
forth in the legend set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged for a
7
beneficial interest in a Rule 144A Global Security, an IAI Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of
the Security, that such Definitive Security is either (A) being
transferred to a QIB in accordance with Rule 144A, (B) being
transferred to an IAI that has furnished to the Trustee a signed
letter in the form of Exhibit 2 hereto or (C) being transferred after
expiration of the Distribution Compliance Period by a Person who
initially purchased such Security in reliance on Regulation S to a
buyer who elects to hold its interest in such Security in the form of
a beneficial interest in the Permanent Regulation S Global Security;
and
(ii) written instructions directing the Trustee to make, or
to direct the Securities Custodian to make, an adjustment on its books
and records with respect to such Rule 144A Global Security (in the
case of a transfer pursuant to clause (b)(i)(A)), IAI Global Security
(in the case of a transfer pursuant to clause (b)(1)(B)) or Permanent
Regulation S Global Security (in the case of a transfer pursuant to
clause (b)(i)(B)) to reflect an increase in the aggregate principal
amount of the Securities represented by the Rule 144A Global Security,
IAI Global Security or Permanent Regulation S Global Security, as
applicable, such instructions to contain information regarding the
Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security, IAI Global Security or Permanent Regulation S Global Security, as
applicable, to be increased by the aggregate principal amount of the Definitive
Security to be exchanged and shall credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest in
the Rule 144A Global Security, IAI Global Security or Permanent Regulation S
Global Security, as applicable, equal to the principal amount of the Definitive
Security so canceled. If no Rule 144A Global Securities, IAI Global Securities
or Permanent Regulation S Global Securities, as applicable, are then
outstanding, the Company shall issue and the Trustee shall authenticate, upon
written order of the Company in the form of an Officers' Certificate of the
Company, a new Rule 144A Global Security, IAI Global Security or Permanent
Regulation S Global Security, as applicable, in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository,
in accordance with this Indenture (including applicable restrictions
on transfer set forth herein, if any) and the procedures of the
8
Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver to the Registrar a written order given in
accordance with the Depository's procedures containing information
regarding the participant account of the Depository to be credited
with a beneficial interest in the Global Security. The Registrar
shall, in accordance with such instructions instruct the Depository to
credit to the account of the Person specified in such instructions a
beneficial interest in the Global Security and to debit the account of
the Person making the transfer the beneficial interest in the Global
Security being transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global
Security to which such interest is being transferred in an amount
equal to the principal amount of the interest to be so transferred,
and the Registrar shall reflect on its books and records the date and
a corresponding decrease in the principal amount of the Global
Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global
Security may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository
or any such nominee to a successor Depository or a nominee of such
successor Depository.
(iv) In the event that Global Security is exchanged for
Definitive Securities to Section 2.4 of this Appendix, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Securities intended to ensure that such transfers comply
with Rule 144A, Regulation S or another applicable exemption under the
Securities Act, as the case may be) and such other procedures as may
from time to time be adopted by the Company.
(d) Restrictions on Transfer of Temporary Regulation S Global
Securities. During the Distribution Compliance Period, beneficial ownership
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred in accordance with the Applicable Procedures and only (i) to the
Company, (ii) in an offshore transaction in accordance with Regulation S (other
than a transaction resulting in an exchange for an interest in a Permanent
Regulation S Global Security), (iii) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any State of the United States.
(e) Legend.
9
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof), in the case of
Securities offered otherwise than in reliance on Regulation S shall
bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY
IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT
OF THE COMPANY THAT (A) THIS SECURITY MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (IV) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904
UNDER THE SECURITIES ACT, (V) PURSUANT TO EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (VI)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
10
UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES,
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE.
Each certificate evidencing a Security offered in reliance on
Regulation S shall, in addition to the foregoing, bear a legend in
substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED
ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION
S UNDER THE SECURITIES ACT.
Each Definitive Security shall also bear the following
additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such
Transfer Restricted Security for a certificated Security that does not
bear the legend set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security, if the transferor
thereof certifies in writing to the Registrar that such sale or
transfer was made in reliance on Rule 144 (such certification to be in
the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the
effectiveness of a Shelf Registration Statement with respect to such
Initial Securities or Private Exchange Securities, as the case may be,
11
all requirements pertaining to legends on such Initial Security or
such Private Exchange Security will cease to apply and the
requirements requiring any such Initial Security or such Private
Exchange Security issued to certain Holders be issued in global form
will continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Securities, all requirements pertaining to
such Initial Securities that Initial Securities be issued in global
form will continue to apply, and Exchange Securities in global form
without the restricted securities legend set forth in Exhibit 1 hereto
will be available to Holders that exchange such Initial Securities in
such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities be issued in global form will
continue to apply, and Private Exchange Securities in global form with
the global securities legend and the applicable restricted securities
legend set forth in Exhibit 1 hereto will be available to Holders that
exchange such Initial Securities in such Private Exchange.
(f) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been
exchanged for Definitive Securities, redeemed, purchased or canceled, such
Global Security shall be returned to the Depository for cancellation or
retained and canceled by the Trustee. At any time prior to such cancellation,
if any beneficial interest in a Global Security is exchanged for Definitive
Securities, redeemed, purchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by
the Trustee or the Securities Custodian, to reflect such reduction.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository)
of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures
12
of the Depository. The Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among Depository participants, members or
beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly required
by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements
hereof.
2.4 Definitive Securities.
(a) A Global Security deposited with the Depository or with
the Trustee as Securities Custodian for the Depository pursuant to Section 2.1
shall be transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 hereof and (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such
Global Security and the Depository fails to appoint a successor depository or
if at any time such Depository ceases to be a "clearing agency" registered
under the Exchange Act, in either case, and a successor depository is not
appointed by the Company within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the
issuance of Definitive Securities under this Indenture.
(b) Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by
the Depository to the Trustee located at its principal corporate trust office
in the Borough of Manhattan, The City of New York, to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Definitive Securities of
authorized denominations. Any portion of a Global Security transferred pursuant
to this Section 2.4 shall be executed, authenticated and delivered only in
denominations of $1,000 principal amount and any integral multiple thereof and
registered in such names as the Depository shall direct. Any Definitive
Security delivered in exchange for an interest in the Transfer Restricted
Security shall, except as otherwise provided by Section 2.3(e) hereof, bear the
applicable restricted securities legend and definitive securities legend set
forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
13
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(d) In the event of the occurrence of one of the events
specified in Section 2.4(a) hereof, the Company shall promptly make available
to the Trustee a reasonable supply of Definitive Securities in definitive,
fully registered form without interest coupons. In the event that such
Definitive Securities are not issued, the Company expressly acknowledges, with
respect to the right of any Holder to pursue a remedy pursuant to Section 6.06
of this Indenture, the right of any beneficial owner of Securities to pursue
such remedy with respect to the portion of the Global Security that represents
such beneficial owner's Securities as if such Definitive Securities had been
issued.
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER
THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF
SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES
ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH
OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Restricted Securities Legend for Securities offered
otherwise than in Reliance on Regulation S]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
2
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) WITHIN THE UNITED STATES TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (IV) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (V)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
[Restricted Securities Legend for Securities Offered in Reliance
on Regulation S.]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR
INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
3
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT
CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE
UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
WILL NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED
TO ABOVE, IF THEN APPLICABLE.
AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE
EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH
EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST
DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING
TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON
WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND
(C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.
AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE
EXCHANGED FOR INTERESTS IN AN IAI GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE
OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH AN
EXEMPTION UNDER THE SECURITIES ACT AND (2) THE TRANSFEROR OF THE REGULATION S
GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE
4
FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
SECURITY IS BEING TRANSFERRED (A) TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR
TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY OR AN IAI
GLOBAL SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM
OF AN INTEREST IN THE REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE
EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR
FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO
THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE
WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
5
No. __________________ $_____
10.75% Senior Notes Due 2016
HealthSouth Corporation, a Delaware corporation, promises to pay to
___________________, or registered assigns, the principal sum of _____________
Dollars on June 15, 2016.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
HEALTHSOUTH CORPORATION,
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
---------------------------
Authorized Signatory
6
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10.75% Senior Note Due 2016
1. Interest
HealthSouth Corporation, a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above; provided, however, that if
a Registration Default (as defined in the Registration Rights Agreement)
occurs, additional interest will accrue on this Security at a rate of 0.25% per
annum (increasing by an additional 0.25% per annum after each consecutive
90-day period that occurs after the date on which such Registration default
occurs up to a maximum additional interest rate of 1.00%) from and including
the date on which any such Registration Default shall occur to but excluding
the date on which all Registration Defaults have been cured. The Company will
pay interest semiannually on June 15 and December 15 of each year, commencing
December 15, 2006. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
__________. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company will pay interest on overdue principal at the rate
borne by this Security plus 1.0% per annum, and it will pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the June 1 or December 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by the Depository. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other
date as the Trustee may accept in its discretion).
7
3. Paying Agent and Registrar
Initially, The Bank of Nova Scotia Trust Company of New York, a New
York banking corporation (the "Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
14, 2006 ("Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. xx.xx. 77aaa-77bbbb) (the "Act"). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries;
consolidate, merge or transfer all or substantially all of its assets and the
assets of its subsidiaries; and engage in sale/leaseback transactions. These
covenants are subject to important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled to redeem
the Securities.
On and after June 15, 2011, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages
of principal amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on June 15 of the years set
forth below:
8
Redemption
Period Price
------ -----
2011 105.375%
2012 103.583%
2013 101.792%
2014 and thereafter 100.000%
In addition, prior to June 15, 2009, the Company shall be entitled at
its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 110.75%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds from one or
more Equity Offerings; provided, however, that (1) at least 65% of such
aggregate principal amount of Securities (which includes Additional Securities,
if any) remains outstanding immediately after the occurrence of each such
redemption (other than Securities held, directly or indirectly, by the Company
or its Affiliates); and (2) each such redemption occurs within 90 days after
the date of the related Equity Offering.
Prior to June 15, 2011, the Company shall be entitled at its option to
redeem all, but not less than all, of the Securities at a redemption price
equal to 100% of the principal amount of the Securities plus the Applicable
Premium as of, and accrued and unpaid interest to, the redemption date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date). The Company shall cause notice of such
redemption to be mailed by first-class mail to each Holder's registered
address, not less than 30 nor more than 60 days prior to the redemption date.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to
accrue on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
9
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Guaranty
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior basis by each of the Subsidiary Guarantors to the extent set
forth in the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not register the transfer of or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
Except as provided in paragraph 2 hereof, the registered Holder of
this Security may be treated as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company as general creditors and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (b) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
10
amount outstanding of the Securities. Subject to certain exceptions set forth
in the Indenture, without the consent of any Securityholder, the Company, the
Subsidiary Guarantors and the Trustee shall be entitled to amend the Indenture
or the Securities to cure any ambiguity, omission, defect or inconsistency, or
to comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities, including Subsidiary Guaranties, or
to secure the Securities, or to add additional covenants or surrender rights
and powers conferred on the Company or the Subsidiary Guarantors, or to conform
the text of the Indenture or the Securities to any provision of the
"Description of the Notes" section of the Offering Memorandum (as defined in
the Indenture) under certain circumstances, or to comply with any requirement
of the SEC in connection with qualifying the Indenture under the Act, or to
make any change that does not adversely affect the rights of any
Securityholder, or to make amendments to provisions of the Indenture relating
to the form, authentication, transfer and legending of the Securities.
14. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal
on the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon acceleration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (c) failure by the Company or any
Subsidiary Guarantor to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (d) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $50 million; (e) certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; (f) certain
judgments or decrees for the payment of money in excess of $50 million; and (g)
certain defaults with respect to Subsidiary Guaranties. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of
the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
11
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
12
21. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:
Xxx XxxxxxXxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
13
-------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
_______________________________________________________________________________
Date: _________________________ Your Signature: ____________________________
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
1. |_| to the Company; or
2. |_| pursuant to an effective registration statement
under the Securities Act of 1933; or
3. |_| inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933)
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in each
case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
14
4. |_| outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933; or
5. |_| pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933; or
6. |_| to an institutional "accredited investor" (as defined in Rule
501(a)(1),(2),(3) or (7) under the Securities Act of 1933)
that has furnished to the Trustee a signed letter containing
certain representations and agreements.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that
if box (4) is checked, the Trustee shall be entitled to require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided
by Rule 144 under such Act.
_____________________
Signature
Signature Guarantee:
____________________________________ ____________________________
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
-------------------------------------------------------------------------------
15
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ____________________ _______________________________
Notice: To be executed by
an executive officer
16
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal amount in Principal amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or increase) Securities Custodian
17
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box: |_|
|_| If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the
amount in principal amount: $
Dated: __________________ Your Signature: __________________________________
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee: __________________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
EXHIBIT 2 to APPENDIX A
Form of
Transferee Letter of Representation
[Company]
In care of
[ ]
[ ]
[ ]
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $_____________
principal amount of the 10.75% Senior Notes due 2016 (the "Securities") of
HealthSouth Corporation (the "Company").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name:________________________
Address:______________________
Taxpayer ID Number:____________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such
an institutional "accredited investor" at least $250,000 principal amount of
the Securities, and we are acquiring the Securities not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our investment
in the Securities, and we invest in or purchase securities similar to the
Securities in the normal course of our business. We, and any accounts for which
we are acting, are each able to bear the economic risk of our or its
investment.
2. We understand that the Securities have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
2
of any investor account for which we are purchasing Securities to offer, sell
or otherwise transfer such Securities prior to the date that is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (i) to
the Company, (ii) in the United States to a person whom the seller reasonably
believes is a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A, (iii) to an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that is an institutional accredited investor purchasing for its own account or
for the account of an institutional accredited investor, in each case in a
minimum principal amount of the Securities of $250,000, (iv) outside the United
States in a transaction complying with the provisions of Rule 904 under the
Securities Act, (v) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if available) or (vi) pursuant to an
effective registration statement under the Securities Act, in each of cases (i)
through (vi) subject to any requirement of law that the disposition of our
property or the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (iii) above prior to
the Resale Restriction Termination Date, the transferor shall deliver a letter
from the transferee substantially in the form of this letter to the Company and
the Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to the offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clause (iii), (iv)
or (v) above to require the delivery of an opinion of counsel, certifications
or other information satisfactory to the Company and the Trustee.
TRANSFEREE:_________________,
by:_____________________
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
---------------------
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
**/.[If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix A
and replace the Assignment Form included in this Exhibit A with the Assignment
Form included in such Exhibit 1.]
2
No. ________________ $_________
10.75% Senior Notes Due 2016
HealthSouth Corporation, a Delaware corporation, promises to pay to
______________, or registered assigns, the principal sum of _____________
Dollars on June 15, 2016.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
HEALTHSOUTH CORPORATION,
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
------------------------
Authorized Signatory
3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
10.75% Senior Note Due 2016
1. Interest
HealthSouth Corporation, a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above[; provided, however, that if
a Registration Default (as defined in the Registration Rights Agreement)
occurs, additional interest will accrue on this Security at a rate of 0.25% per
annum (increasing by an additional 0.25% per annum after each consecutive
90-day period that occurs after the date on which such Registration default
occurs up to a maximum additional interest rate of 1.00%) from and including
the date on which any such Registration Default shall occur to but excluding
the date on which all Registration Defaults have been cured.](1) The Company
will pay interest semiannually on June 15 and December 15 of each year,
commencing December 15, 2006. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from __________. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. The Company will pay interest on overdue principal at
the rate borne by this Security plus 1.0% per annum, and it will pay interest
on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the June 1 or December 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments
in respect of a certificated Security (including principal, premium and
interest) by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on a certificated Security will be made by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the relevant due date
for payment (or such other date as the Trustee may accept in its discretion).
------------------
(1) Insert if at the date of issuance of the Exchange Security or Private
Exchange Security (as the case may be) any Registration Default has occurred
with respect to the related Initial Securities during the interest period in
which such date of issuance occurs.
4
3. Paying Agent and Registrar
Initially, The Bank of Nova Scotia Trust Company of New York, a New
York banking corporation (the "Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
14, 2006 ("Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments;
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries;
consolidate, merge or transfer all or substantially all of its assets and the
assets of its subsidiaries; and engage in sale/leaseback transactions. These
covenants are subject to important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled to redeem
the Securities.
On and after June 15, 2011, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages
of principal amount, on the redemption date) plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on June 15 of the years set
forth below:
5
Redemption
Period Price
------ ----------
2011 105.375%
2012 103.583%
2013 101.792%
2014 and thereafter 100.000%
In addition, prior to June 15, 2009, the Company shall be entitled at
its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount of 110.75%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds from one or
more Equity Offerings; provided, however, that (1) at least 65% of such
aggregate principal amount of Securities (which includes Additional Securities,
if any) remains outstanding immediately after the occurrence of each such
redemption (other than Securities held, directly or indirectly, by the Company
or its Affiliates); and (2) each such redemption occurs within 90 days after
the date of the related Equity Offering.
Prior to June 15, 2011, the Company shall be entitled at its option to
redeem all, but not less than all, of the Securities at a redemption price
equal to 100% of the principal amount of the Securities plus the Applicable
Premium as of, and accrued and unpaid interest to, the redemption date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date). The Company shall cause notice of such
redemption to be mailed by first-class mail to each Holder's registered
address, not less than 30 nor more than 60 days prior to the redemption date.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to
accrue on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
6
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Guaranty
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior basis by each of the Subsidiary Guarantors to the extent set
forth in the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not register the transfer of or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
Except as provided in paragraph 2 hereto, the registered Holder of
this Security may be treated as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company as general creditors and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
13. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (1) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (2) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
7
amount outstanding of the Securities. Subject to certain exceptions set forth
in the Indenture, without the consent of any Securityholder, the Company, the
Subsidiary Guarantors and the Trustee shall be entitled to amend the Indenture,
the Security Documents or the Securities to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article 5 of the Indenture, or to
provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities,
including Subsidiary Guaranties, or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
the Subsidiary Guarantors, or to conform the text of the Indenture or the
Securities to any provision of the "Description of the Notes" section of the
Offering Memorandum (as defined in the Indenture) under certain circumstances,
or to comply with any requirement of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to make amendments to provisions of the
Indenture relating to the form, authentication, transfer and legending of the
Securities.
14. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal
on the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon acceleration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (c) failure by the Company or any
Subsidiary Guarantor to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (d) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $50 million; (e) certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; (f) certain
judgments or decrees for the payment of money in excess of $50 million; and (g)
certain defaults with respect to Subsidiary Guaranties. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of
the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
8
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
[20. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.](2)
------------------
(2) Delete if this Security is not being issued in exchange for an Initial
Security.
9
21. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:
Xxx XxxxxxXxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
10
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
_______________________________________________________________________________
Date: __________________________ Your Signature: ____________________________
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuan to Section 4.06 or 4.08 of the Indenture, check the box: |_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount
in principal amount: $
Dated: __________________ Your Signature: __________________________________
(Sign Exactly As Your Name Appears
On The Other Side Of This Security.)
Signature Guarantee: __________________________________________________________
(Signature Must Be Guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF GUARANTY AGREEMENT]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated
as of , among [GUARANTOR] (the "New Guarantor"), a subsidiary
of HEALTHSOUTH CORPORATION (or its successor), a Delaware
corporation (the "Company"), the subsidiary guarantors listed
on the signature pages hereto (the "Subsidiary Guarantors")
and THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, a New
York trust company, as trustee under the indenture referred
to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company and the Subsidiary Guarantors (the "Existing
Guarantors") has heretofore executed and delivered to the Trustee an Indenture
(the "Indenture") dated as of June 14, 2006, providing for the issuance of the
Company's 10.75% Senior Notes due 2016 (the "Securities");
WHEREAS Section 4.11 of the Indenture provides that under certain
circumstances the Company is required to cause the New Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the New
Guarantor shall unconditionally guarantee all the Company's obligations under
the Securities pursuant to a Subsidiary Guaranty on the terms and conditions
set forth herein; and
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
New Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
and severally with all Existing Guarantors, to unconditionally guarantee the
Company's obligations under the Securities on the terms and subject to the
conditions set forth in Articles 10 of the Indenture and to be bound by all
other applicable provisions of the Indenture and the Securities.
2. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
4. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental
Indenture.
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 effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
by
---------------------------------
Name:
Title:
HEALTHSOUTH CORPORATION,
by
--------------------------------
Name:
Title:
[EXISTING GUARANTORS],
by
---------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA TRUST COMPANY OF
NEW YORK, as Trustee,
by
---------------------------------
Name:
Title:
