EXHIBIT 4.1
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VANGUARD HEALTH HOLDING COMPANY II, LLC
VANGUARD HOLDING COMPANY II, INC.
and each of the Guarantors party hereto
9% SENIOR SUBORDINATED NOTES DUE 2014
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INDENTURE
Dated as of September 23, 2004
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U.S. Bank National Association
as Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1)............................................................................ 7.10
(a)(2)............................................................................ 7.10
(a)(3)............................................................................ N.A.
(a)(4)............................................................................ N.A.
(a)(5)............................................................................ 7.10
(b)............................................................................... 7.10
(c)............................................................................... N.A.
311(a)............................................................................... 7.11
(b)............................................................................... 7.11
(c)............................................................................... N.A.
312(a)............................................................................... 2.05
(b)............................................................................... 14.03
(c)............................................................................... 14.03
313(a)............................................................................... 7.06
(b)(1)............................................................................ N.A.
(b)(2)............................................................................ 7.06; 7.07
(c)............................................................................... 7.06; 14.02
(d)............................................................................... 7.06
314(a)............................................................................... 4.04; 14.02, 14.05
(b)............................................................................... N.A.
(c)(1)............................................................................ 14.04
(c)(2)............................................................................ 14.04
(c)(3)............................................................................ N.A.
(d)............................................................................... N.A.
(e)............................................................................... 14.05
(f)............................................................................... N.A.
315(a)............................................................................... 7.01
(b)............................................................................... 7.05; 14.02
(c)............................................................................... 7.01
(d)............................................................................... 7.01
(e)............................................................................... 6.11
316(a) (last sentence)............................................................... 2.09
(a)(1)(A)......................................................................... 6.05
(a)(1)(B)......................................................................... 6.04
(a)(2)............................................................................ N.A.
(b)............................................................................... 6.07
(c)............................................................................... 2.12
317(a)(1)............................................................................ 6.08
(a)(2)............................................................................ 6.09
(b)............................................................................... 2.04
318(a)............................................................................... 14.01
(b)............................................................................... N.A.
(c)............................................................................... 14.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.................................................................................... 1
Section 1.02 Other Definitions.............................................................................. 36
Section 1.03 Incorporation by Reference of Trust Indenture Act.............................................. 37
Section 1.04 Rules of Construction.......................................................................... 37
ARTICLE II THE NOTES
Section 2.01 Form and Dating................................................................................ 38
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............................................................ 40
Section 2.05 Holder Lists................................................................................... 40
Section 2.06 Transfer and Exchange.......................................................................... 41
Section 2.07 Replacement Notes.............................................................................. 56
Section 2.08 Outstanding Notes.............................................................................. 56
Section 2.09 Treasury Notes................................................................................. 57
Section 2.10 Temporary Notes................................................................................ 57
Section 2.11 Cancellation................................................................................... 57
Section 2.12 Defaulted Interest............................................................................. 57
Section 2.13 CUSIP Numbers.................................................................................. 58
Section 2.14 Issuance of Additional Senior Subordinated Notes............................................... 58
ARTICLE III REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee............................................................................. 58
Section 3.02 Selection of Notes to Be Redeemed or Purchased................................................. 59
Section 3.03 Notice of Redemption........................................................................... 59
Section 3.04 Effect of Notice of Redemption................................................................. 60
Section 3.05 Deposit of Redemption or Purchase Price........................................................ 60
Section 3.06 Notes Redeemed or Purchased in Part............................................................ 61
Section 3.07 Optional Redemption............................................................................ 61
Section 3.08 Mandatory Redemption........................................................................... 62
Section 3.09 Offer to Purchase by Application of Excess Proceeds............................................ 62
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ARTICLE IV COVENANTS
Section 4.01 Payment of Notes............................................................................... 64
Section 4.02 Maintenance of Office or Agency................................................................ 65
Section 4.03 Reports to Holders............................................................................. 65
Section 4.04 Compliance Certificate......................................................................... 66
Section 4.05 Intentionally Omitted.......................................................................... 66
Section 4.06 Intentionally Omitted.......................................................................... 66
Section 4.07 Restricted Payments............................................................................ 66
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries...................... 73
Section 4.09 Incurrence of Additional Indebtedness and Issuance of Preferred Stock.......................... 75
Section 4.10 Asset Sales.................................................................................... 80
Section 4.11 Transactions with Affiliates................................................................... 82
Section 4.12 Liens.......................................................................................... 85
Section 4.13 Conduct of Business............................................................................ 85
Section 4.14 Offer to Repurchase Upon Change of Control..................................................... 85
Section 4.15 Payments for Consent........................................................................... 87
Section 4.16 Additional Subsidiary Guarantees............................................................... 88
Section 4.17 Intentionally Omitted.......................................................................... 88
Section 4.18 Limitation on Layering......................................................................... 88
Section 4.19 Existence of Corporate Co-Issuer............................................................... 88
ARTICLE V SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of All or Substantially All Assets of the Issuers................ 88
Section 5.02 Successor Corporation Substituted.............................................................. 90
Section 5.03 Merger, Consolidation or Sale of All or Substantially All Assets by a Guarantor................ 90
Section 5.04 Successor Guarantor Substituted................................................................ 91
ARTICLE VI DEFAULTS AND REMEDIES
Section 6.01 Events of Default.............................................................................. 91
Section 6.02 Acceleration................................................................................... 93
Section 6.03 Other Remedies................................................................................. 93
Section 6.04 Waiver of Past Defaults........................................................................ 93
Section 6.05 Control by Majority............................................................................ 94
Section 6.06 Limitation on Suits............................................................................ 95
Section 6.07 Rights of Holders of Notes to Receive Payment.................................................. 95
Section 6.08 Collection Suit by Trustee..................................................................... 95
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Section 6.09 Trustee May File Proofs of Claim.............................................................. 95
Section 6.10 Priorities.................................................................................... 96
Section 6.11 Undertaking for Costs......................................................................... 96
ARTICLE VII TRUSTEE
Section 7.01 Duties of Trustee............................................................................. 97
Section 7.02 Rights of Trustee............................................................................. 98
Section 7.03 Individual Rights of Trustee.................................................................. 99
Section 7.04 Trustee's Disclaimer.......................................................................... 99
Section 7.05 Notice of Defaults............................................................................ 99
Section 7.06 Reports by Trustee to Holders of the Notes.................................................... 99
Section 7.07 Compensation and Indemnity.................................................................... 100
Section 7.08 Replacement of Trustee........................................................................ 101
Section 7.09 Successor Trustee by Merger, etc.............................................................. 102
Section 7.10 Eligibility; Disqualification................................................................. 102
Section 7.11 Preferential Collection of Claims Against the Issuers......................................... 102
ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...................................... 102
Section 8.02 Legal Defeasance and Discharge................................................................ 102
Section 8.03 Covenant Defeasance........................................................................... 103
Section 8.04 Conditions to Legal or Covenant Defeasance.................................................... 104
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.................................................................................... 105
Section 8.06 Repayment to Issuers.......................................................................... 105
Section 8.07 Reinstatement................................................................................. 106
ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................... 106
Section 9.02 With Consent of Holders of Notes.............................................................. 107
Section 9.03 Compliance with Trust Indenture Act........................................................... 109
Section 9.04 Revocation and Effect of Consents............................................................. 109
Section 9.05 Notation on or Exchange of Notes.............................................................. 109
Section 9.06 Trustee to Sign Amendments, etc............................................................... 109
ARTICLE X SUBORDINATION
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Section 10.01 Agreement to Subordinate...................................................................... 109
Section 10.02 Liquidation, Dissolution, Bankruptcy.......................................................... 110
Section 10.03 Default on Designated Senior Debt............................................................. 111
Section 10.04 Acceleration of Payment of Senior Subordinated Notes.......................................... 111
Section 10.05 When Distribution Must Be Paid Over........................................................... 112
Section 10.06 Notice by Issuers............................................................................. 112
Section 10.07 Subrogation................................................................................... 112
Section 10.08 Relative Rights............................................................................... 112
Section 10.09 Subordination May Not Be Impaired by Issuers.................................................. 113
Section 10.10 Distribution or Notice to Representative...................................................... 113
Section 10.11 Rights of Trustee and Paying Agent............................................................ 113
Section 10.12 Trustee to Effectuate Subordination........................................................... 113
Section 10.13 Article 10 Not to Prevent Events of Default or Limit Right To Accelerate...................... 113
Section 10.14 Trust Monies Not Subordinated................................................................. 114
Section 10.15 Trustee Entitled to Rely...................................................................... 114
Section 10.16 Intentionally Omitted......................................................................... 114
Section 10.17 Reliance by Holders of Senior Debt on Subordination Provisions................................ 114
Section 10.18 Authorization to Effect Subordination......................................................... 115
ARTICLE XI SUBORDINATION OF GUARANTEES
Section 11.01 Agreement to Subordinate...................................................................... 115
Section 11.02 Liquidation, Dissolution, Bankruptcy.......................................................... 116
Section 11.03 Default on Designated Senior Debt............................................................. 117
Section 11.04 Acceleration of Payment of Senior Subordinated Notes.......................................... 117
Section 11.05 When Distribution Must Be Paid Over........................................................... 118
Section 11.06 Notice by Issuers or Guarantors............................................................... 118
Section 11.07 Subrogation................................................................................... 118
Section 11.08 Relative Rights............................................................................... 118
Section 11.09 Subordination May Not Be Impaired by a Guarantor.............................................. 119
Section 11.10 Distribution or Notice to Representative...................................................... 119
Section 11.11 Rights of Trustee and Paying Agent............................................................ 119
Section 11.12 Trustee to Effectuate Subordination........................................................... 119
Section 11.13 Article 10 Not to Prevent Events of Default or Limit Right To Accelerate...................... 119
Section 11.14 Trust Monies Not Subordinated................................................................. 120
Section 11.15 Trustee Entitled to Rely...................................................................... 120
Section 11.16 Intentionally Omitted......................................................................... 120
Section 11.17 Reliance by Holders of Senior Debt on Subordination Provisions................................ 120
Section 11.18 Authorization to Effect Subordination......................................................... 121
ARTICLE XII SENIOR SUBORDINATED NOTE GUARANTEES
Section 12.01 Senior Subordinated Note Guarantees........................................................... 121
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Section 12.02 Limitation on Liability....................................................................... 124
Section 12.03 Release....................................................................................... 124
Section 12.04 Successors and Assigns........................................................................ 125
Section 12.05 No Waiver..................................................................................... 125
Section 12.06 Modification.................................................................................. 126
Section 12.07 Execution of Supplemental Indenture for Future Guarantors..................................... 126
ARTICLE XIII SATISFACTION AND DISCHARGE
Section 13.01 Satisfaction and Discharge.................................................................... 126
Section 13.02 Application of Trust Money.................................................................... 127
ARTICLE XIV MISCELLANEOUS
Section 14.01 Trust Indenture Act Controls.................................................................. 128
Section 14.02 Notices....................................................................................... 128
Section 14.03 Communication by Holders of Notes with Other Holders of Notes................................. 129
Section 14.04 Certificate and Opinion as to Conditions Precedent............................................ 129
Section 14.05 Statements Required in Certificate or Opinion................................................. 129
Section 14.06 Rules by Trustee and Agents................................................................... 130
Section 14.07 No Personal Liability of Directors, Officers, Employees and Stockholders...................... 130
Section 14.08 Governing Law................................................................................. 130
Section 14.09 Successors.................................................................................... 130
Section 14.10 Severability.................................................................................. 130
Section 14.11 Counterpart Originals......................................................................... 130
Section 14.12 Table of Contents, Headings, etc.............................................................. 130
EXHIBITS
Exhibit A1 FORM OF NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY SENIOR SUBORDINATED GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of September 23, 2004 among Vanguard Health
Holding Company II, LLC, a Delaware limited liability company, ("VHS Holdco
II"), Vanguard Holding Company II, Inc., a Delaware corporation and a
Wholly-Owned Subsidiary (as defined) of VHS Holdco II (the "Subordinated Notes
Co-Issuer," and together with VHS Holdco II, the "Issuers"), Vanguard Health
Holding Company I, LLC ("VHS Holdco I"), Vanguard Health Systems, Inc.
("Vanguard"), the Subsidiary Guarantors (as defined) and U.S. Bank National
Association, a national banking association, as trustee (the "Trustee").
The Issuers, VHS Holdco I, Vanguard, the Subsidiary Guarantors and
the Trustee agree as follows for the benefit of each other and for the equal and
ratable benefit of the Holders (as defined) of (a) the $575,000,000 aggregate
principal amount of the Issuers' 9% Senior Subordinated Notes due 2014 (the
"Initial Senior Subordinated Notes"), (b) any Additional Senior Subordinated
Notes (as defined) that may be issued after the date hereof and (c) if and when
issued pursuant to the Senior Subordinated Registration Rights Agreement (as
defined herein), the Issuers' Senior Subordinated Exchange Notes (as defined
herein) issued in the Senior Subordinated Registered Exchange Offer (as defined
herein) in exchange for any outstanding Initial Senior Subordinated Notes or
Additional Senior Subordinated Notes (all such securities in clauses (a), (b)
and (c) being referred to collectively as the "Senior Subordinated Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Restricted Subsidiary of
such specified Person;
(2) Indebtedness secured by an existing Lien encumbering any
asset acquired by such specified Person; and
(3) Indebtedness of any other Person assumed in connection
with, and existing at the time of, an acquisition by a Restricted
Subsidiary of the property or assets that constitute substantially all of
a division or line of business of such Person.
but excluding in any event Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Restricted Subsidiary of, or such assets or property being acquired by, such
specified Person.
"Additional Interest" means any additional interest then owing in
respect of the Senior Subordinated Notes pursuant to the provisions of the
Senior Subordinated Registration Rights Agreement.
"Additional Senior Subordinated Notes" means additional Senior
Subordinated Notes (other than the Initial Senior Subordinated Notes) issued
under this Senior Subordinated
Indenture in accordance with Sections 2.14 and 4.09 hereof, as part of the same
series as the Initial Senior Subordinated Notes.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or
additional paying agent.
"Applicable Premium" means, with respect to any Senior Subordinated
Note on the applicable redemption date, the greater of:
(1) 1.0% of the then outstanding principal amount of the
Senior Subordinated Note; and
(2) the excess of: (A) the present value at the redemption
date of (i) the redemption price of the Senior Subordinated Note at
October 1, 2009, (such redemption price being set forth in the table
appearing in Section 3.07(c) hereof) plus (ii) all required interest
payments due on the Senior Subordinated Note through October 1, 2009,
(excluding accrued but unpaid interest), computed using a discount rate
equal to the Treasury Rate as of such redemption date plus 50 basis
points; over (B) the then outstanding principal amount of the Senior
Subordinated Note.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Senior Subordinated Global Note,
the rules and procedures of the Depositary, Euroclear and Clearstream that apply
to such transfer or exchange.
"Asset Sale" means (a) the sale, conveyance, transfer or other
disposition (whether in a single transaction or a series of related
transactions) of property or assets of VHS Holdco II or any Restricted
Subsidiary (each referred to in this definition as a "disposition") or (b) the
issuance or sale of Equity Interests of any Restricted Subsidiary, other than
directors' qualifying Equity Interests or Equity Interests required by
applicable law to be held by a Person other than VHS Holdco II or a Restricted
Subsidiary (whether in a single transaction or a series of related
transactions), in each case, other than:
(1) a disposition of Cash Equivalents or obsolete or worn out
property or equipment in the ordinary course of business or inventory (or
other assets) held for sale in the ordinary course of business;
(2) the disposition of all or substantially all of the assets
of either of the Issuers in a manner permitted pursuant Article 5 hereof
or any disposition that constitutes a Change of Control pursuant to this
Senior Subordinated Indenture;
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(3) the making of any Restricted Payment or Permitted
Investment that is permitted to be made, and is made, pursuant to Section
4.07 hereof;
(4) any disposition of assets or issuance or sale of Equity
Interests of any Restricted Subsidiary in any transaction or series of
related transactions with an aggregate fair market value of less than
$10.0 million;
(5) any disposition of property or assets or issuance of
securities by a Restricted Subsidiary to VHS Holdco II or by VHS Holdco II
or a Restricted Subsidiary to another Restricted Subsidiary;
(6) the lease, assignment, license or sublease of any real or
personal property in the ordinary course of business;
(7) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary;
(8) sales of assets received by VHS Holdco II or any
Restricted Subsidiary upon foreclosures on a Lien;
(9) sales of Securitization Assets and related assets of the
type specified in the definition of "Securitization Financing" to a
Securitization Subsidiary in connection with any Qualified Securitization
Financing;
(10) a transfer of Securitization Assets and related assets of
the type specified in the definition of "Securitization Financing" (or a
fractional undivided interest therein) by a Securitization Subsidiary in a
Qualified Securitization Financing;
(11) any exchange of assets for assets related to a Permitted
Business of comparable market value, as determined in good faith by VHS
Holdco II, which in the event of an exchange of assets with a fair market
value in excess of (A) $25.0 million shall be evidenced by a certificate
of a Responsible Officer of VHS Holdco II, and (B) $50.0 million shall be
set forth in a resolution approved in good faith by at least a majority of
the Board of Directors of VHS Holdco II;
(12) the substantially contemporaneous sale and leaseback of
an asset; provided that the sale and leaseback occurs within 180 days
after the date of the acquisition of the asset by VHS Holdco II or any
Restricted Subsidiary; and
(13) the sale or transfer, in the ordinary course of business
consistent with past practice, of receivables owing to VHS Holdco II or
any Restricted Subsidiary for the purpose of collection of outstanding
balances thereunder.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any
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particular "person" (as that term is used in Section 13(d)(3) of the Exchange
Act), such "person" will be deemed to have beneficial ownership of all
securities that such "person" has the right to acquire by conversion or exercise
of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation or any committee thereof duly authorized to act on behalf
of such board;
(2) with respect to a limited liability company, the board of
directors or other governing body, and in the absence of same, the manager
or board of managers or the managing member or members or any controlling
committee thereof;
(3) with respect to a partnership, the board of directors of
the general partner or manager of the partnership; and
(4) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Senior Subordinated
Registration Rights Agreement.
"Business Day" means a day other than a Saturday, Sunday or other
day on which banking institutions are authorized or required by law to close in
New York State.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Capitalized Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized and reflected as a
liability on a balance sheet (excluding the footnotes thereto) in accordance
with GAAP.
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"Captive Insurance Subsidiary" means a Subsidiary of VHS Holdco II
or any Restricted Subsidiary established for the purpose of insuring the health
care businesses or facilities owned or operated by VHS Holdco II or any of its
Subsidiaries or any physician employed by or on the medical staff of any such
business or facility.
"Cash Contribution Amount" means the aggregate amount of cash
contributions made to the capital of the Issuers described in the definition of
"Contribution Indebtedness."
"Cash Equivalents" means:
(1) United States dollars or, in the case of any Foreign
Subsidiary, such local currencies held by it from time to time in the
ordinary course of business;
(2) 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 in each case with maturities not exceeding two
years;
(3) certificates of deposit and time deposits with maturities
of 12 months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding 12 months and overnight bank deposits, in
each case, with any lender party to the Credit Agreement or with any
commercial bank having capital and surplus in excess of $500.0 million;
(4) repurchase obligations for underlying securities of the
types described in clauses (2) and (3) above entered into with any
financial institution meeting the qualifications specified in clause (3)
above;
(5) commercial paper maturing within 12 months after the date
of acquisition and having a rating of at least A-1 from Xxxxx'x or P-1
from S&P;
(6) securities with maturities of two years or less from the
date of acquisition issued or fully guaranteed by any state or
commonwealth of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least A by S&P or
A-2 by Xxxxx'x;
(7) investment funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through
(6) of this definition; and
(8) money market funds that (A) comply with the criteria set
forth in Rule 2a-7 under the Investment Company Act of 1940, (B) are rated
AAA by S&P and Aaa by Xxxxx'x and (C) have portfolio assets of at least
$500.0 million.
"Change of Control" means the occurrence of any of the following:
(1) the sale, lease, transfer or other conveyance, in one or a
series of related transactions, of all or substantially all of the assets
of VHS Holdco II and its Subsidiaries, taken as a whole, to any Person
other than a Permitted Holder;
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(2) any of Vanguard, VHS Holdco I or either of the Issuers
becomes aware of (by way of a report or any other filing pursuant to
Section 13(d) of the Exchange Act, proxy, vote, written notice or
otherwise) the acquisition by any Person or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor
provision), including any group acting for the purpose of acquiring,
holding or disposing of securities (within the meaning of Rule 13d-5(b)(1)
under the Exchange Act), other than the Permitted Holders, in a single
transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any
successor provision), of more than 50% of the total voting power of the
Voting Stock of either of the Issuers or any of their respective direct or
indirect parent corporations or entities; or
(3) (A) prior to the first public offering of common stock of
any of Vanguard, VHS Holdco I or either of the Issuers, the first day on
which the Board of Directors of Vanguard shall cease to consist of a
majority of directors who (i) were members of the Board of Directors of
Vanguard on the Issue Date or (ii) were either (x) nominated for election
by the Board of Directors of Vanguard, a majority of whom were directors
on the Issue Date or whose election or nomination for election was
previously approved by a majority of such directors, or (y) designated or
appointed by a Permitted Holder (each of the directors selected pursuant
to clauses (A)(i) and (A)(ii), "Continuing Directors") and (B) after the
first public offering of common stock of any of Vanguard, VHS Holdco I or
either of the Issuers, (i) if such public offering is of common stock of
Vanguard, the first day on which a majority of the members of the Board of
Directors of Vanguard are not Continuing Directors, (ii) if such public
offering is of common stock of VHS Holdco I, the first day on which a
majority of the members of the Board of Directors of VHS Holdco I are not
Continuing Directors or (iii) if such public offering is of either of the
Issuers' common stock, the first day on which a majority of the members of
the Board of Directors of such Issuer are not Continuing Directors.
"Clearstream" means Clearstream Banking, S.A.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Consolidated Depreciation and Amortization Expense" means with
respect to any Person for any period, the total amount of depreciation and
amortization expense, including the amortization of deferred financing fees, of
such Person and its Restricted Subsidiaries for such period on a consolidated
basis and otherwise determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person
for any period, (a) the sum, without duplication, of: (1) consolidated interest
expense of such Person and its Restricted Subsidiaries for such period
(including amortization of original issue discount, the interest component of
Capitalized Lease Obligations and net payments (if any) pursuant to interest
rate Hedging Obligations, but excluding amortization of deferred financing fees,
expensing of any bridge or other financing fees and expenses and (2)
consolidated capitalized interest of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued
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(including, without limitation, Securitization Fees), less (b) interest income
of such Person and its Restricted Subsidiaries (other than cash interest income
of the Captive Insurance Subsidiaries) for such period.
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) any net after-tax extraordinary, unusual or nonrecurring
gains or losses (less all fees and expenses relating thereto) or income or
expense or charge (including, without limitation, severance, relocation
and other restructuring costs) including, without limitation, any
severance expense, and fees, expenses or charges related to any offering
of Equity Interests of such Person, any Investment, acquisition or
Indebtedness permitted to be incurred hereunder (in each case, whether or
not successful), including all fees, expenses, charges and change in
control payments related to the Transactions, in each case shall be
excluded;
(2) the Net Income for such period shall not include the
cumulative effect of a change in accounting principles during such period;
(3) any net after-tax income or loss from discontinued
operations and any net after-tax gain or loss on disposal of discontinued
operations shall be excluded;
(4) any net after-tax gains or losses (less all fees and
expenses or charges relating thereto) attributable to business
dispositions or asset dispositions other than in the ordinary course of
business (as determined in good faith by the Board of Directors of VHS
Holdco II) shall be excluded;
(5) any net after-tax income or loss (less all fees and
expenses or charges relating thereto) attributable to the early
extinguishment of indebtedness shall be excluded;
(6) an amount equal to the amount of Tax Distributions under
Section 4.07(b)(9)(B) hereof actually made to VHS Holdco I, Vanguard or
VHS Holdings LLC in respect of the net taxable income allocated by VHS
Holdco II to VHS Holdco I, Vanguard or VHS Holdings LLC for such period
shall be included as though such amounts had been paid as income taxes
directly by VHS Holdco II;
(7) (A) the Net Income for such period of any Person that is
not a Subsidiary, or that is an Unrestricted Subsidiary, or that is
accounted for by the equity method of accounting, shall be included only
to the extent of the amount of dividends or distributions or other
payments in respect of equity that are actually paid in cash (or to the
extent converted into cash) by the referent Person to VHS Holdco II or a
Restricted Subsidiary thereof in respect of such period and (B) without
duplication, the Net Income for such period shall include any dividend,
distribution or other payments in respect of equity paid in cash by such
Person to VHS Holdco II or a Restricted Subsidiary thereof in excess of
the amounts included in clause (A);
7
(8) any increase in amortization or depreciation or any
one-time non-cash charges resulting from purchase accounting in connection
with the Transactions or any acquisition that is consummated prior to or
after the Issue Date shall be excluded;
(9) accruals and reserves that are established within twelve
months after the Issue Date and that are so required to be established as
a result of the Transactions in accordance with GAAP shall be excluded;
(10) any non-cash impairment charges resulting from the
application of Statements of Financial Accounting Standards No. 142 and
No. 144 and the amortization of intangibles pursuant to Statement of
Financial Accounting Standards No. 141 shall be excluded;
(11) any non-cash compensation expense realized from grants of
stock appreciation or similar rights, stock options or other rights to
officers, directors and employees of such Person or any of its Restricted
Subsidiaries shall be excluded; and
(12) solely for the purpose of determining the amount
available for Restricted Payments under Section 4.07(a)(4)(C)(i) hereof,
the Net Income for such period of any Restricted Subsidiary (other than a
Guarantor) shall be excluded if the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of its Net Income is
not at the date of determination permitted without any prior governmental
approval (which has not been obtained) or, directly or indirectly, by the
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule, or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, unless such
restriction with respect to the payment of dividends or in similar
distributions has been legally waived; provided that Consolidated Net
Income of such Person shall be increased by the amount of dividends or
distributions or other payments that are actually paid in cash (or to the
extent converted into cash) by such Person to VHS Holdco II or any
Restricted Subsidiary thereof in respect of such period, to the extent not
already included therein.
Notwithstanding the foregoing, for the purpose of Section
4.07(a)(4)(C) only (other than clause (iv) thereof), there shall be excluded
from Consolidated Net Income any income arising from any sale or other
disposition of Restricted Investments made by VHS Holdco II and the Restricted
Subsidiaries, any repurchases and redemptions of Restricted Investments by VHS
Holdco II and the Restricted Subsidiaries, any repayments of loans and advances
which constitute Restricted Investments by VHS Holdco II and any Restricted
Subsidiary, any sale of the stock of an Unrestricted Subsidiary or any
distribution or dividend from an Unrestricted Subsidiary, in each case only to
the extent such amounts increase the amount of Restricted Payments permitted
under Section 4.07(a)(4)(C)(iv) hereof.
"Contingent Obligations" means, with respect to any Person, any
obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property
8
constituting direct or indirect security therefor; (b) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation against loss in respect thereof.
"Contribution Indebtedness" means Indebtedness of the Issuers or any
Subsidiary Guarantor in an aggregate principal amount not greater than twice the
aggregate amount of cash contributions (other than Excluded Contributions) made
to the capital of the Issuers after the Issue Date; provided that:
(1) if the aggregate principal amount of such Contribution
Indebtedness is greater than the aggregate amount of such cash
contributions to the capital of the Issuers, the amount in excess shall be
Indebtedness (other than Secured Indebtedness) with a Stated Maturity
later than the Stated Maturity of the Senior Subordinated Notes, and
(2) such Contribution Indebtedness (A) is Incurred within 180
days after the making of such cash contribution and (B) is so designated
as Contribution Indebtedness pursuant to an Officers' Certificate on the
incurrence date thereof.
"Corporate Trust Office of the Trustee" will be at the address of
the Trustee specified in Section 14.02 hereof or such other address as to which
the Trustee may give notice to the Issuers.
"Credit Agreement" means that certain Credit Agreement, dated as of
September 23, 2004 among VHS Holdco I, the Issuers, the Lenders party thereto,
Bank of America, N.A. as administrative agent, Citicorp North America, Inc., as
syndication agent, the other agents named therein, and Banc of America
Securities LLC and Citigroup Global Markets Inc., as joint lead arrangers and
book runners, together with all agreements, notes, instruments and documents
executed or delivered pursuant thereto and in connection therewith, including,
without limitation, all mortgages, other security documents and guaranties, in
each case as amended (including any amendment and restatement), supplemented,
extended, renewed, replaced (by one or more credit facilities, debt instruments,
indentures and/or related documentation) or otherwise modified from time to
time, including, without limitation, any agreement increasing the amount of,
extending the maturity of or refinancing in whole or in part (including, but not
limited to, by the inclusion of additional or different lenders or financial
institutions thereunder or additional borrowers or guarantors thereof) all or
any portion of the Indebtedness under such agreement or any successor agreement
or agreements and whether by the same or any other agent, lender or group of
lenders or other financial institutions.
"Custodian" means the Trustee, as custodian with respect to the
Senior Subordinated Notes in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
9
"Definitive Note" means a certificated Senior Subordinated Note
registered in the name of the Holder thereof and issued in accordance with
Section 2.06 hereof, substantially in the form of Exhibit A1 hereto except that
such Senior Subordinated Note shall not bear the Senior Subordinated Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Senior
Subordinated Global Note" attached thereto.
"Delayed Draw Term Loan Portions" means (a) the $150.0 million
available under the Credit Agreement, which may be drawn within the period
specified (including any extensions thereof) after the Issue Date to finance the
acquisition of hospital properties and related properties, to fund working
capital and capital expenditures in connection therewith and, to the extent of
any excess availability, to fund the Issuers' working capital, capital
expenditures and general corporate needs, and (b) the $175.0 million available
under the Credit Agreement, which may be drawn at any time during the period
specified (including any extensions thereof) following the Issue Date for
working capital and general corporate requirements, including permitted
acquisitions.
"Depositary" means, with respect to the Senior Subordinated Notes
issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 hereof as the Depositary with respect to the Senior Subordinated
Notes, and any and all successors thereto appointed as depositary hereunder and
having become such pursuant to the applicable provision of this Senior
Subordinated Indenture.
"Designated Non-cash Consideration" means the fair market value of
non-cash consideration received by VHS Holdco II or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
"Designated Non-cash Consideration" pursuant to an Officers' Certificate setting
forth the basis of such valuation, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Non-cash
Consideration.
"Designated Preferred Stock" means Preferred Stock of the Issuers or
any direct or indirect parent company of the Issuers (other than Disqualified
Stock), that is issued for cash (other than to the Issuers or any of their
Subsidiaries or an employee stock ownership plan or trust established by the
Issuers or any of their Subsidiaries) and is so designated as Designated
Preferred Stock, pursuant to an Officers' Certificate, on the issuance date
thereof, the cash proceeds of which are excluded from the calculation set forth
in Section 4.07(a)(4)(C) hereof.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Agreement;
and
(2) any other Senior Debt permitted under the Senior Subordinated
Indenture the principal amount of which is $25.0 million or more and that
has been designated by the Issuers (or the relevant Guarantor which incurs
such debt) in the instrument evidencing that Senior Debt as "Designated
Senior Debt."
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by the terms of any security into
which it is convertible or for which it is putable or exchangeable), or upon the
happening of any event, matures or is
10
mandatorily redeemable (other than as a result of a change of control or asset
sale), pursuant to a sinking fund obligation or otherwise, or is redeemable at
the option of the holder thereof (other than as a result of a change of control
or asset sale), in whole or in part, in each case prior to the date 91 days
after the earlier of the Final Maturity Date of the Senior Subordinated Notes or
the date the Senior Subordinated Notes are no longer outstanding; provided (a)
that if such Capital Stock is issued to any plan for the benefit of employees of
the Issuers or their Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by either of the Issuers or their Subsidiaries in
order to satisfy applicable statutory or regulatory obligations and (b) any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require either of the Issuers or
the Subsidiary that issued such Capital Stock to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale, will not constitute
Disqualified Stock.
"Domestic Subsidiary" means any Restricted Subsidiary of VHS Holdco
II that was formed under the laws of the United States or any state of the
United States or the District of Columbia.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period
(a) plus, without duplication, and in each case to the extent
deducted in calculating Consolidated Net Income for such period:
(1) provision for taxes based on income, profits or capital of
such Person for such period, including, without limitation, state,
franchise and similar taxes (including any Tax Distribution taken into
account in calculating Consolidated Net Income), plus
(2) Consolidated Interest Expense of such Person for such
period, plus
(3) Consolidated Depreciation and Amortization Expense of such
Person for such period, plus
(4) any reasonable expenses or charges related to the
Transactions, any Equity Offering, Permitted Investment, acquisition,
recapitalization or Indebtedness permitted to be incurred under this
Senior Subordinated Indenture, plus
(5) the amount of any restructuring charges (which, for the
avoidance of doubt, shall include retention, severance, systems
establishment cost or excess pension charges), plus
(6) the minority interest expense consisting of subsidiary
income attributable to minority equity interests of third parties in any
non-Wholly-Owned Subsidiary in such period or any prior period, except to
the extent of dividends declared or paid on Equity Interests held by third
parties, plus
(7) the non-cash portion of "straight-line" rent expense, plus
11
(8) the amount of any expense to the extent a corresponding
amount is received in cash by VHS Holdco II and its Restricted
Subsidiaries from a Person other than VHS Holdco II or any Subsidiary of
VHS Holdco II under any agreement providing for reimbursement of any such
expense; provided such reimbursement payment has not been included in
determining Consolidated Net Income or EBITDA (it being understood that if
the amounts received in cash under any such agreement in any period exceed
the amount of expense in respect of such period, such excess amounts
received may be carried forward and applied against expense in future
periods), plus
(9) the amount of management, consulting, monitoring and
advisory fees and related expenses paid to the Sponsors or any other
Permitted Holder (or any accruals related to such fees and related
expenses) during such period; provided that such amount shall not exceed
in any four quarter period the greater of (A) $6.0 million and (B) 2.0% of
EBITDA of VHS Holdco II and its Restricted Subsidiaries for each period,
plus
(10) without duplication, any other non-cash charges
(including any impairment charges and the impact of purchase accounting,
including, but not limited to, the amortization of inventory step-up)
(excluding any such charge that represents an accrual or reserve for a
cash expenditure for a future period), plus
(11) any net losses resulting from Hedging Obligations entered
into in the ordinary course of business relating to intercompany loans, to
the extent that the notional amount of the related Hedging Obligation does
not exceed the principal amount of the related intercompany loan,
(b) less the sum of, without duplication:
(1) non-cash items increasing Consolidated Net Income for such
period (excluding any items which represent the reversal of any
accrual of, or cash reserve for, anticipated cash charges or asset
valuation adjustments made in any prior period);
(2) the minority interest income consisting of subsidiary
losses attributable to the minority equity interests of third
parties in any non-Wholly-Owned Subsidiary,
(3) the cash portion of "straight-line" rent expense which
exceeds the amount expensed in respect of such rent expense and
(4) any net gains resulting from Hedging Obligations entered
into in the ordinary course of business relating to intercompany
loans, to the extent that the notional amount of the related Hedging
Obligation does not exceed the principal amount of the related
intercompany loan.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private sale of common stock
or Preferred Stock of the Issuers or any of their direct or indirect parent
corporations (excluding Disqualified
12
Stock), other than (a) public offerings with respect to common stock of the
Issuers or of any direct or indirect parent corporation of the Issuers
registered on Form S-8 (or any successor form that provides for registration of
securities offered to employees of the registrant) and (b) any such public or
private sale that constitutes an Excluded Contribution.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
"Excluded Contribution" means net cash proceeds, marketable
securities or Qualified Proceeds, in each case received after the Issue Date by
VHS Holdco II and its Restricted Subsidiaries from:
(1) contributions to its common equity capital; and
(2) the sale (other than to a Subsidiary of VHS Holdco II or
to any management equity plan or stock option plan or any other management
or employee benefit plan or agreement of VHS Holdco II or any Subsidiary
of VHS Holdco II) of Capital Stock (other than Disqualified Stock),
in each case designated as Excluded Contributions pursuant to an Officers'
Certificate on the date such capital contributions are made or the date such
Equity Interests are sold, as the case may be, which are excluded from the
calculation set forth in Section 4.07(a)(4)(C) hereof.
"Existing Indebtedness" means Indebtedness of VHS Holdco II and its
Subsidiaries (after giving effect to the Transactions) in existence on the Issue
Date.
"Existing Vanguard Senior Subordinated Notes" means the 9-3/4%
Senior Subordinated Notes due 2011 issued by Vanguard pursuant to an indenture
dated as of July 30, 2001 among Vanguard, the Guarantors (as defined therein)
and Bank One Trust Company, N.A., as supplemented.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period consisting of such Person's and its Restricted Subsidiaries' most
recently ended four fiscal quarters for which internal financial statements are
available, the ratio of EBITDA of such Person for such period to the Fixed
Charges of such Person for such period. In the event that VHS Holdco II or any
Restricted Subsidiary incurs, assumes, guarantees or repays any Indebtedness or
issues or repays Disqualified Stock or Preferred Stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or repayment of Indebtedness, or such issuance or
redemption of Disqualified Stock or Preferred Stock, as if the same had occurred
at the beginning of the applicable four-quarter period. For purposes of making
the computation referred to above, Investments, acquisitions, dispositions,
mergers or consolidations (as determined in accordance with GAAP) that have been
made by VHS Holdco II or any Restricted
13
Subsidiary during the four-quarter reference period or subsequent to such
reference period and on or prior to or simultaneously with the Calculation Date
shall be calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, mergers, consolidations (and the change in any
associated fixed charge obligations and the change in EBITDA resulting
therefrom) had occurred on the first day of the four-quarter reference period.
If since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into VHS Holdco II or any Restricted
Subsidiary since the beginning of such period) shall have made any Investment,
acquisition (including the Transactions), disposition, merger, consolidation
that would have required adjustment pursuant to this definition, then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect thereto for
such period as if such Investment, acquisition (including the Transactions),
disposition, merger or consolidation had occurred at the beginning of the
applicable four-quarter period. For purposes of this definition, whenever pro
forma effect is to be given to an acquisition (including the Transactions) or
other Investment and the amount of income or earnings relating thereto, the pro
forma calculations shall be determined in good faith by a responsible financial
or accounting Officer of VHS Holdco II and such pro forma calculations may
include operating expense reductions for such period resulting from the
acquisition which is being given pro forma effect that have been realized or for
which the steps necessary for realization have been taken or are reasonably
expected to be taken within six months following any such acquisition,
including, but not limited to, the execution or termination of any contracts,
the termination of any personnel or the closing (or approval by the Board of
Directors of VHS Holdco II of any closing) of any facility, as applicable;
provided that, in either case, such adjustments are set forth in an Officers'
Certificate signed by the chief financial officer of VHS Holdco II and another
Officer which states (a) the amount of such adjustment or adjustments, (b) that
such adjustment or adjustments are based on the reasonable good faith beliefs of
the Officers executing such Officers' Certificate at the time of such execution
and (c) that any related incurrence of Indebtedness is permitted pursuant to the
Senior Subordinated Indenture. 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 Calculation Date had been
the applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness). Interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by a responsible financial or accounting officer of VHS Holdco II to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP. For purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. Interest on Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rate, shall be deemed to have been
based upon the rate actually chosen, or, if none, then based upon such optional
rate chosen as VHS Holdco II may designate.
"Fixed Charges" means, with respect to any Person for any period,
the sum of, without duplication, (a) Consolidated Interest Expense of such
Person for such period, (b) all cash dividends paid, accrued and/or scheduled to
be paid or accrued during such period (excluding items eliminated in
consolidation) on any series of Preferred Stock of such Person and (c) all cash
dividends paid, accrued and/or scheduled to be paid or accrued during such
period (excluding items eliminated in consolidation) of any series of
Disqualified Stock.
14
"Foreign Subsidiary" means any Subsidiary of VHS Holdco II that is
an entity which is a controlled foreign corporation under Section 957 of the
Internal Revenue Code.
"GAAP" means generally accepted accounting principles in the United
States in effect on the Issue Date. For purposes of this Senior Subordinated
Indenture, the term "consolidated" with respect to any Person means such Person
consolidated with its Restricted Subsidiaries and does not include any
Unrestricted Subsidiary.
"Government Securities" means securities that are:
(1) direct obligations of the United States of America for the
timely payment of which its full faith and credit is pledged or
(2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option of the
issuers thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such Government Securities or a specific payment of principal of or
interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Securities or the specific payment
of principal of or interest on the Government Securities evidenced by such
depository receipt.
"guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner, including, without limitation, through letters of
credit or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness or other obligations.
"Guarantee" means any guarantee of the obligations of the Issuers
under the Senior Subordinated Indenture and the Senior Subordinated Notes by a
Guarantor in accordance with the provisions of the Senior Subordinated
Indenture. When used as a verb, "Guarantee" shall have a corresponding meaning.
"Guarantor" means any Person, including VHS Holdco I, Vanguard (so
long as it guarantees the Senior Subordinated Notes) and the Subsidiary
Guarantors, that incurs a Guarantee of the Senior Subordinated Notes; provided
that upon the release and discharge of such Person from its Guarantee in
accordance with the Senior Subordinated Indenture, such Person shall cease to be
a Guarantor.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under:
15
(1) currency exchange, interest rate or commodity swap
agreements, currency exchange, interest rate or commodity cap agreements
and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange, interest rates or
commodity prices.
"Holder" means a Person in whose name a Senior Subordinated Note is
registered on the Registrar's books.
"Indebtedness" means, with respect to any Person:
(a) any indebtedness (including principal and premium) of such
Person, whether or not contingent,
(1) in respect of borrowed money,
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or, without double counting,
reimbursement agreements in respect thereof),
(3) representing the balance deferred and unpaid of the
purchase price of any property (including Capitalized Lease
Obligations), except (A) any such balance that constitutes a trade
payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) reimbursement
obligations in respect of trade letters of credit obtained in the
ordinary course of business with expiration dates not in excess of
365 days from the date of issuance (i) to the extent undrawn or (ii)
if drawn, to the extent repaid in full within 20 business days of
any such drawing, or
(4) representing any Hedging Obligations,
if and to the extent that any of the foregoing Indebtedness (other than letters
of credit and Hedging Obligations) would appear as a liability upon a balance
sheet (excluding the footnotes thereto) of such Person prepared in accordance
with GAAP;
(b) Disqualified Stock of such Person;
(c) to the extent not otherwise included, any obligation by
such Person to be liable for, or to pay, as obligor, guarantor or
otherwise, on the Indebtedness of another Person (other than by
endorsement of negotiable instruments for collection in the ordinary
course of business);
(d) to the extent not otherwise included, Indebtedness of
another Person secured by a Lien on any asset owned by such Person
(whether or not such Indebtedness is assumed by such Person); and
16
(e) to the extent not otherwise included, the amount then
outstanding (i.e., advanced, and received by, and available for use by,
VHS Holdco II or any of its Restricted Subsidiaries) under any
Securitization Financing (as set forth in the books and records of VHS
Holdco II or any Restricted Subsidiary and confirmed by the agent, trustee
or other representative of the institution or group providing such
Securitization Financing);
provided that Contingent Obligations incurred in the ordinary course of business
and not in respect of borrowed money shall be deemed not to constitute
Indebtedness.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm or consultant to Persons engaged in a Permitted Business
of nationally recognized standing that is, in the good faith judgment of VHS
Holdco II, qualified to perform the task for which it has been engaged.
"Indirect Participant" means a Person who holds a beneficial
interest in a Senior Subordinated Global Note through a Participant.
"Initial Purchasers" means Citigroup Global Markets Inc., Banc of
America Securities LLC, Bear, Xxxxxxx & Co. Inc., X.X. Xxxxxx Securities Inc.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, ABN AMRO Incorporated and
Wachovia Capital Markets, LLC.
"Initial Senior Subordinated Notes" has the meaning assigned to it
in the preamble to this Senior Subordinated Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investment Grade Securities" means:
(1) securities issued by the U.S. government or by any agency
or instrumentality thereof and directly and fully guaranteed or insured by
the U.S. government (other than Cash Equivalents) and in each case with
maturities not exceeding two years from the date of acquisition;
(2) investments in any fund that invests exclusively in
investments of the type described in clause (1) which fund may also hold
immaterial amounts of cash pending investment and/or distribution; and
(3) corresponding instruments in countries other than the
United States customarily utilized for high quality investments and in
each case with maturities not exceeding two years from the date of
acquisition.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including guarantees or other obligations), advances or
capital contributions (excluding accounts receivable, trade credit, advances to
customers or suppliers, commission, travel and
17
similar advances to officers and employees, and, to the extent recorded in
conformity with GAAP on the balance sheet of VHS Holdco II as accounts
receivable, prepaid expenses or deposits, endorsements for collections or
deposits, in each case to the extent arising in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities issued by any other Person and investments
that are required by GAAP to be classified on the balance sheet (excluding the
footnotes) of such Person in the same manner as the other investments included
in this definition to the extent such transactions involve the transfer of cash
or other property. If VHS Holdco II or any Subsidiary of VHS Holdco II sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of VHS Holdco II such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of VHS Holdco II, VHS Holdco II will be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Subsidiary not
sold or disposed of in an amount determined as provided in Section 4.07(c)
hereof.
For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.07 hereof, (a) "Investments" shall include the portion (proportionate
to VHS Holdco II's equity interest in such Subsidiary) of the fair market value
of the net assets of a Subsidiary of VHS Holdco II at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, VHS Holdco II shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (1) VHS Holdco II's "Investment"
in such Subsidiary at the time of such redesignation less (2) the portion
(proportionate to VHS Holdco II's equity interest in such Subsidiary) of the
fair market value of the net assets of such Subsidiary at the time of such
redesignation; (b) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by VHS Holdco II; and (c) any
transfer of Capital Stock that results in an entity which became a Restricted
Subsidiary after the Issue Date ceasing to be a Restricted Subsidiary shall be
deemed to be an Investment in an amount equal to the fair market value (as
determined by the Board of Directors of VHS Holdco II in good faith as of the
date of initial acquisition) of the Capital Stock of such entity owned by the
VHS Holdco II and the Restricted Subsidiaries immediately after such transfer.
"Issue Date" means September 23, 2004, the date on which the Senior
Subordinated Notes are originally issued.
"Issuers" means Vanguard Health Holding Company II, LLC, a Delaware
limited liability company, and Vanguard Holding Company II, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of Vanguard Health Holding Company II,
LLC, and any and all successors thereto.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Issuers and sent to all Holders of the Senior Subordinated Notes
for use by such Holders in connection with the Senior Subordinated Registered
Exchange Offer.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, hypothecation, pledge, encumbrance, charge or security interest in
or on such asset, (b) the
18
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset and (c)
in the case of securities (other than securities representing an interest in a
joint venture that is not a Subsidiary), any purchase option, call or similar
right of a third party with respect to such securities.
"LLC Agreement" means the LLC Agreement among certain of the
Sponsors and VHS Holdings LLC.
"Management Group" means the group consisting of the directors,
executive officers and other management personnel of Vanguard, VHS Holdco I and
the Issuers, as the case may be, on the Issue Date together with (a) any new
directors whose election by such boards of directors or whose nomination for
election by the shareholders of Vanguard, VHS Holdco I or the Issuers, as the
case may be, was approved by a vote of a majority of the directors of Vanguard,
VHS Holdco I or the Issuers, as the case may be, then still in office who were
either directors on the Issue Date or whose election or nomination was
previously so approved and (b) executive officers and other management personnel
of Vanguard, VHS Holdco I or the Issuers, as the case may be, hired at a time
when the directors on the Issue Date together with the directors so approved
constituted a majority of the directors of Vanguard, VHS Holdco I or the
Issuers, as the case may be.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends or accretion of any Preferred
Stock.
"Net Proceeds" means the aggregate cash proceeds received by VHS
Holdco II or any Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received in respect of or upon the sale
or other disposition of any Designated Non-cash Consideration received in any
Asset Sale and any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding the assumption by the acquiring Person of
Indebtedness relating to the disposed assets or other consideration received in
any other non-cash form), net of the direct costs relating to such Asset Sale
and the sale or disposition of such Designated Non-cash Consideration
(including, without limitation, legal, accounting and investment banking fees,
and brokerage and sales commissions), and any relocation expenses Incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing arrangements
related thereto), payments required to be made to holders of minority interests
in Restricted Subsidiaries as a result of such Asset Sale, amounts required to
be applied to the repayment of principal, premium (if any) and interest on
Indebtedness required (other than pursuant to Section 4.10(b) hereof) to be paid
as a result of such transaction, and any deduction of appropriate amounts to be
provided by VHS Holdco II as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and
retained by VHS Holdco II after such sale or other disposition thereof,
including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such
19
transaction; provided that any net proceeds of an Asset Sale by a non-guarantor
Subsidiary that are subject to restrictions on repatriation to VHS Holdco II
will not be considered Net Proceeds for so long as such proceeds are subject to
such restrictions.
"Obligations" means any principal, interest, penalties, fees,
expenses, indemnifications, reimbursements (including, without limitation,
reimbursement obligations with respect to letters of credit), damages and other
liabilities, and guarantees of payment of such principal, interest, penalties,
fees, expenses, indemnifications, reimbursements, damages and other liabilities,
payable under the documentation governing any Indebtedness.
"Offer" means the cash offer to purchase any and all of the Existing
Vanguard Senior Subordinated Notes and related solicitation of consents of the
holders of the Existing Vanguard Senior Subordinated Notes to eliminate
substantially all of the restrictive covenants contained in the indenture, on
the terms and conditions set forth in the Offer to Purchase and Consent
Solicitation Statement dated July 27, 2004.
"Offering Memorandum" means that certain offering memorandum, dated
September 17, 2004, relating to the initial offering of the Senior Subordinated
Notes.
"Officer" means the Chairman of the Board, the Vice Chairman (if
any), the Chief Executive Officer, the President, any Executive Vice President,
Senior Vice President or Vice President, the Treasurer or the Secretary of the
Issuers.
"Officers' Certificate" means a certificate signed on behalf of the
Issuers by two Officers of the Issuers, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Issuers, that meets the requirements of
Section 14.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel that meets
the requirements of Section 14.05 hereof. The counsel may be an employee of or
counsel to the Issuers or any Subsidiary of the Issuers.
"Participant" means, with respect to the Depositary, Euroclear, a
Person who has an account with the Depositary, Euroclear or Clearstream,
respectively (and, with respect to DTC, shall include Euroclear or Clearstream).
"Permitted Business" means any business in the healthcare industry,
including, without limitation, the business of owning and operating acute care
hospitals and other related health care services and any services, activities or
businesses incidental or directly related or reasonably similar thereto and any
line of business engaged in by the Issuers or any of their direct or indirect
Subsidiaries on the Issue Date or any business activity that is a reasonable
extension, development or expansion thereof or ancillary thereto.
"Permitted Debt" is defined in Section 4.09 hereof.
"Permitted Holders" means, at any time, each of (a) the Sponsors and
their Affiliates (not including, however, any portfolio companies of any of the
Sponsors), (b) one or more of the executive officers of Vanguard as of the Issue
Date as listed in the Offering
20
Memorandum under the caption "Management" (excluding any representatives of the
Sponsors and their Affiliates) and (c) the Management Group, excluding those
persons included in clause (b) hereof, with respect to not more than 5.0% of the
total voting power of the Equity Interests of Vanguard, VHS Holdco I, the
Issuers or any direct or indirect parent company of any of such Persons. Any
person or group whose acquisition of beneficial ownership constitutes a Change
of Control in respect of which a Change of Control Offer is made in accordance
with the requirements of the Senior Subordinated Indenture will thereafter,
together with its Affiliates, constitute an additional Permitted Holder.
"Permitted Investments" means:
(1) any Investment by VHS Holdco II in any Restricted
Subsidiary or by a Restricted Subsidiary in another Restricted Subsidiary;
(2) any Investment in cash and Cash Equivalents or Investment
Grade Securities;
(3) any Investment by VHS Holdco II or any Restricted
Subsidiary in a Person that is engaged in a Permitted Business if as a
result of such Investment (A) such Person becomes a Restricted Subsidiary
or (B) such Person, in one transaction or a series of related
transactions, is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, VHS Holdco II or a Restricted Subsidiary;
(4) any Investment in securities or other assets not
constituting cash or Cash Equivalents and received in connection with an
Asset Sale made pursuant to the provisions described in Section 4.10
hereof or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on the Issue Date or made pursuant
to binding commitments in effect on the Issue Date or an Investment
consisting of any extension, modification or renewal of any Investment
existing on the Issue Date (excluding any such extension, modification or
renewal involving additional advances, contributions or other investments
of cash or property or other increases thereof unless it is a result of
the accrual or accretion of interest or original issue discount or
payment-in-kind pursuant to the terms, as of the Issue Date, of the
original Investment so extended, modified or renewed);
(6) (A) loans and advances to officers, directors and
employees, not in excess of $10.0 million in the aggregate outstanding at
any one time and (B) loans and advances of payroll payments and expenses
to officers, directors and employees in each case incurred in the ordinary
course of business;
(7) any Investment acquired by VHS Holdco II or any Restricted
Subsidiary (A) in exchange for any other Investment or accounts receivable
held by VHS Holdco II 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) in satisfaction of a judgment or as a result of a
21
foreclosure by VHS Holdco II or any Restricted Subsidiary with respect to
any secured Investment or other transfer of title with respect to any
secured Investment in default;
(8) Hedging Obligations permitted under clause (10) of the
definition of "Permitted Debt";
(9) any Investment by VHS Holdco II or a Restricted Subsidiary
in a Permitted Business having an aggregate fair market value, taken
together with all other Investments made pursuant to this clause (9) that
are at that time outstanding (without giving effect to the sale of an
Unrestricted Subsidiary to the extent the proceeds of such sale do not
consist of cash and/or marketable securities), not to exceed 3.0% of Total
Assets (with the fair market value of each Investment being measured at
the time made and without giving effect to subsequent changes in value);
provided that if any Investment pursuant to this clause (9) is made in any
Person that is not a Restricted Subsidiary at the date of the making of
such Investment and such Person becomes a Restricted Subsidiary after such
date, such Investment shall thereafter be deemed to have been made
pursuant to clause (1) above and shall cease to have been made pursuant to
this clause (9) for so long as such Person continues to be a Restricted
Subsidiary;
(10) Investments resulting from the receipt of non-cash
consideration in an Asset Sale received in compliance with Section 4.10
hereof;
(11) Investments the payment for which consists of Equity
Interests of the Issuers or any direct or indirect parent companies of the
Issuers (exclusive of Disqualified Stock);
(12) guarantees (including Guarantees) of Indebtedness
permitted under Section 4.09 hereof and performance guarantees consistent
with past practice;
(13) any transaction to the extent it constitutes an
Investment that is permitted by and made in accordance with the provisions
of Section 4.11 (except transactions described in clauses (b)(2), (6), (7)
and (11) thereof;
(14) Investments of a Restricted Subsidiary acquired after the
Issue Date or of an entity merged into the Issuers or merged into or
consolidated with a Restricted Subsidiary in accordance with Section 5.01
hereof after the Issue Date to the extent that such Investments were not
made in contemplation of or in connection with such acquisition, merger or
consolidation and were in existence on the date of such acquisition,
merger or consolidation;
(15) guarantees by VHS Holdco II or any Restricted Subsidiary
of operating leases (other than Capitalized Lease Obligations) or of other
obligations that do not constitute Indebtedness, in each case entered into
by any Restricted Subsidiary in the ordinary course of business;
(16) Investments consisting of licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
22
(17) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment or purchases of contract
rights or licenses or leases of intellectual property, in each case in the
ordinary course of business;
(18) any Investment in a Securitization Subsidiary or any
Investment by a Securitization Subsidiary in any other Person in
connection with a Qualified Securitization Financing, including
Investments of funds held in accounts permitted or required by the
arrangements governing such Qualified Securitization Financing or any
related Indebtedness; provided that any Investment in a Securitization
Subsidiary is in the form of a Purchase Money Note, contribution of
additional Securitization Assets or an equity interest;
(19) additional Investments in joint ventures of VHS Holdco II
or any Restricted Subsidiaries existing on the Issue Date in an aggregate
amount not to exceed $25.0 million;
(20) Physician Support Obligations made by the Issuers or any
Restricted Subsidiary;
(21) Investments in a Captive Insurance Subsidiary in an
amount that does not exceed the minimum amount of capital required under
the laws of the jurisdiction in which such Captive Insurance Subsidiary is
formed plus the amount of any reasonable general corporate and overhead
expenses of such Captive Insurance Subsidiary, and any Investment by a
Captive Insurance Subsidiary that is a legal investment for an insurance
company under the laws of the jurisdiction in which such Captive Insurance
Subsidiary is formed and made in the ordinary course of its business and
rated in one of the four highest rating categories;
(22) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility and workers compensation,
performance and similar deposits entered into as a result of the
operations of the business in the ordinary course of business; and
(23) additional Investments by VHS Holdco II or any Restricted
Subsidiaries having an aggregate fair market value, taken together with
all other Investments made pursuant to this clause (23), not to exceed
3.0% of Total Assets at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without
giving effect to subsequent changes in value).
"Permitted Junior Securities" means unsecured debt of the Issuers or
any Guarantor or any successor corporation or equity securities of any direct or
indirect parent entity or any successor corporation, in each case issued
pursuant to a plan of reorganization or readjustment of the Issuers or any
Guarantor, as applicable, that are subordinated to the payment of all then
outstanding Senior Debt of the Issuers or any Guarantor, as applicable, at least
to the same extent that the Senior Subordinated Notes are subordinated to the
payment of all Senior Debt of the Issuers or any Guarantor, as applicable, on
the Issue Date; provided that if any Senior Debt of the Issuers or any
Guarantor, as applicable, outstanding on the date of consummation of
23
any such plan of reorganization or readjustment is not paid in full in cash on
such date, the holders of any such Senior Debt not so paid in full in cash have
consented to the terms of such plan of reorganization or readjustment.
"Permitted Liens" means the following types of Liens:
(1) deposits of cash or government bonds made in the ordinary
course of business to secure surety or appeal bonds to which such Person
is a party;
(2) Liens in favor of issuers of performance, surety bid,
indemnity, warranty, release, appeal or similar bonds or with respect to
other regulatory requirements or letters of credit or bankers' acceptances
issued, and completion guarantees provided for, in each case pursuant to
the request of and for the account of such Person in the ordinary course
of its business or consistent with past practice;
(3) Liens on property or shares of stock of a Person at the
time such Person becomes a Subsidiary of VHS Holdco II; provided that such
Liens are not created or incurred in connection with, or in contemplation
of, such other Person becoming such a Subsidiary; provided, further, that
such Liens may not extend to any other property owned by VHS Holdco II or
any Restricted Subsidiary;
(4) Liens on property at the time VHS Holdco II or a
Restricted Subsidiary acquired the property, including any acquisition by
means of a merger or consolidation with or into VHS Holdco II or any
Restricted Subsidiary; provided that such Liens are not created or
incurred in connection with, or in contemplation of, such acquisition;
provided, further, that such Liens may not extend to any other property
owned by VHS Holdco II or any Restricted Subsidiary;
(5) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to VHS Holdco II or another Restricted
Subsidiary permitted to be incurred in accordance with Section 4.09
hereof;
(6) Liens securing Hedging Obligations so long as the related
Indebtedness is permitted to be incurred under the Senior Subordinated
Indenture and is secured by a Lien on the same property securing such
Hedging Obligation;
(7) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(8) Liens in favor of VHS Holdco II or any Restricted
Subsidiary;
(9) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Liens referred to in clauses (3), (4), (25)
and (26) of this definition; provided that (A) such new Lien shall be
limited to all or part of the same property that secured the original
Liens (plus
24
improvements on such property), and (B) the Indebtedness secured by such
Lien at such time is not increased to any amount greater than the sum of
(x) the outstanding principal amount or, if greater, committed amount of
the Indebtedness described under clauses (3), (4), (25) and (26) at the
time the original Lien became a Permitted Lien under the Senior
Subordinated Indenture and (y) an amount necessary to pay any fees and
expenses, including premiums, related to such refinancing, refunding,
extension, renewal or replacement;
(10) Liens on Securitization Assets and related assets of the
type specified in the definition of "Securitization Financing" incurred in
connection with any Qualified Securitization Financing;
(11) Liens for taxes, assessments or other governmental
charges or levies of or against VHS Holdco II or one of its Subsidiaries
not yet delinquent, or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted or
pursuant to a closing agreement to be entered into under Section 7121 of
the Code between Vanguard Health Financial Company, Inc. and the
Commissioner of Internal Revenue with respect to the election under
Section 953(d) made (or to be made) by Volunteer Insurance, Ltd. or for
property taxes on property that VHS Holdco II or one of its Subsidiaries
has determined to abandon if the sole recourse for such tax, assessment,
charge, levy or claim is to such property;
(12) judgment Liens not giving rise to an Event of Default so
long as any appropriate legal proceedings that may have been duly
initiated for the review of such judgment shall not have been finally
terminated or the period within which such legal proceedings may be
initiated shall not have expired;
(13) (A) pledges and deposits made in the ordinary course of
business in compliance with the Federal Employers Liability Act or any
other workers' compensation, unemployment insurance and other social
security laws or regulations and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements in respect of such
obligations and (B) pledges and deposits securing liability for
reimbursement or indemnification obligations of (including obligations in
respect of letters of credit or bank guarantees for the benefit of)
insurance carriers providing property, casualty or liability insurance to
Vanguard, VHS Holdco I, VHS Holdco II or any Restricted Subsidiary;
(14) landlord's, carriers', warehousemen's, mechanics',
materialmen's, repairmen's, construction or other like Liens arising in
the ordinary course of business and securing obligations that are not
overdue by more than 30 days or that are being contested in good faith by
appropriate proceedings and in respect of which, if applicable, VHS Holdco
II or any Restricted Subsidiary shall have set aside on its books reserves
in accordance with GAAP;
(15) zoning restrictions, easements, trackage rights, leases
(other than Capitalized Lease Obligations), licenses, special assessments,
rights-of-way, restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of
25
business that, in the aggregate, do not interfere in any material respect
with the ordinary conduct of the business of VHS Holdco II or any
Restricted Subsidiary;
(16) Liens that are contractual rights of set-off (A) relating
to the establishment of depository relations with banks not given in
connection with the issuance of Indebtedness, (B) relating to pooled
deposit or sweep accounts of VHS Holdco II or any Restricted Subsidiary to
permit satisfaction of overdraft or similar obligations incurred in the
ordinary course of business of VHS Holdco II and the Restricted
Subsidiaries or (C) relating to purchase orders and other agreements
entered into with customers of VHS Holdco II or any Restricted Subsidiary
in the ordinary course of business;
(17) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar
rights;
(18) Liens securing obligations in respect of trade-related
letters of credit permitted under Section 4.09 hereof and covering the
goods (or the documents of title in respect of such goods) financed by
such letters of credit and the proceeds and products thereof;
(19) any interest or title of a lessor under any lease or
sublease entered into by VHS Holdco II or any Restricted Subsidiary in the
ordinary course of business;
(20) licenses of intellectual property granted in a manner
consistent with past practice;
(21) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with
the importation of goods;
(22) Liens solely on any xxxx xxxxxxx money deposits made by
VHS Holdco II or any Restricted Subsidiary in connection with any letter
of intent or purchase agreement permitted hereunder;
(23) Liens with respect to obligations of VHS Holdco II or a
Restricted Subsidiary with an aggregate fair market value (valued at the
time of creation thereof) of not more than $25.0 million at any time;
(24) deposits or pledges in connection with bids, tenders,
leases and contracts (other than contracts for the payment of money)
entered into in the ordinary course of business;
(25) Liens securing Capitalized Lease Obligations permitted to
be incurred pursuant to Section 4.09 hereof and Indebtedness permitted to
be incurred under Section 4.09(b)(5); provided, however, that such Liens
securing Capitalized Lease Obligations or Indebtedness incurred Section
4.09(b)(5) hereof may not extend to property owned by VHS Holdco II or any
Restricted Subsidiary other than the property being leased or acquired
pursuant to such Section 4.09(b)(5); and
26
(26) Liens existing on the Issue Date after giving effect to
the consummation of the Transactions.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Physician Support Obligation" means a loan to or on behalf of, or a
guarantee of indebtedness of, (a) a physician or healthcare professional
providing service to patients in the service area of a hospital or other health
care facility operated by VHS Holdco II or any of its Subsidiaries or (b) any
independent practice association or other entity majority-owned by any Person
described in clause (a) made or given by VHS Holdco II or any Subsidiary of VHS
Holdco II, in each case:
(1) in the ordinary course of its business; and
(2) pursuant to a written agreement having a period not to
exceed five years.
"Preferred Stock" means any Equity Interest with preferential rights
of payment of dividends upon liquidation, dissolution or winding up.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) hereof to be placed on all Senior Subordinated Notes issued under
this Senior Subordinated Indenture except where otherwise permitted by the
provisions of this Senior Subordinated Indenture.
"Purchase Money Note" means a promissory note of a Securitization
Subsidiary evidencing a line of credit, which may be irrevocable, from Vanguard
or any Subsidiary of Vanguard to a Securitization Subsidiary in connection with
a Qualified Securitization Financing, which note is intended to finance that
portion of the purchase price that is not paid in cash or a contribution of
equity and which (a) shall be repaid from cash available to the Securitization
Subsidiary, other than (1) amounts required to be established as reserves, (2)
amounts paid to investors in respect of interest, (3) principal and other
amounts owing to such investors and (4) amounts paid in connection with the
purchase of newly generated receivables and (b) may be subordinated to the
payments described in clause (a) of this definition.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Qualified Proceeds" means assets that are used or useful in, or
Capital Stock of any Person engaged in, a Permitted Business; provided that the
fair market value of any such assets or Capital Stock shall be determined by the
Board of Directors of VHS Holdco II in good faith, except that in the event the
value of any such assets or Capital Stock exceeds $25.0 million or more, the
fair market value shall be determined by an Independent Financial Advisor.
"Qualified Securitization Financing" means any Securitization
Financing of a Securitization Subsidiary that meets the following conditions:
(a) the Board of Directors of VHS Holdco II shall have determined in good faith
that such Qualified Securitization Financing
27
(including financing terms, covenants, termination events and other provisions)
is in the aggregate economically fair and reasonable to the Issuers and the
Securitization Subsidiary, (b) all sales of Securitization Assets and related
assets to the Securitization Subsidiary are made at fair market value (as
determined in good faith by VHS Holdco II) and (c) the financing terms,
covenants, termination events and other provisions thereof shall be market terms
(as determined in good faith by VHS Holdco II) and may include Standard
Securitization Undertakings. The grant of a security interest in any
Securitization Assets of VHS Holdco II or any Restricted Subsidiaries (other
than a Securitization Subsidiary) to secure Indebtedness under the Credit
Agreement and any Refinancing Indebtedness with respect thereto shall not be
deemed a Qualified Securitization Financing.
"Rating Agency" means each of S&P and Xxxxx'x, or if S&P or Xxxxx'x
or both shall not make a rating on the Senior Subordinated Notes publicly
available, a nationally recognized statistical rating organization or
organizations, within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange
Act, selected by VHS Holdco II as a replacement agency or agencies for S&P or
Xxxxx'x, or both, as the case may be.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Permanent Senior Subordinated Global Note" means a
permanent Senior Subordinated Global Note in the form of Exhibit A1 hereto
bearing the Senior Subordinated Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Regulation S Temporary Senior Subordinated Global Note
upon expiration of the Restricted Period.
"Regulation S Temporary Senior Subordinated Global Note" means a
temporary Senior Subordinated Global Note in the form of Exhibit A2 hereto
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Senior Subordinated Notes initially sold in reliance on Rule 903 of
Regulation S.
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Debt of the Issuers.
"Responsible Officer" of any Person means any executive officer or
financial officer of such Person and any other officer or similar official
thereof responsible for the administration of the obligations of such Person in
respect of the Senior Subordinated Indenture.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period
as defined in Regulation S.
28
"Restricted Senior Subordinated Global Note" means a Senior
Subordinated Global Note bearing the Private Placement Legend.
"Restricted Subsidiary" means, at any time, any direct or indirect
Subsidiary of VHS Holdco II that is not then an Unrestricted Subsidiary;
provided that upon the occurrence of an Unrestricted Subsidiary ceasing to be an
Unrestricted Subsidiary, such Subsidiary shall be included in the definition of
Restricted Subsidiary. Unless otherwise indicated, all references to Restricted
Subsidiaries shall mean Restricted Subsidiaries of VHS Holdco II, including the
Subordinated Notes Co-Issuer.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Securitization Assets" means any accounts receivable, inventory,
royalty or revenue streams from sales of inventory subject to a Qualified
Securitization Financing.
"Securitization Fees" means reasonable distributions or payments
made directly or by means of discounts with respect to any participation
interest issued or sold in connection with, and other fees paid to a Person that
is not a Securitization Subsidiary in connection with any Qualified
Securitization Financing.
"Securitization Financing" means any transaction or series of
transactions that may be entered into by Vanguard or any of its Subsidiaries
pursuant to which Vanguard or any of its Subsidiaries may sell, convey or
otherwise transfer to (a) a Securitization Subsidiary (in the case of a transfer
by Vanguard or any of its Subsidiaries) and (b) any other Person (in the case of
a transfer by a Securitization Subsidiary), or may grant a security interest in,
any Securitization Assets (whether now existing or arising in the future) of
Vanguard or any of its Subsidiaries, and any assets related thereto, including,
without limitation, all collateral securing such Securitization Assets, all
contracts and all guarantees or other obligations in respect of such
Securitization Assets, proceeds of such Securitization Assets and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving Securitization Assets and any Hedging Obligations entered into by
Vanguard or any of its Subsidiaries in connection with such Securitization
Assets.
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"Securitization Repurchase Obligation" means any obligation of a
seller of Securitization Assets in a Qualified Securitization Financing to
repurchase Securitization Assets arising as a result of a breach of a
representation, warranty or covenant or otherwise, including as a result of a
receivable or portion thereof becoming subject to any asserted defense, dispute,
off-set or counterclaim of any kind as a result of any action taken by, any
failure to take action by or any other event relating to the seller.
"Securitization Subsidiary" means a Wholly-Owned Subsidiary of
Vanguard (or another Person formed for the purposes of engaging in a Qualified
Securitization Financing in which Vanguard or any of its Subsidiaries makes an
Investment and to which Vanguard or any of its Subsidiaries transfers
Securitization Assets and related assets) which engages in no activities other
than in connection with the financing of Securitization Assets of Vanguard or
its Subsidiaries, all proceeds thereof and all rights (contractual and other),
collateral and other assets relating thereto, and any business or activities
incidental or related to such business, and which is designated by the Board of
Directors of Vanguard or such other Person (as provided below) as a
Securitization Subsidiary and (a) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (1) is guaranteed by Vanguard or
any of its Subsidiaries (excluding guarantees of obligations (other than the
principal of, and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (2) is recourse to or obligates Vanguard or any of its
Subsidiaries in any way other than pursuant to Standard Securitization
Undertakings or (3) subjects any property or asset of Vanguard or any of its
Subsidiaries, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (b) with which neither Vanguard or any of its Subsidiaries has any
material contract, agreement, arrangement or understanding other than on terms
which Vanguard reasonably believes to be no less favorable to Vanguard or any of
its Subsidiaries than those that might be obtained at the time from Persons that
are not Affiliates of Vanguard and (c) to which neither Vanguard nor any of its
Subsidiaries has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of Vanguard or such other Person
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the resolution of the Board of Directors of Vanguard or such other Person giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
"Senior Debt" (a) means the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on any Indebtedness and any Securitization Repurchase Obligation of Vanguard,
VHS Holdco I or the Issuers (or, if specified, of any Guarantor), whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular obligation, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such obligation shall not be senior in right of payment to the
Senior Subordinated Notes. Without limiting the generality of the foregoing,
"Senior Debt" shall also include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other amounts owing in respect of (including guarantees of the foregoing
obligations):
30
(1) all monetary obligations (and guarantees thereof) of every
nature of Vanguard, VHS Holdco I or the Issuers under, or with respect to,
the Credit Agreement, including, without limitation, obligations
(including guarantees) to pay principal, premium and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities (and guarantees thereof); and
(2) all Hedging Obligations (and guarantees thereof), in each
case whether outstanding on the Issue Date or thereafter incurred.
(b) Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of either of the Issuers to Vanguard, VHS
Holdco I or a Subsidiary of Vanguard or VHS Holdco I (other than any
Securitization Repurchase Obligation);
(2) Indebtedness to, or guaranteed on behalf of, any
shareholder, director, officer or employee of Vanguard, VHS Holdco I or
any Subsidiary of Vanguard or VHS Holdco I (including, without limitation,
amounts owed for compensation) other than the guarantees of Vanguard
and/or VHS Holdco I or any Subsidiary of Vanguard or VHS Holdco I of
Indebtedness under the Credit Agreement;
(3) Indebtedness to trade creditors and other amounts (but not
under the Credit Agreement) incurred in connection with obtaining goods,
materials or services (including guarantees thereof or instruments
evidencing such liabilities);
(4) Indebtedness represented by Capital Stock;
(5) any liability for federal, state, local or other taxes
owed or owing by the Issuers;
(6) that portion of any Indebtedness incurred in violation of
Section 4.18; provided that as to any such Indebtedness no such violation
shall be deemed to exist for purposes of this clause (6) if the holder(s)
of such Indebtedness or their representative and the Trustee shall have
received an Officers' Certificate of VHS Holdco II to the effect that the
incurrence of such Indebtedness does not (or, in the case of revolving
credit indebtedness, that the incurrence of the entire committed amount
thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of the Senior Subordinated Indenture;
(7) Indebtedness which, when incurred and without respect to
any election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is
without recourse to VHS Holdco I or the Issuers; and
(8) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Issuers.
"Senior Discount Indenture" means the indenture, dated September 23,
2004 by and among Vanguard, VHS Holdco I and U.S. Bank National Association as
trustee.
31
"Senior Discount Notes" means the $216 million aggregate principal
amount at maturity of the 11-1/4% Senior Discount Notes due 2015 of VHS Holdco I
issued under the Senior Discount Indenture.
"Senior Subordinated 144A Global Note" means a Senior Subordinated
Global Note substantially in the form of Exhibit A1 hereto bearing the Senior
Subordinated Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding principal
amount of the Senior Subordinated Notes sold in reliance on Rule 144A.
"Senior Subordinated Exchange Notes" means the Senior Subordinated
Notes issued in the Senior Subordinated Registered Exchange Offer pursuant to
Section 2.06(f) hereof.
"Senior Subordinated Exchange Offer Registration Statement" has the
meaning set forth in the Senior Subordinated Registration Rights Agreement.
"Senior Subordinated IAI Global Note" means a Senior Subordinated
Global Note substantially in the form of Exhibit A1 hereto bearing the Senior
Subordinated Global Note Legend and the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Senior Subordinated Notes sold to Institutional Accredited Investors.
"Senior Subordinated Global Note Legend" means the legend set forth
in Section 2.06(g)(2) hereof, which is required to be placed on all Senior
Subordinated Global Notes issued under this Senior Subordinated Indenture.
"Senior Subordinated Global Notes" means, individually and
collectively, each of the Restricted Senior Subordinated Global Notes and the
Unrestricted Senior Subordinated Global Notes deposited with or on behalf of and
registered in the name of the Depository or its nominee, substantially in the
form of Exhibit A1 hereto and that bears the Senior Subordinated Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Senior
Subordinated Global Note" attached thereto, issued in accordance with Section
2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(1), 2.06(d)(2) or 2.06(f) hereof.
"Senior Subordinated Indenture" means this Senior Subordinated
Indenture, as amended or supplemented from time to time.
"Senior Subordinated Note Guarantee" means the Guarantee by each
Guarantor of the Issuers' obligations under this Senior Subordinated Indenture
and the Senior Subordinated Notes, executed pursuant to the provisions of this
Senior Subordinated Indenture.
"Senior Subordinated Notes" has the meaning assigned to it in the
preamble to this Senior Subordinated Indenture. The Initial Senior Subordinated
Notes, any Additional Senior Subordinated Notes and any Senior Subordinated
Exchange Notes shall be treated as a single class for all purposes under this
Senior Subordinated Indenture, and unless the context otherwise requires, all
references to the Senior Subordinated Notes shall include the Initial
32
Senior Subordinated Notes, any Additional Senior Subordinated Notes and any
Senior Subordinated Exchange Notes.
"Senior Subordinated Registered Exchange Offer" has the meaning set
forth in the Senior Subordinated Registration Rights Agreement.
"Senior Subordinated Registration Rights Agreement" means the Senior
Subordinated Registration Rights Agreement, dated as of September 23, 2004,
among the Issuers, the Guarantors and the Initial Purchasers named therein, as
such agreement may be amended, modified or supplemented from time to time and,
with respect to any Additional Senior Subordinated Notes, one or more
registration rights agreements among the Issuers, the Guarantors and the other
parties thereto, as such agreement(s) may be amended, modified or supplemented
from time to time, relating to rights given by the Issuers to the purchasers of
Additional Senior Subordinated Notes to register such Additional Senior
Subordinated Notes under the Securities Act.
"Senior Subordinated Regulation S Global Note" means a Regulation S
Temporary Senior Subordinated Global Note or Regulation S Permanent Senior
Subordinated Global Note, as appropriate.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Senior Subordinated Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "significant subsidiary" of VHS Holdco II as defined in Article 1, Rule
1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such
Regulation is in effect on the Issue Date.
"Sponsors" means one or more investment funds controlled by The
Blackstone Group and its Affiliates and one or more investment funds controlled
by Xxxxxx Xxxxxxx Capital Partners and its Affiliates.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Vanguard or any of its
Subsidiaries which Vanguard has determined in good faith to be customary in a
Securitization Financing, including, without limitation, those relating to the
servicing of the assets of a Securitization Subsidiary, it being understood that
any Securitization Repurchase Obligation shall be deemed to be a Standard
Securitization Undertaking.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the day on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Indebtedness" means (a) with respect to the Issuers,
any Indebtedness of either of the Issuers that is by its terms subordinated in
right of payment to the Senior Subordinated Notes and (b) with respect to any
Guarantor of the Senior Subordinated
33
Notes, any Indebtedness of such Guarantor that is by its terms subordinated in
right of payment to its Guarantee of the Senior Subordinated Notes.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity, of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and
(2) any partnership, joint venture, limited liability company or
similar entity of which (A) more than 50% of the capital accounts, distribution
rights, total equity and voting interests or general or limited partnership
interests, as applicable, are owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof whether in the form of membership, general, special or
limited partnership or otherwise and (B) such Person or any Restricted
Subsidiary of such Person is a controlling general partner or otherwise controls
such entity.
"Subsidiary Guarantor" means each Subsidiary of VHS Holdco II that
incurs a Guarantee of the Senior Subordinated Notes.
"Tax Distribution" means any distribution pursuant to Section
4.07(b)(9) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb).
"Total Assets" means the total consolidated assets of VHS Holdco II
and its Restricted Subsidiaries, as shown on the most recent balance sheet of
VHS Holdco II.
"Transactions" means the transactions contemplated by the Agreement
and Plan of Merger by and among VHS Holdings LLC, a Delaware limited liability
company, Health Systems Acquisition Corp., a Delaware corporation and
Wholly-Owned Subsidiary of VHS Holdings LLC, and Vanguard, including the related
equity contributions, borrowings under the Credit Agreement, the offering of the
Senior Subordinated Notes and the Offer and the repayment of other indebtedness
of Vanguard and its Subsidiaries, in each case as described in the Offering
Memorandum under the caption "The Transactions."
"Treasury Rate" means, as of the applicable redemption date, the
yield to maturity as of such redemption date of United States Treasury
securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15 (519) that has become publicly
available at least two Business Days prior to such redemption date (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the period from such redemption date
to October 1, 2009; provided, that if the period from such redemption date to
October 1, 2009, is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year will be used.
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"Trustee" means U.S. Bank National Association until a successor
replaces it in accordance with the applicable provisions of this Senior
Subordinated Indenture and thereafter means the successor serving hereunder.
"Unrestricted Definitive Note" means a Definitive Note that does not
bear and is not required to bear the Private Placement Legend.
"Unrestricted Senior Subordinated Global Note" means a Senior
Subordinated Global Note that does not bear and is not required to bear the
Private Placement Legend.
"Unrestricted Subsidiary" means (a) any Subsidiary of VHS Holdco II
that at the time of determination is an Unrestricted Subsidiary (as designated
by the Board of Directors of VHS Holdco II, as provided below) and (b) any
Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of VHS Holdco II may designate any Subsidiary
of VHS Holdco II (including any existing Subsidiary and any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
or any of its Subsidiaries owns any Equity Interests or Indebtedness (other than
Indebtedness represented by short-term, open account working capital rates
entered into in the ordinary course of business for cash management purposes and
consistent with past practice) of, or owns or holds any Lien on, any property
of, VHS Holdco II or any Subsidiary of VHS Holdco II (other than any Subsidiary
of the Subsidiary to be so designated); provided that:
(1) any Unrestricted Subsidiary must be an entity of which
shares of the Capital Stock or other equity interests (including
partnership interests) entitled to cast at least a majority of the votes
that may be cast by all shares or equity interests having ordinary voting
power for the election of directors or other governing body are owned,
directly or indirectly, by VHS Holdco II;
(2) such designation complies with Section 4.07 hereof; and
(3) each of (A) the Subsidiary to be so designated and (B) its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the
lender has recourse to any of the assets of VHS Holdco II or any
Restricted Subsidiary.
The Board of Directors of VHS Holdco II may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that, immediately after
giving effect to such designation:
(i) no Default or Event of Default shall have occurred
and be continuing, and
(ii) either (x) the Fixed Charge Coverage Ratio would be
at least 2.00 to 1.00 or (y) the Fixed Charge Coverage Ratio
would be greater than such ratio immediately prior to such
designation, in each case on a pro forma basis taking into
account such designation.
35
Any such designation by the Board of Directors of VHS Holdco II shall be
notified by the Issuers to the Trustee by promptly filing with the Trustee a
copy of the board resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Person" means a U.S. Person as defined in Rule 902(k)
promulgated under the Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (A) the
amount of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final
maturity, in respect of the Indebtedness, by (B) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
Person, 100% of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares or nominee or other similar
shares required pursuant to applicable law) shall at the time be owned by such
Person or by one or more Wholly-Owned Subsidiaries of such Person or by such
Person and one or more Wholly-Owned Subsidiaries of such Person.
Section 1.02 Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction"............................................................... 4.11
"Asset Sale Offer".................................................................... 3.09
"Authentication Order"................................................................ 2.02
"Change of Control Offer"............................................................. 4.14
"Change of Control Payment"........................................................... 4.14
"Change of Control Payment Date"...................................................... 4.14
"Covenant Defeasance"................................................................. 8.03
"DTC"................................................................................. 2.03
"Event of Default".................................................................... 6.01
"Excess Proceeds"..................................................................... 4.10
"incur"............................................................................... 4.09
"Legal Defeasance".................................................................... 8.02
"Offer Period"........................................................................ 3.09
"Paying Agent"........................................................................ 2.03
"Payment Blockage Notice" ............................................................ 10.03
"Permitted Debt"...................................................................... 4.09
"Registrar"........................................................................... 2.03
36
"Restricted Payments"................................................................. 4.07
"Subordinated Note Payments" ......................................................... 10.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Senior Subordinated Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this Senior
Subordinated Indenture.
The following TIA terms used in this Senior Subordinated Indenture
have the following meanings:
"indenture securities" means the Senior Subordinated Notes;
"indenture security Holder" means a Holder of a Senior Subordinated
Note;
"indenture to be qualified" means this Senior Subordinated
Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and "obligor" on the Senior Subordinated Notes and the Senior Subordinated Note
Guarantees means the Issuers and the Guarantors, respectively, and any successor
obligor upon the Senior Subordinated Notes and the Senior Subordinated Note
Guarantees, respectively.
All other terms used in this Senior Subordinated Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
and
(7) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
37
ARTICLE II
THE NOTES
Section 2.01 Form and Dating. (a) General. The Senior Subordinated
Notes and the Trustee's certificate of authentication will be substantially in
the form of Exhibits A1 and A2 hereto. The Senior Subordinated Notes may have
notations, legends or endorsements required by law, stock exchange rule or usage
(provided that any such notation, legend or endorsement required by usage is in
a form reasonably acceptable to the Issuers). Each Senior Subordinated Note will
be dated the date of its authentication. The Senior Subordinated Notes shall be
in denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The terms and provisions contained in the Senior Subordinated Notes
will constitute, and are hereby expressly made, a part of this Senior
Subordinated Indenture and the Issuers, the Guarantors and the Trustee, by their
execution and delivery of this Senior Subordinated Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Senior Subordinated Note conflicts with the express provisions
of this Senior Subordinated Indenture, the provisions of this Senior
Subordinated Indenture shall govern and be controlling.
(b) Senior Subordinated Global Notes. Senior Subordinated Notes
issued in global form will be substantially in the form of Exhibits A1 or A2
hereto (including the Senior Subordinated Global Note Legend thereon and the
"Schedule of Exchanges of Interests in the Senior Subordinated Global Note"
attached thereto). Senior Subordinated Notes issued in definitive form will be
substantially in the form of Exhibit A1 hereto (but without the Senior
Subordinated Global Note Legend thereon and without the "Schedule of Exchanges
of Interests in the Senior Subordinated Global Note" attached thereto). Each
Senior Subordinated Global Note will represent such of the outstanding Senior
Subordinated Notes as will be specified therein and each shall provide that it
represents the aggregate principal amount of outstanding Senior Subordinated
Notes from time to time endorsed thereon and that the aggregate principal amount
of outstanding Senior Subordinated Notes represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Senior Subordinated Global Note to reflect the
amount of any increase or decrease in the aggregate principal amount of
outstanding Senior Subordinated Notes represented thereby will be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof and
shall be made on the records of the Trustee and the Depositary.
(c) Temporary Senior Subordinated Global Notes. Senior Subordinated
Notes offered and sold in reliance on Regulation S will be issued initially in
the form of the Regulation S Temporary Senior Subordinated Global Note, which
will be deposited on behalf of the purchasers of the Senior Subordinated Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Issuers and authenticated by the
Trustee as hereinafter provided. The Restricted Period will be terminated upon
the receipt by the Trustee of:
38
(1) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream certifying that they
have received certification of non-United States beneficial ownership of
100% of the aggregate principal amount of the Regulation S Temporary
Senior Subordinated Global Note (except to the extent of any Beneficial
Owners thereof who acquired an interest therein during the Restricted
Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership
interest in a Senior Subordinated 144A Global Note or an IAI Senior
Subordinated Global Note bearing a Private Placement Legend, all as
contemplated by Section 2.06(b) hereof); and
(2) an Officers' Certificate from the Issuers.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Senior Subordinated Global Note will be
exchanged for beneficial interests in the Regulation S Permanent Senior
Subordinated Global Note pursuant to the Applicable Procedures. Simultaneously
with the authentication of the Regulation S Permanent Senior Subordinated Global
Note, the Trustee will cancel the Regulation S Temporary Senior Subordinated
Global Note. The aggregate principal amount of the Regulation S Temporary Senior
Subordinated Global Note and the Regulation S Permanent Senior Subordinated
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
(d) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Temporary Senior Subordinated Global
Note and the Regulation S Permanent Senior Subordinated Global Note that are
held by Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication. At least one Officer must
sign the Senior Subordinated Notes for the Issuers by manual or facsimile
signature.
If an Officer whose signature is on a Senior Subordinated Note no
longer holds that office at the time a Senior Subordinated Note is
authenticated, the Senior Subordinated Note will nevertheless be valid.
A Senior Subordinated Note will not be valid until authenticated by
the manual signature of the Trustee. The signature will be conclusive evidence
that the Senior Subordinated Note has been authenticated under this Senior
Subordinated Indenture.
The Trustee will, upon receipt of a written order of the Issuers
signed by two Officers of the Issuers (an "Authentication Order"), authenticate
Senior Subordinated Notes for original issue that may be validly issued under
this Senior Subordinated Indenture, including any Additional Senior Subordinated
Notes and any Senior Subordinated Exchange Notes. The aggregate principal amount
of Senior Subordinated Notes outstanding at any time may not exceed the
aggregate principal amount of Senior Subordinated Notes authorized for issuance
by
39
the Issuers pursuant to one or more Authentication Orders, except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Senior Subordinated Notes. An authenticating agent may
authenticate Senior Subordinated Notes whenever the Trustee may do so. Each
reference in this Senior Subordinated Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with Holders or an Affiliate of the Issuers.
Section 2.03 Registrar and Paying Agent. The Issuers will maintain
an office or agency where Senior Subordinated Notes may be presented for
registration of transfer or for exchange ("Registrar") and an office or agency
where Senior Subordinated Notes may be presented for payment ("Paying Agent").
The Registrar will keep a register of the Senior Subordinated Notes and of their
transfer and exchange. The Issuers may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Issuers
may change any Paying Agent or Registrar without notice to any Holder. The
Issuers will notify the Trustee in writing of the name and address of any Agent
not a party to this Senior Subordinated Indenture. If the Issuers fail to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Issuers or any of their Subsidiaries may act as Paying
Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC")
to act as Depositary with respect to the Senior Subordinated Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Senior Subordinated
Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust. The Issuers will
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium or
Additional Interest, if any, or interest on the Senior Subordinated Notes, and
will notify the Trustee of any default by the Issuers in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Issuers at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Issuers or a
Subsidiary) will have no further liability for the money. If the Issuers or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Issuers, the
Trustee will serve as Paying Agent for the Senior Subordinated Notes.
Section 2.05 Holder Lists. The Trustee will preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar, the Issuers will furnish to the
Trustee at least seven Business Days before each interest payment
40
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Senior Subordinated Notes and the Issuers shall
otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange. (a) Transfer and Exchange of
Senior Subordinated Global Notes. A Senior Subordinated Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Senior Subordinated Global Notes
will be exchanged by the Issuers for Certificated Notes if:
(1) the Issuers deliver in writing to the Trustee notice that
the Depositary is unwilling or unable to continue to act as Depositary or
that it is no longer a clearing agency registered under the Exchange Act
and, in either case, a successor Depositary is not appointed by the
Issuers within 90 days after the date of such notice or cessation;
(2) the Issuers in their sole discretion determine that the
Senior Subordinated Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and deliver a written notice to such effect
to the Trustee; provided that in no event shall the Regulation S Temporary
Senior Subordinated Global Note be exchanged by the Issuers for Definitive
Notes prior to (A) the expiration of the Restricted Period and (B) the
receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act; or
(3) there has occurred and is continuing an Event of Default
and the registry has received a request from the Depositary to issue the
Certificated Notes.
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Senior Subordinated Global Notes also may be exchanged or replaced,
in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Senior
Subordinated Note authenticated and delivered in exchange for, or in lieu of, a
Senior Subordinated Global Note or any portion thereof, pursuant to this Section
2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the
form of, and shall be, a Senior Subordinated Global Note. A Senior Subordinated
Global Note may not be exchanged for another Senior Subordinated Note other than
as provided in this Section 2.06(a), however, beneficial interests in a Senior
Subordinated Global Note may be transferred and exchanged as provided in Section
2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Senior
Subordinated Global Notes. The transfer and exchange of beneficial interests in
the Senior Subordinated Global Notes will be effected through the Depositary, in
accordance with the provisions of this Senior Subordinated Indenture and the
Applicable Procedures. Beneficial interests in the Restricted Senior
Subordinated Global Notes will be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Senior Subordinated Global Notes also
will require compliance with
41
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Senior
Subordinated Global Note. Beneficial interests in any Restricted Senior
Subordinated Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Restricted Senior
Subordinated Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that prior to
the expiration of the Restricted Period, transfers of beneficial interests
in the Regulation S Temporary Senior Subordinated Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Beneficial interests in any
Unrestricted Senior Subordinated Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Senior Subordinated Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Senior Subordinated Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(1) above, the transferor of such beneficial interest must deliver
to the Registrar either:
(A) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in
another Senior Subordinated Global Note in an amount equal to
the beneficial interest to be transferred or exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above; provided, that
in no event shall Definitive Notes be issued upon the transfer
or exchange of beneficial interests in the Regulation S
Temporary Senior Subordinated Global Note prior to (A) the
42
expiration of the Restricted Period and (B) the receipt by the
Registrar of any certificates required pursuant to Rule 903
under the Securities Act.
Upon consummation of a Senior Subordinated Registered Exchange Offer by the
Issuers in accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(2) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal delivered
by the Holder of such beneficial interests in the Restricted Senior Subordinated
Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Senior Subordinated Global Notes contained
in this Senior Subordinated Indenture and the Senior Subordinated Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Senior Subordinated Global Note(s) pursuant to
Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted
Senior Subordinated Global Note. A beneficial interest in any Restricted
Senior Subordinated Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another
Restricted Senior Subordinated Global Note if the transfer complies with
the requirements of Section 2.06(b)(2) above and the Registrar receives
the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the Senior Subordinated 144A Global Note,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Temporary Senior
Subordinated Global Note or the Regulation S Permanent Senior
Subordinated Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of
a beneficial interest in the IAI Senior Subordinated Global Note,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3)(d) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Senior Subordinated Global Note for Beneficial Interests in an
Unrestricted Senior Subordinated Global Note. A beneficial interest in any
Restricted Senior Subordinated Global Note may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Senior Subordinated
Global Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Senior Subordinated
Global Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(2) above and:
43
(A) such exchange or transfer is effected pursuant to
the Senior Subordinated Registered Exchange Offer in accordance with
the Senior Subordinated Registration Rights Agreement and the holder
of the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of
the Senior Subordinated Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
s Registration Statement in accordance with the Senior Subordinated
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Senior Subordinated Global Note proposes to
exchange such beneficial interest for a beneficial interest in
an Unrestricted Senior Subordinated Global Note, a certificate
from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in
a Restricted Senior Subordinated Global Note proposes to
transfer such beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest in an
Unrestricted Senior Subordinated Global Note, a certificate
from such holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Senior Subordinated Global Note has not yet
been issued, the Issuers shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one
or more Unrestricted Senior Subordinated Global Notes in an aggregate principal
amount equal to the aggregate principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Senior Subordinated Global
Note cannot be exchanged for, or transferred to Persons who take delivery
thereof in the form of, a beneficial interest in a Restricted Senior
Subordinated Global Note.
44
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(1) Beneficial Interests in Restricted Senior Subordinated
Global Notes to Restricted Definitive Notes. If any holder of a beneficial
interest in a Restricted Senior Subordinated Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Restricted Definitive Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Senior Subordinated Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than
those listed in subparagraphs (B) through (D) above, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3)(d) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Issuers or any of their Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Senior
Subordinated Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Issuers shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Senior Subordinated Global Note pursuant to
this Section
45
2.06(c) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Senior Subordinated Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Senior Subordinated Global Note pursuant to this Section 2.06(c)(1)
shall bear the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Senior
Subordinated Global Note to Definitive Notes. Notwithstanding Sections
2.06(c)(1)(A) and (C) hereof, a beneficial interest in the Regulation S
Temporary Senior Subordinated Global Note may not be exchanged for a
Definitive Note or transferred to a Person who takes delivery thereof in
the form of a Definitive Note prior to (A) the expiration of the
Restricted Period and (B) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act,
except in the case of a transfer pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 903 or
Rule 904.
(3) Beneficial Interests in Restricted Senior Subordinated
Global Notes to Unrestricted Definitive Notes. A holder of a beneficial
interest in a Restricted Senior Subordinated Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer
such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Senior Subordinated Registered Exchange Offer in accordance with
the Senior Subordinated Registration Rights Agreement and the holder
of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a
Person participating in the distribution of the Senior Subordinated
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Subordinated
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Senior Subordinated Global Note proposes to
exchange such beneficial interest for an Unrestricted
Definitive Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
46
(ii) if the holder of such beneficial interest in
a Restricted Senior Subordinated Global Note proposes to
transfer such beneficial interest to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
(4) Beneficial Interests in Unrestricted Senior Subordinated
Global Notes to Unrestricted Definitive Notes. If any holder of a
beneficial interest in an Unrestricted Senior Subordinated Global Note
proposes to exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
the aggregate principal amount of the applicable Senior Subordinated
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Issuers will execute and the Trustee will authenticate and deliver
to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(4) will be registered
in such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest requests through instructions to
the Registrar from or through the Depositary and the Participant or
Indirect Participant. The Trustee will deliver such Definitive Notes to
the Persons in whose names such Senior Subordinated Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will not bear the Private
Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Senior Subordinated Global Notes. If any Holder of a Restricted
Definitive Note proposes to exchange such note for a beneficial interest
in a Restricted Senior Subordinated Global Note or to transfer such
Restricted Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Senior Subordinated Global
Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such note for a beneficial interest in a
Restricted Senior Subordinated Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications
in item (2)(b) thereof;
47
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance on
an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D) above,
a certificate to the effect set forth in Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel required by
item (3)(d) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Issuers or any of their Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Senior Subordinated Global Note, in the case of
clause (B) above, the Senior Subordinated 144A Global Note, in the case of
clause (C) above, the Senior Subordinated Regulation S Global Note, and in all
other cases, the IAI Senior Subordinated Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Senior Subordinated Global Notes. A Holder of a Restricted
Definitive Note may exchange such note for a beneficial interest in an
Unrestricted Senior Subordinated Global Note or transfer such Restricted
Definitive Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Senior Subordinated Global Note
only if:
(A) such exchange or transfer is effected pursuant to
the Senior Subordinated Registered Exchange Offer in accordance with
the Senior Subordinated Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in
48
the distribution of the Senior Subordinated Exchange Notes or (iii)
a Person who is an affiliate (as defined in Rule 144) of the
Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Subordinated
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes
proposes to exchange such notes for a beneficial interest in
the Unrestricted Senior Subordinated Global Note, a
certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes
proposes to transfer such notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Senior Subordinated Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Senior Subordinated Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Senior Subordinated Global Notes. A Holder of an Unrestricted
Definitive Note may exchange such note for a beneficial interest in an
Unrestricted Senior Subordinated Global Note or transfer such Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Senior Subordinated Global Note at any time.
Upon receipt of a request for such an exchange or transfer, the Trustee
will cancel the applicable Unrestricted Definitive Note and increase or
cause to be increased the aggregate principal amount of one of the
Unrestricted Senior Subordinated Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or (3)
above at a time when an Unrestricted Senior Subordinated Global Note has not yet
been issued, the Issuers will issue and, upon receipt
49
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
will authenticate one or more Unrestricted Senior Subordinated Global Notes in
an aggregate principal amount equal to the principal amount of Definitive Notes
so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and registered
in the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Senior Subordinated Registered Exchange Offer in accordance with
the Senior Subordinated Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in
the distribution of the Senior Subordinated Exchange Notes or (iii)
a Person who is an affiliate (as defined in Rule 144) of the
Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Subordinated
Registration Rights Agreement;
50
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Subordinated Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive
Notes proposes to exchange such notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(d)
thereof; or
(ii) if the Holder of such Restricted Definitive
Notes proposes to transfer such notes to a Person who shall
take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Senior Subordinated Registered Exchange Offer. Upon the
occurrence of the Senior Subordinated Registered Exchange Offer in accordance
with the Senior Subordinated Registration Rights Agreement, the Issuers will
issue and, upon receipt of an Authentication Order in accordance with Section
2.02 hereof, the Trustee will authenticate:
(1) one or more Unrestricted Senior Subordinated Global Notes
in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Senior Subordinated Global Notes
accepted for exchange in the Senior Subordinated Registered Exchange Offer
by Persons that certify in the applicable Letters of Transmittal that they
are not Broker-Dealers, (B) they are not participating in a distribution
of the Senior Subordinated Exchange Notes and (C) they are not affiliates
(as defined in Rule 144) of the Issuers; and
(2) Unrestricted Definitive Notes in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Senior Subordinated Registered Exchange Offer
by Persons that certify in the applicable Letters of Transmittal that (A)
they are not Broker-Dealers, (B) they are not participating in a
distribution of the Senior Subordinated Exchange Notes and (C) they are
not affiliates (as defined in Rule 144) of the Issuers.
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Concurrently with the issuance of such notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Senior Subordinated
Global Notes to be reduced accordingly, and the Issuers will execute and the
Trustee will authenticate and deliver to the Persons designated by the Holders
of Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate
principal amount.
(g) Legends. The following legends will appear on the face of all
Senior Subordinated Global Notes and Definitive Notes issued under this Senior
Subordinated Indenture unless specifically stated otherwise in the applicable
provisions of this Senior Subordinated Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Senior Subordinated Global Note and each Definitive Note (and all
Senior Subordinated Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the
following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
FOLLOWING SENTENCE, BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER: (1) REPRESENTS THAT: (A) IT AND ANY
ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED INSTITUTIONAL BUYER"
(WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT
IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
ACCOUNT, (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN
THE MEANING OF RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), OR (C) IT IS NOT A
U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT), AND (2) AGREES FOR THE BENEFIT OF THE ISSUERS THAT IT WILL NOT
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY
BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES
ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND ONLY: (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, (C)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 901 OF REGULATION S UNDER THE SECURITIES ACT,
(E) IN A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000, TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
DELIVERS TO THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE
FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) RELATING TO THE
52
RESTRICTIONS ON TRANSFER OF THIS NOTE, OR (F) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF
WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE
TRUSTEE. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE
WITH (2)(E) OR (F) ABOVE, THE ISSUERS RESERVE THE RIGHT TO REQUIRE
THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER
EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT
THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO
REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT."
(B) Notwithstanding the foregoing, any Senior
Subordinated Global Note or Definitive Note issued pursuant to
subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3)
or (f) of this Section 2.06 (and all Senior Subordinated Notes
issued in exchange therefor or substitution thereof) will not bear
the Private Placement Legend.
(2) Senior Subordinated Global Note Legend. Each Senior
Subordinated Global Note will bear a legend in substantially the following
form:
"THIS SENIOR SUBORDINATED GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE SENIOR SUBORDINATED INDENTURE GOVERNING THIS NOTE) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.01 AND SECTION 2.06
OF THE SENIOR SUBORDINATED INDENTURE, (2) THIS SENIOR SUBORDINATED
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 2.06(a) OF THE SENIOR SUBORDINATED INDENTURE, (3) THIS
SENIOR SUBORDINATED GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE SENIOR SUBORDINATED
INDENTURE AND (4) THIS SENIOR SUBORDINATED GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.
53
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX)
("XXX"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Senior Subordinated Global Note
Legend. The Regulation S Temporary Senior Subordinated Global Note will
bear a Legend in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY SENIOR
SUBORDINATED GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN
THE SENIOR SUBORDINATED INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
SENIOR SUBORDINATED GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT
OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Senior Subordinated Global
Notes. At such time as all beneficial interests in a particular Senior
Subordinated Global Note have been exchanged for Definitive Notes or a
particular Senior Subordinated Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Senior Subordinated Global Note
will be returned to or retained and canceled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Senior Subordinated Global Note is exchanged for or transferred to
a Person who will take delivery thereof in the form of a beneficial interest in
another Senior Subordinated Global Note or for Definitive Notes, the principal
amount of Senior Subordinated Notes represented by such Senior Subordinated
Global Note will be reduced accordingly and an endorsement will be made on such
Senior Subordinated Global Note by the Trustee or by the Depositary at the
direction of the
54
Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Senior Subordinated Global Note, such
other Senior Subordinated Global Note will be increased accordingly and an
endorsement will be made on such Senior Subordinated Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Issuers will execute and the Trustee will authenticate Senior Subordinated
Global Notes and Definitive Notes upon receipt of an Authentication Order
in accordance with Section 2.02 hereof or at the Registrar's request.
(2) No service charge will be made to a Holder of a beneficial
interest in a Senior Subordinated Global Note or to a Holder of a
Definitive Note for any registration of transfer or exchange, but the
Issuers may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 4.10, 4.14 and 9.05
hereof).
(3) The Registrar will not be required to register the
transfer of or exchange of any Senior Subordinated Note selected for
redemption in whole or in part, except the unredeemed portion of any
Senior Subordinated Note being redeemed in part.
(4) All Senior Subordinated Global Notes and Definitive Notes
issued upon any registration of transfer or exchange of Senior
Subordinated Global Notes or Definitive Notes will be the valid
obligations of the Issuers, evidencing the same debt, and entitled to the
same benefits under this Senior Subordinated Indenture, as the Senior
Subordinated Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(5) The Issuers will not be required:
(A) to issue, to register the transfer of or to exchange
any Senior Subordinated Notes during a period beginning at the
opening of business 15 days before the day of any selection of
Senior Subordinated Notes for redemption under Section 3.02 hereof
and ending at the close of business on the day of selection;
(B) to register the transfer of or to exchange any
Senior Subordinated Note selected for redemption in whole or in
part, except the unredeemed portion of any Senior Subordinated Note
being redeemed in part; or
(C) to register the transfer of or to exchange a Senior
Subordinated Note between a record date and the next succeeding
interest payment date.
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(6) Prior to due presentment for the registration of a
transfer of any Senior Subordinated Note, the Trustee, any Agent and the
Issuers may deem and treat the Person in whose name any Senior
Subordinated Note is registered as the absolute owner of such Senior
Subordinated Note for the purpose of receiving payment of principal of and
interest on such Senior Subordinated Notes and for all other purposes, and
none of the Trustee, any Agent or the Issuers shall be affected by notice
to the contrary.
(7) The Trustee will authenticate Senior Subordinated Global
Notes and Definitive Notes in accordance with the provisions of Section
2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 Replacement Notes. If any mutilated Senior Subordinated
Note is surrendered to the Trustee or the Issuers and the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Senior
Subordinated Note, the Issuers will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Senior Subordinated Note
if the Trustee's requirements are met. If required by the Trustee or the
Issuers, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Senior Subordinated Note is replaced. The Issuers may charge for their
expenses in replacing a Senior Subordinated Note.
Every replacement Senior Subordinated Note is an additional
obligation of the Issuers and will be entitled to all of the benefits of this
Senior Subordinated Indenture equally and proportionately with all other Senior
Subordinated Notes duly issued hereunder.
Section 2.08 Outstanding Notes. The Senior Subordinated Notes
outstanding at any time are all the Senior Subordinated Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Senior Subordinated Global
Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Senior Subordinated Note does not cease to be outstanding
because the Issuers or an Affiliate of the Issuers holds the Senior Subordinated
Note; however, Senior Subordinated Notes held by the Issuers or a Subsidiary of
the Issuers shall not be deemed to be outstanding for purposes of Section
3.07(a) hereof.
If a Senior Subordinated Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Senior Subordinated Note is held by a
protected purchaser.
If the principal amount of any Senior Subordinated Note is
considered paid under Section 4.01 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
If the Paying Agent (other than the Issuers, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Senior
56
Subordinated Notes payable on that date, then on and after that date such Senior
Subordinated Notes will be deemed to be no longer outstanding and will cease to
accrue interest.
Section 2.09 Treasury Notes. In determining whether the Holders of
the required principal amount of Senior Subordinated Notes have concurred in any
direction, waiver or consent, Senior Subordinated Notes owned by the Issuers or
any Guarantor, or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuers or any Guarantor,
will be considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such
direction, waiver or consent, only Senior Subordinated Notes that a Responsible
Officer of the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes. Until certificates representing Senior
Subordinated Notes are ready for delivery, the Issuers may prepare and the
Trustee, upon receipt of an Authentication Order, will authenticate temporary
Senior Subordinated Notes. Temporary Senior Subordinated Notes will be
substantially in the form of certificated Senior Subordinated Notes but may have
variations that the Issuers consider appropriate for temporary Senior
Subordinated Notes and as may be reasonably acceptable to the Trustee. Without
unreasonable delay, the Issuers will prepare and the Trustee will authenticate
definitive Senior Subordinated Notes in exchange for temporary Senior
Subordinated Notes.
Holders of temporary Senior Subordinated Notes will be entitled to
all of the benefits of this Senior Subordinated Indenture.
Section 2.11 Cancellation. The Issuers at any time may deliver
Senior Subordinated Notes to the Trustee for cancellation. The Registrar and
Paying Agent will forward to the Trustee any Senior Subordinated Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Senior Subordinated Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
will dispose of such canceled Senior Subordinated Notes in its customary manner
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Senior Subordinated Notes will be delivered
to the Issuers. The Issuers may not issue new Senior Subordinated Notes to
replace Senior Subordinated Notes that it has paid or that have been delivered
to the Trustee for cancellation.
Section 2.12 Defaulted Interest. If the Issuers default in a payment
of interest on the Senior Subordinated Notes, they will pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on
the defaulted interest, to the Persons who are Holders on a subsequent special
record date, in each case at the rate provided in the Senior Subordinated Notes
and in Section 4.01 hereof. The Issuers will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Senior Subordinated
Note and the date of the proposed payment. The Issuers will fix or cause to be
fixed each such special record date and payment date; provided that no such
special record date may be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Issuers (or, upon the written request of the Issuers, the Trustee in the
name and at the expense of the Issuers) will mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
57
Section 2.13 CUSIP Numbers. The Issuers in issuing the Senior
Subordinated Notes may use "CUSIP" numbers (if then generally in use), and, if
so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Senior Subordinated Notes or as contained in any notice of a redemption
and that reliance may be placed only on the other identification numbers printed
on the Senior Subordinated Notes, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Issuers will promptly notify
the Trustee in writing of any change in the "CUSIP" numbers.
Section 2.14 Issuance of Additional Senior Subordinated Notes. The
Issuers will be entitled, from time to time, subject to its compliance with
Section 4.09 hereof, without consent of the Holders, to issue Additional Senior
Subordinated Notes under this Senior Subordinated Indenture with identical terms
as the Initial Senior Subordinated Notes issued on the Issue Date other than
with respect to (a) the date of issuance, (b) the issue price, (c) the amount of
interest payable on the first interest payment date and (d) any adjustments in
order to conform to and ensure compliance with the Securities Act (or other
applicable securities laws). The Initial Senior Subordinated Notes issued on the
Issue Date, any Additional Senior Subordinated Notes and all Senior Subordinated
Exchange Notes issued in exchange therefor will be treated as a single class for
all purposes under this Senior Subordinated Indenture.
With respect to any Additional Senior Subordinated Notes, the
Issuers will set forth in an Officer's Certificate pursuant to a resolution of
the Board of Directors of the Issuers, copies of which will be delivered to the
Trustee, the following information:
(1) the aggregate principal amount of such Additional Senior
Subordinated Notes to be authenticated and delivered pursuant to this
Senior Subordinated Indenture;
(2) the issue price, the issue date and the CUSIP number of
such Additional Senior Subordinated Notes; and
(3) whether such Additional Senior Subordinated Notes will be
subject to transfer restrictions or will be issued in the form of Senior
Subordinated Exchange Notes.
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee. If the Issuers elect to redeem
Senior Subordinated Notes pursuant to the optional redemption provisions of
Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not
more than 60 days before a redemption date, an Officers' Certificate setting
forth:
(1) the clause of this Senior Subordinated Indenture pursuant
to which the redemption shall occur;
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(2) the redemption date;
(3) the principal amount of Senior Subordinated Notes to be
redeemed;
(4) the redemption price; and
(5) applicable CUSIP Numbers.
Section 3.02 Selection of Notes to Be Redeemed or Purchased. If less
than all of the Senior Subordinated Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Senior Subordinated Notes
for redemption or purchase as follows:
(1) if the Senior Subordinated Notes are listed on any
national securities exchange, in compliance with the requirements of the
principal national securities exchange on which the Senior Subordinated
Notes are listed; or
(2) if the Senior Subordinated Notes are not listed on any
national securities exchange, on a pro rata basis, by lot or by such
method as the Trustee deems fair and appropriate.
In the event of partial redemption or purchase by lot, the
particular Senior Subordinated Notes to be redeemed or purchased will be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption or purchase date by the Trustee from the
outstanding Senior Subordinated Notes not previously called for redemption or
purchase.
The Trustee will promptly notify the Company in writing of the
Senior Subordinated Notes selected for redemption or purchase and, in the case
of any Senior Subordinated Note selected for partial redemption or purchase, the
principal amount thereof to be redeemed or purchased. Senior Subordinated Notes
and portions of Senior Subordinated Notes selected will be in amounts of $1,000
or whole multiples of $1,000; provided that no Senior Subordinated Notes of
$1,000 or less shall be redeemed or purchased in part. Except as provided in the
preceding sentence, provisions of this Senior Subordinated Indenture that apply
to Senior Subordinated Notes called for redemption or purchase also apply to
portions of Senior Subordinated Notes called for redemption.
Section 3.03 Notice of Redemption(a) . (a) At least 30 days but not
more than 60 days before a redemption date, the Issuers will mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Senior
Subordinated Notes are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of the Senior Subordinated
Notes or a satisfaction and discharge of this Senior Subordinated Indenture
pursuant to Articles 8 or 12 hereof.
(b) The notice will identify the Senior Subordinated Notes
(including CUSIP Numbers) to be redeemed and will state:
59
(1) the redemption date;
(2) the redemption price;
(3) if any Senior Subordinated Note is being redeemed in part,
the portion of the principal amount of such Senior Subordinated Note to be
redeemed and that, after the redemption date upon surrender of such Senior
Subordinated Note, a new Senior Subordinated Note or Senior Subordinated
Notes in principal amount equal to the unredeemed portion of the original
Senior Subordinated Note will be issued upon cancellation of the original
Senior Subordinated Note;
(4) the name and address of the Paying Agent;
(5) that Senior Subordinated Notes called for redemption must
be surrendered to the Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest on Senior Subordinated Notes called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Senior Subordinated Notes and/or
Section of this Senior Subordinated Indenture pursuant to which the Senior
Subordinated Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Senior Subordinated Notes.
At the Issuers' request, the Trustee will give the notice of
redemption in the Issuers' name and at their expense; provided, however, that
the Issuers have delivered to the Trustee, at least 45 days prior to the
redemption date (unless a shorter notice period is satisfactory to the Trustee),
an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Senior Subordinated
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price. On or before
the relevant redemption or purchase date, the Issuers will deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption or
purchase price of and accrued interest and Additional Interest, if any, on all
Senior Subordinated Notes to be redeemed or purchased on that date. The Trustee
or the Paying Agent will promptly return to the Issuers any money deposited with
the Trustee or the Paying Agent by the Issuers in excess of the amounts
necessary to pay the redemption or purchase price of, and accrued interest and
Additional Interest, if any, on, all Senior Subordinated Notes to be redeemed or
purchased.
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If the Issuers comply with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest will cease to
accrue on the Senior Subordinated Notes or the portions of Senior Subordinated
Notes called for redemption or purchase. If a Senior Subordinated Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Senior Subordinated Note was registered at
the close of business on such record date. If any Senior Subordinated Note
called for redemption or purchase is not so paid upon surrender for redemption
or purchase because of the failure of the Issuers to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
or purchase date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Senior Subordinated Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part. Upon surrender of
a Senior Subordinated Note that is redeemed or purchased in part, the Issuers
will issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Issuers a new Senior
Subordinated Note equal in principal amount to the unredeemed or unpurchased
portion of the Senior Subordinated Note surrendered.
Section 3.07 Optional Redemption. (a) At any time prior to October
1, 2007, the Issuers may on any one or more occasions redeem up to 35% of the
aggregate principal amount of Senior Subordinated Notes issued under this Senior
Subordinated Indenture (including additional notes issued after Issue Date) at a
redemption price of 109% of the principal amount thereof, plus accrued and
unpaid interest and Additional Interest, if any, to, but not including, the
redemption date, in each case, with the net cash proceeds of one or more Equity
Offerings (1) by the Issuers or (2) by any direct or indirect parent of VHS
Holdco II, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of VHS Holdco II or used to purchase
Capital Stock (other than Disqualified Stock) of VHS Holdco II from it; provided
that:
(1) at least 65% of the aggregate principal amount of Senior
Subordinated Notes issued under this Senior Subordinated Indenture
(excluding Senior Subordinated Notes held by the Issuers and their
Subsidiaries) remains outstanding immediately after the occurrence of such
redemption; and
(2) the redemption occurs within 90 days of the date of the
closing of such Equity Offering.
(b) Except pursuant to the preceding paragraph or as otherwise set
forth below, the Senior Subordinated Notes will not be redeemable at the
Issuers' option prior to October 1, 2009; provided, however, the Issuers may
acquire the Senior Subordinated Notes by means other than a redemption, whether
by tender offer, open market purchases, negotiated transactions or otherwise, in
accordance with applicable securities laws, so long as such acquisition does not
violate the terms of this Senior Subordinated Indenture.
(c) On or after October 1, 2009, the Issuers may redeem all or a
part of the Senior Subordinated Notes upon not less than 30 nor more than 60
days' notice, at the
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redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Additional Interest, if any, on the Senior
Subordinated Notes redeemed to the applicable redemption date, if redeemed
during the twelve-month period beginning on October 1 of the years indicated
below, subject to the rights of Holders on the relevant record date to receive
interest on the relevant interest payment date:
Year Percentage
---- ----------
2009..................................................................................... 104.500%
2010..................................................................................... 103.000%
2011..................................................................................... 101.500%
2012 and thereafter...................................................................... 100.000%
Unless the Issuers default in the payment of the redemption price,
interest will cease to accrue on the Senior Subordinated Notes or portions
thereof called for redemption on the applicable redemption date.
(d) At any time prior to October 1, 2009, the Issuers may also
redeem all or a part of the Senior Subordinated Notes, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
of Senior Subordinated Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Additional Interest, if any, to, but not
including, the date of redemption (subject to the rights of Holders of Senior
Subordinated Notes on the relevant record date to receive interest due on the
relevant interest payment date).
(e) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption. The Issuers are not required to
make mandatory redemption or sinking fund payments with respect to the Senior
Subordinated Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds. In
the event that, pursuant to Section 4.10 hereof, the Issuers are required to
commence an offer to all holders to purchase Senior Subordinated Notes (an
"Asset Sale Offer"), it shall follow the procedures specified below.
(a) The Asset Sale Offer shall be made to all holders and if the
Issuers elect (or are required by the terms of other pari passu indebtedness),
all holders of other Indebtedness that is pari passu with the Senior
Subordinated Notes. The Asset Sale Offer shall remain open for a period of at
least 20 Business Days following its commencement and not more than 30 Business
Days, except to the extent that a longer period is required by applicable law
(the "Offer Period"). No later than five Business Days after the termination of
the Offer Period (the "Purchase Date"), the Issuers shall apply all Excess
Proceeds (the "Offer Amount") to the purchase of Senior Subordinated Notes and
such other pari passu Indebtedness, if any, (on a pro rata basis, if applicable)
or, if less than the Offer Amount has been tendered, all Senior Subordinated
Notes and other Indebtedness tendered in response to the Asset Sale Offer.
Payment for any Senior Subordinated Notes so purchased shall be made pursuant to
Section 4.01 hereof.
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(b) If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
and Special Interest, if any, shall be paid to the Person in whose name a Senior
Subordinated Note is registered at the close of business on such record date,
and no additional interest shall be payable to holders who tender Senior
Subordinated Notes pursuant to the Asset Sale Offer.
(c) Upon the commencement of an Asset Sale Offer, the Issuers shall
send, by first class mail, a notice to the Trustee and each of the holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such holders to tender Senior Subordinated Notes pursuant to
the Asset Sale Offer. The notice, which shall govern the terms of the Asset Sale
Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Senior Subordinated Note not tendered or accepted
for payment shall continue to accrue interest;
(4) that, unless the Issuers default in making such payment,
any Senior Subordinated Note accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Purchase Date;
(5) that holders electing to have a Senior Subordinated Note
purchased pursuant to an Asset Sale Offer may elect to have Senior
Subordinated Notes purchased in integral multiples of $1,000 only;
(6) that holders electing to have Senior Subordinated Notes
purchased pursuant to any Asset Sale Offer shall be required to surrender
the Senior Subordinated Note, with the form entitled "Option of Holder to
Elect Purchase" attached to the Senior Subordinated Notes completed, or
transfer by book-entry transfer, to the Issuers, a Depositary, if
appointed by the Issuers, or a Paying Agent at the address specified in
the notice at least three days before the Purchase Date;
(7) that holders shall be entitled to withdraw their election
if the Issuers, the Depositary or the Paying Agent, as the case may be,
receives, not later than on the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Senior Subordinated Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Senior Subordinated Note purchased;
(8) that, if the aggregate principal amount of Senior
Subordinated Notes and other pari passu Indebtedness surrendered by
holders thereof exceeds the Offer Amount, the Issuers shall select the
Senior Subordinated Notes and other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Senior
Subordinated Notes and such other pari passu Indebtedness surrendered
(with such
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adjustments as may be deemed appropriate by the Issuers so that only
Senior Subordinated Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
(9) that holders whose Senior Subordinated Notes were
purchased only in part shall be issued new Senior Subordinated Notes equal
in principal amount to the unpurchased portion of the Senior Subordinated
Notes surrendered (or transferred by book-entry transfer).
(d) On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Senior Subordinated Notes or portions thereof tendered pursuant
to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all
Senior Subordinated Notes tendered, and shall deliver or cause to be delivered
to the Trustee the Senior Subordinated Notes properly accepted together with an
Officer's Certificate stating that such Senior Subordinated Notes or portions
thereof were accepted for payment by the Issuers in accordance with the terms of
this Section 3.09. The Issuers, the Depositary or the Paying Agent, as the case
may be, shall promptly (but in any case not later than five days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Senior Subordinated Notes tendered by such Holder and
accepted by the Issuers for purchase, and the Issuers, shall promptly issue a
new Senior Subordinated Note, and the Trustee, upon written request from the
Issuers shall authenticate and mail or deliver (or cause to be transferred by
book entry) such new Senior Subordinated Note to such Holder, in a principal
amount equal to any unpurchased portion of the Senior Subordinated Note
surrendered. Any Senior Subordinated Note not so accepted shall be promptly
mailed or delivered by the Issuers to the Holder thereof. The Issuers shall
publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Notes. The Issuers will pay or cause to be
paid the principal of, premium, if any, and interest and Additional Interest, if
any, on, the Senior Subordinated Notes on the dates and in the manner provided
in the Senior Subordinated Notes. Principal, premium, if any, and interest and
Additional Interest, if any will be considered paid on the date due if the
Paying Agent, if other than the Issuers or a Subsidiary thereof, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
principal of, premium, if any, and interest and Additional Interest, if any,
then due. The Issuers will pay all Additional Interest, if any, in the same
manner on the dates and in the amounts set forth in the Senior Subordinated
Registration Rights Agreement.
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The Issuers will pay interest on overdue principal at the rate
specified therefor in the Senior Subordinated Notes, and it shall pay interest
on overdue installments of interest at the same rate borne by the Senior
Subordinated Notes to the extent lawful.
Section 4.02 Maintenance of Office or Agency. The Issuers will
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Senior Subordinated Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers in respect of the Senior Subordinated Notes and this Senior
Subordinated Indenture may be served. The Issuers will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Issuers fail to maintain any such required
office or agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other
offices or agencies where the Senior Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission will in
any manner relieve the Issuers of their obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for such purposes. The
Issuers will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Issuers hereby designate the Corporate Trust Office of the
Trustee as one such office or agency of the Issuers in accordance with Section
2.03 hereof.
Section 4.03 Reports to Holders(1) . (1) Whether or not
required by the SEC, so long as any Senior Subordinated Notes are
outstanding, VHS Holdco II will furnish to the Holders of Senior
Subordinated Notes, within 45 days after the end of each of the first
three fiscal quarters of each fiscal year commencing with the fiscal
quarter ended September 30, 2004 or (in the case of annual financial
information) within 90 days after the end of each fiscal year, all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if VHS Holdco II
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations"; and with
respect to the annual information only, a report on the annual financial
statements by VHS Holdco II's certified independent accountants. In
addition, whether or not required by the SEC, VHS Holdco II will file a
copy of all of the information and reports referred to above (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(2) So long as any Senior Subordinated Notes remain
outstanding, VHS Holdco II will furnish to the Holders of the Senior
Subordinated Notes and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
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(3) For so long as Vanguard is a Guarantor (there being no
obligation of Vanguard to do so), holds no material assets other than
cash, Cash Equivalents and the Capital Stock of VHS Holdco I or the
Issuers (and performs the related incidental activities associated with
such ownership) and complies with the requirements of Rule 3-10 of
Regulation S-X promulgated by the SEC (or any successor provision), the
reports, information and other documents required to be filed and
furnished to holders of the Senior Subordinated Notes pursuant to this
covenant may, at the option of VHS Holdco II, be filed by and be those of
Vanguard rather than VHS Holdco II.
(4) Notwithstanding the foregoing, such requirements shall be
deemed satisfied prior to the commencement of the Senior Subordinated
Registered Exchange Offer or the effectiveness of the Shelf Registration
Statement by the filing with the SEC of the Exchange Offer Registration
Statement and/or Shelf Registration Statement, and any amendments thereto,
with such financial information that satisfies Regulation S-X of the
Securities Act.
Section 4.04 Compliance Certificate(a) . (a) The Issuers shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Issuers an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Issuers 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 Issuers are taking or proposes to take
with respect thereto. The Issuers also shall comply with Section 314(a)(4) of
the TIA.
(b) So long as any of the Senior Subordinated Notes are outstanding,
the Issuers will deliver to the Trustee, forthwith upon any Officer becoming
aware of any Default or Event of Default, an Officers' Certificate specifying
such Default or Event of Default and what action the Issuers are taking or
propose to take with respect thereto.
Section 4.05 Intentionally Omitted.
Section 4.06 Intentionally Omitted.
Section 4.07 Restricted Payments. (a) VHS Holdco II will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of VHS Holdco II's or any of its Restricted
Subsidiaries' Equity Interests, including any dividend or distribution
payable in connection with any merger or consolidation (other than (A)
dividends or distributions by VHS Holdco II) payable in Equity Interests
(other than Disqualified Stock) of VHS Holdco II or in options, warrants
or other rights to purchase such Equity Interests (other than Disqualified
Stock) or (B) dividends or distributions by a Restricted Subsidiary to VHS
Holdco II or any other Restricted Subsidiary so long as, in the case of
any dividend or distribution payable on or in respect of any class or
series of securities issued by a Restricted Subsidiary other than a
Wholly-Owned Subsidiary, VHS Holdco II or a Restricted Subsidiary receives
at least
66
its pro rata share of such dividend or distribution in accordance with its
Equity Interests in such class or series of securities);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving either of the Issuers or any direct or indirect
parent entity of either of the Issuers) any Equity Interests of either of
the Issuers or any such parent entity;
(3) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, in each case prior to
any scheduled repayment, sinking fund payment or maturity, any
Subordinated Indebtedness of VHS Holdco II or any Subsidiary Guarantor
(other than (A) Indebtedness permitted under clauses (8) and (9) of the
definition of "Permitted Debt" or (B) the purchase, repurchase or other
acquisition of Subordinated Indebtedness, as the case may be, purchased in
anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the
date of purchase, repurchase or acquisition); or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) being
collectively referred to as "Restricted Payments"), unless, at the time of
and after giving effect to such Restricted Payment:
(A) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted
Payment;
(B) VHS Holdco II would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09(a) hereto; and
(C) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by VHS Holdco II and
the Restricted Subsidiaries after the Issue Date (excluding
Restricted Payments permitted by clauses (2), (3), (4), (6), (8),
(9), (10), (11), (12), (13), (15), (16), (18) and (20) of Section
4.07(b)), is less than the sum, without duplication, of
(i) 50% of the Consolidated Net Income of VHS
Holdco II for the period (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the
Issue Date, to the end of VHS Holdco II's most recently ended
fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, in the
case such Consolidated Net Income for such period is a
deficit, minus 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds and
the fair market value, as determined in good faith by the
Board of Directors of VHS Holdco II, of property and
marketable securities received by the
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Issuers since immediately after the Issue Date from the issue
or sale of (x) Equity Interests of VHS Holdco II (including
Retired Capital Stock (as defined below)) (other than (a)
Excluded Contributions, (b) Designated Preferred Stock and (c)
cash proceeds and marketable securities received from the sale
of Equity Interests to members of management, directors or
consultants of VHS Holdco II, any direct or indirect parent
entities of VHS Holdco II and its Subsidiaries following the
Issue Date to the extent such amounts have been applied to
Restricted Payments made in accordance with clause (4) of the
next succeeding paragraph) and, to the extent actually
contributed to VHS Holdco II, Equity Interests of any direct
or indirect parent entities of VHS Holdco II and (y) debt
securities of VHS Holdco II that have been converted into such
Equity Interests of VHS Holdco II (other than Refunding
Capital Stock (as defined below) or Equity Interests or
convertible debt securities of VHS Holdco II sold to a
Restricted Subsidiary or VHS Holdco II, as the case may be,
and other than Disqualified Stock or debt securities that have
been converted into Disqualified Stock), plus
(iii) 100% of the aggregate amount of cash and the
fair market value, as determined in good faith by the Board of
Directors of VHS Holdco II, of property and marketable
securities contributed to the capital of VHS Holdco II
following the Issue Date (other than (x) Excluded
Contributions, (y) the Cash Contribution Amount and (z)
contributions by a Restricted Subsidiary), plus
(iv) 100% of the aggregate amount received in cash
and the fair market value, as determined in good faith by the
Board of Directors of VHS Holdco II, of property and
marketable securities received after the Issue Date by means
of (x) the sale or other disposition (other than to VHS Holdco
II or a Restricted Subsidiary) of Restricted Investments made
by VHS Holdco II or its Restricted Subsidiaries and
repurchases and redemptions of such Restricted Investments
from VHS Holdco II or its Restricted Subsidiaries and
repayments of loans or advances which constitute Restricted
Investments by VHS Holdco II or its Restricted Subsidiaries or
(y) the sale (other than to VHS Holdco II or a Restricted
Subsidiary) of the Capital Stock of an Unrestricted Subsidiary
or a distribution from an Unrestricted Subsidiary (other than
in each case to the extent the Investment in such Unrestricted
Subsidiary was made by a Restricted Subsidiary pursuant to
clause (5) or (15) of the next succeeding paragraph or to the
extent such Investment constituted a Permitted Investment) or
a dividend from an Unrestricted Subsidiary, plus
(v) in the case of the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary or the
merger or consolidation of an Unrestricted Subsidiary into VHS
Holdco II or a Restricted Subsidiary or the transfer of assets
of an Unrestricted Subsidiary to VHS Holdco II or a Restricted
Subsidiary, the fair market value of the Investment in such
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Unrestricted Subsidiary, as determined by the Board of
Directors of VHS Holdco II in good faith at the time of the
redesignation of such Unrestricted Subsidiary as a Restricted
Subsidiary or at the time of such merger, consolidation or
transfer of assets (other than an Unrestricted Subsidiary to
the extent the Investment in such Unrestricted Subsidiary was
made by a Restricted Subsidiary pursuant to clause (5) or (15)
of the next succeeding paragraph or to the extent such
Investment constituted a Permitted Investment).
(b) The provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or other distribution or the
consummation of any irrevocable redemption within 60 days after the date
of declaration of the dividend or distribution or giving of the
irrevocable redemption notice, as the case may be, if, at the date of
declaration or notice, such dividend, distribution or redemption payment,
as the case may be, would have complied with the provisions of the Senior
Subordinated Indenture;
(2) (A) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Issuers or any direct or
indirect parent corporation of the Issuers ("Retired Capital Stock") or
Subordinated Indebtedness, as the case may be, in exchange for or out of
the proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary or the Issuers) of Equity Interests of the Issuers
or any direct or indirect parent of the Issuers or contributions to the
equity capital of the Issuers (in each case, other than Disqualified
Stock) ("Refunding Capital Stock") and (B) the declaration and payment of
accrued dividends on the Retired Capital Stock out of the proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary or
the Issuers) of Refunding Capital Stock;
(3) the redemption, repurchase or other acquisition or
retirement for value of Subordinated Indebtedness of VHS Holdco II or any
Subsidiary Guarantor made by exchange for, or out of the proceeds of the
substantially concurrent sale of, new Indebtedness of the borrower
thereof, which is incurred in compliance with Section 4.09 hereof so long
as (A) the principal amount of such new Indebtedness does not exceed the
principal amount of the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired for value plus the amount of any
reasonable premium required to be paid under the terms of the instrument
governing the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired for value, (B) such new Indebtedness is subordinated
to the Senior Subordinated Notes and any such applicable Guarantees at
least to the same extent as such Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value is subordinated to
the Senior Subordinated Notes and/or Guarantees, (C) such new Indebtedness
has a final scheduled maturity date equal to or later than the final
scheduled maturity date of the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value and (D) such new
Indebtedness has a Weighted Average Life to Maturity equal to or greater
than the remaining Weighted Average Life to Maturity of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired for
value;
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(4) a Restricted Payment to pay for the repurchase, retirement
or other acquisition or retirement for value of common Equity Interests of
the Issuers or any of their direct or indirect parent entities held by any
future, present or former employee, director or consultant of VHS Holdco
II, any of its Subsidiaries or (to the extent such person renders services
to the businesses of VHS Holdco II and its Subsidiaries) VHS Holdco II's
direct or indirect parent entities, pursuant to any management equity plan
or stock option plan or any other management or employee benefit plan or
agreement or arrangement; provided that the aggregate amount of all such
Restricted Payments made under this clause (4) does not exceed in any
calendar year $5.0 million (with unused amounts in any calendar year being
carried over to the next two succeeding calendar years); and provided,
further, that such amount in any calendar year may be increased by an
amount not to exceed (A) the cash proceeds from the sale of Equity
Interests of VHS Holdco II and, to the extent contributed to VHS Holdco
II, Equity Interests of any of its direct or indirect parent entities, in
each case to members of management, directors or consultants of VHS Holdco
II, any of its Subsidiaries or (to the extent such person renders services
to the businesses of VHS Holdco II and its Subsidiaries) VHS Holdco II's
direct or indirect parent entities, that occurs after the Issue Date plus
(B) the cash proceeds of key man life insurance policies received by VHS
Holdco II or its Restricted Subsidiaries, or by any direct or indirect
parent entity to the extent contributed to VHS Holdco II, after the Issue
Date (provided that VHS Holdco II may elect to apply all or any portion of
the aggregate increase contemplated by clauses (A) and (B) above in any
calendar year) less (C) the amount of any Restricted Payments previously
made pursuant to clauses (A) and (B) of this clause (4);
(5) Investments in Unrestricted Subsidiaries having an
aggregate fair market value, taken together with all other Investments
made pursuant to this clause (5) that are at the time outstanding, without
giving effect to the sale of an Unrestricted Subsidiary to the extent the
proceeds of such sale do not consist of cash and/or marketable securities,
not to exceed $25.0 million at the time of such Investment (with the fair
market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value);
(6) repurchases of Equity Interests deemed to occur upon
exercise of stock options or warrants if such Equity Interests represent a
portion of the exercise price of such options or warrants;
(7) the payment of dividends on the common equity interests of
the Issuers (or the payment of dividends to any direct or indirect parent
of the Issuers to fund a payment of dividends on such entity's common
stock) following the first public offering of the common stock of the
Issuers, or the common equity interests of any of their direct or indirect
parent entities after the Issue Date, of up to 6.0% per annum or the net
proceeds received by or contributed to the Issuers in any public offering,
other than public offerings with respect to common equity interests
registered on Form S-8 (or any successor form that provides for
registration of securities offered to employees of the registrant) and
other than any public sale constituting an Excluded Contribution;
(8) Investments that are made with Excluded Contributions;
70
(9) the declaration and payment of dividends to, or the making
of loans to, VHS Holdings LLC, a Delaware limited liability company, VHS
Holdco I, or Vanguard in amounts required for VHS Holdings LLC, VHS Holdco
I, or Vanguard to pay:
(A) (i) overhead (including salaries and other
compensation expenses) and franchise or similar tax liabilities,
legal, accounting and other professional fees and expenses in
connection with, and to the extent attributable, to the maintenance
of VHS Holdings LLC's, VHS Holdco I's or Vanguard's existence and
its ownership of VHS Holdco I, Vanguard, the Issuers or any of their
Subsidiaries, as applicable, (ii) fees and expenses related to any
equity offering, investment or acquisition permitted hereunder
(whether or not successful) and (iii) other fees and expenses in
connection with, and to the extent attributable to, the maintenance
of VHS Holdings LLC's, VHS Holdco I's or Vanguard's existence and
its ownership of VHS Holdco I, Vanguard, the Issuers or any of their
Subsidiaries, as applicable; and
(B) with respect to each tax year (or portion thereof),
federal, state or local income taxes (as the case may be) imposed
directly on or allocated to VHS Holdings LLC, VHS Holdco I or
Vanguard or which are due and payable by VHS Holdings LLC, VHS
Holdco I or Vanguard as part of a consolidated group, to the extent
such income taxes are attributable to the income of VHS Holdco I,
the Issuers or any of their Subsidiaries;
(10) the declaration and payment of dividends to, or the
making of any distribution or other payment to, VHS Holdco I in amounts
sufficient to permit VHS Holdco I to pay non-deferrable scheduled cash
interest when due on the Senior Discount Notes and any additional cash
interest (at a rate not to exceed 1% per annum) payable with respect to
the Senior Discount Notes to the extent required pursuant to the Senior
Discount Registration Rights Agreement; provided that such amounts are
used by VHS Holdco I to pay such interest in accordance with this clause
(10) promptly after receipt of such payment or distribution;
(11) Distributions or payments of Securitization Fees;
(12) cash dividends or other distributions on Capital Stock of
VHS Holdco II or any of its Restricted Subsidiaries used to, or the making
of loans, the proceeds of which will be used to, fund the payment of fees
and expenses incurred in connection with the Transactions, this offering
or owed to Affiliates, in each case to the extent permitted by Section
4.11 hereof;
(13) declaration and payment of dividends to holders of any
class or series of Disqualified Stock of VHS Holdco II or any Restricted
Subsidiary issued in accordance with Section 4.09 hereof to the extent
such dividends are included in the definition of Fixed Charges;
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(14) other Restricted Payments in an aggregate amount not to
exceed $50.0 million;
(15) the declaration and payment of dividends or distributions
to holders of any class or series of Designated Preferred Stock issued
after the Issue Date and the declaration and payment of dividends to any
direct or indirect parent company of VHS Holdco II, the proceeds of which
will be used to fund the payment of dividends to holders of any class or
series of Designated Preferred Stock of any direct or indirect parent
company of VHS Holdco II issued after the Issue Date; provided that (A)
for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of
issuance of such Designated Preferred Stock, after giving effect to such
issuance on the first day of such period (and the payment of dividends or
distributions) on a pro forma basis, VHS Holdco II would have had a Fixed
Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate
amount of dividends declared and paid pursuant to this clause (15) does
not exceed the net cash proceeds actually received by the Issuers from any
such sale of Designated Preferred Stock issued after the Issue Date;
(16) the distribution, as a dividend or otherwise, of shares
of Capital Stock of, or Indebtedness owed to VHS Holdco II or a Restricted
Subsidiary by, Unrestricted Subsidiaries;
(17) the repurchase, redemption or other acquisition or
retirement for value of any Subordinated Indebtedness pursuant to the
provisions similar to those described in Section 4.10 and Section 4.14
hereof; provided that all Senior Subordinated Notes tendered by holders of
the Senior Subordinated Notes in connection with the related Change of
Control Offer or Asset Sale Offer, as applicable, have been repurchased,
redeemed or acquired for value;
(18) payments to VHS Holdco I or Vanguard to enable Vanguard
to (A) purchase Existing Vanguard Senior Subordinated Notes validly
tendered, and not validly withdrawn, in the Offer in accordance with the
terms thereof or (B) pay when due accrued but unpaid interest on the
Existing Vanguard Senior Subordinated Notes (after giving effect to the
consummation of the Offer); provided that such amounts are used by
Vanguard to purchase such Existing Vanguard Senior Subordinated Notes or
pay such interest, as the case may be, in accordance with this clause (18)
promptly after receipt of such payment;
(19) payments or distributions to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of all or substantially all of the
assets of VHS Holdco II or any direct or indirect parent entity of VHS
Holdco II that complies with the provisions of the Senior Subordinated
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the property and assets of VHS Holdco II; provided
that, as a result of such consolidation, merger or transfer of assets, the
Issuers have made a Change of Control Offer pursuant to Section 4.14
hereof and any Senior Subordinated Notes tendered in connection therewith
have been purchased; and
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(20) cash payments in lieu of fractional shares issuable as
dividends on preferred stock or upon the conversion of any convertible
debt securities of either Issuer or any of their Restricted Subsidiaries;
provided that the Board of Directors of VHS Holdco II shall have
determined in good faith that such payments are not made for the purpose
of evading the limitations of this Section 4.07;
provided that at the time of, and after giving effect to, any Restricted Payment
permitted under clauses 4.07(b) (2) (with respect to the payment of dividends on
Refunding Capital Stock pursuant to clause (B) thereof), (5), (7), (11), (13),
(14), (15), (16), (17) and (20) above, no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof.
(c) The amount of all Restricted Payments (other than cash) will be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by VHS Holdco II or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.07 will be determined in good faith by the Board of Directors of VHS
Holdco II.
(d) VHS Holdco II will not permit any Unrestricted Subsidiary to
become a Restricted Subsidiary except pursuant to the second to last sentence of
the definition of Unrestricted Subsidiary. For purposes of designating any
Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding investments
by VHS Holdco II and the Restricted Subsidiaries (except to the extent repaid)
in the Subsidiary so designated will be deemed to be Restricted Payments in an
amount determined as set forth in the second paragraph of the definition of
Investments. Such designation will be permitted only if a Restricted Payment in
such amount would be permitted at such time under this covenant or the
definition of Permitted Investments and if such Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
Section 4.08 Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries(a) . (a) VHS Holdco II will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to VHS Holdco II or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any Indebtedness owed to VHS Holdco II or any of its
Restricted Subsidiaries;
(2) make loans or advances to VHS Holdco II or any of its
Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to
VHS Holdco II or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof will not apply to
encumbrances or restrictions existing under or by reason of:
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(1) contractual encumbrances or restrictions in effect on the
Issue Date, including, without limitation, pursuant to Existing
Indebtedness or the Credit Agreement and related documentation and the
Senior Discount Indenture;
(2) the Senior Subordinated Indenture and the Existing
Vanguard Senior Subordinated Notes after giving effect to the consummation
of the Offer;
(3) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in clause (3) of Section 4.08(a) hereof;
(4) applicable law or any applicable rule, regulation or
order;
(5) any agreement or other instrument of a Person acquired by
VHS Holdco II or any Restricted Subsidiary in existence at the time of
such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired;
(6) contracts for the sale of assets, including, without
limitation, customary restrictions with respect to a Subsidiary pursuant
to an agreement that has been entered into for the sale or disposition of
all or substantially all of the Capital Stock or assets of such
Subsidiary;
(7) secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 4.09 and 4.12 hereof that limits the right of the
debtor to dispose of the assets securing such Indebtedness;
(8) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course
of business;
(9) other Indebtedness of Restricted Subsidiaries that are
Guarantors which Indebtedness is permitted to be incurred pursuant to an
agreement entered into subsequent to the Issue Date in accordance with
Section 4.09 hereof;
(10) customary provisions in joint venture agreements and
other similar agreements entered into in the ordinary course of business,
including, without limitation, provisions limiting the disposition or
distribution of assets or property; provided that such limitations are
applicable only to the assets or property that are the subject of such
joint venture agreements and are owned by such joint venture;
(11) customary provisions restricting dispositions of real
property interests set forth in any reciprocal easement agreements of VHS
Holdco II or any Restricted Subsidiary;
(12) customary provisions contained in licenses of
intellectual property and other similar agreements entered into in the
ordinary course of business;
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(13) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest;
(14) customary provisions restricting assignment of any
agreement entered into in the ordinary course of business;
(15) contracts entered into in the ordinary course of
business, not related to any Indebtedness, and that do not, individually
or in the aggregate, detract from the value of property or assets of VHS
Holdco II or any Restricted Subsidiary in any manner material to VHS
Holdco II or any Restricted Subsidiary;
(16) any encumbrances or restrictions of the type referred to
in Sections 4.08(a) (1), (2) and (3) imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in Sections 4.08(b) (1), (2) and (5); provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment
of the Board of Directors of VHS Holdco II, not materially more
restrictive with respect to such dividend and other payment restrictions
than those contained in the dividend or other payment restrictions prior
to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing; or
(17) any encumbrance or restriction of a Securitization
Subsidiary effected in connection with a Qualified Securitization
Financing; provided that such restrictions apply only to such
Securitization Subsidiary.
Section 4.09 Incurrence of Additional Indebtedness and Issuance of
Preferred Stock(a) . (a) VHS Holdco II will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and VHS Holdco II will not permit any of
its Restricted Subsidiaries to issue any shares of Preferred Stock; provided,
that VHS Holdco II and any Restricted Subsidiary may incur Indebtedness
(including Acquired Debt), and any Restricted Subsidiary may issue Preferred
Stock if the Fixed Charge Coverage Ratio for VHS Holdco II's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Preferred Stock is issued would have been at least 2.00 to 1.00,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
preferred equity had been issued, as the case may be, and the application of
proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the
incurrence of any of the following (collectively, "Permitted Debt"):
(1) Indebtedness under the Credit Agreement together with the
incurrence of the guarantees thereunder and the issuance and creation of
letters of credit and bankers' acceptances thereunder (with letters of
credit and bankers' acceptances
75
being deemed to have a principal amount equal to the face amount thereof),
up to an aggregate principal amount of $1,025.0 million outstanding at any
one time plus the amount available on the Issue Date under the Delayed
Draw Term Loan Portions of the Credit Agreement, less the amount of all
permanent reductions of Indebtedness thereunder as a result of principal
payments actually made with Net Proceeds from Asset Sales; provided,
however, that such amount shall be reduced to the extent of any amount
available on the Issue Date and not subsequently drawn within the time
periods provided therefor under the Delayed Draw Term Loan Portions of the
Credit Agreement;
(2) Indebtedness represented by the Existing Vanguard Senior
Subordinated Notes after giving effect to the consummation of the Offer
(including any guarantee thereof existing on the Issue Date);
(3) Indebtedness represented by the Senior Subordinated Notes
and the Guarantees and the Senior Subordinated Notes and related
Guarantees to be issued in exchange thereof pursuant to the Senior
Subordinated Registration Rights Agreement;
(4) Existing Indebtedness (other than Indebtedness described
in Sections 4.09(b) (1), (2) and (3));
(5) Indebtedness (including Capitalized Lease Obligations)
incurred or issued by VHS Holdco II or any Restricted Subsidiary to
finance the purchase, lease or improvement of property (real or personal)
or equipment that is used by or useful to VHS Holdco II or any Restricted
Subsidiary in a Permitted Business (whether through the direct purchase of
assets or the Capital Stock of any Person owning such assets) in an
aggregate principal amount that, when aggregated with the principal amount
of all other Indebtedness then outstanding and incurred pursuant to this
clause (5) of Section 4.09(b), does not exceed the greater of $60.0
million and 3.0% of Total Assets;
(6) Indebtedness incurred by VHS Holdco II or any Restricted
Subsidiary constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims,
health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance or other Indebtedness with respect
to reimbursement-type obligations regarding workers' compensation claims;
(7) Indebtedness arising from agreements of VHS Holdco II or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or assumed
in connection with the disposition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary for
the purpose of financing such acquisition; provided that (A) such
Indebtedness is not reflected on the balance sheet (other than by
application of FIN 45 as a result of an amendment to an obligation in
existence on the Issue Date) of VHS Holdco II or any Restricted Subsidiary
(contingent obligations referred to in a footnote to financial statements
and not otherwise reflected on the balance sheet will not be deemed to be
reflected on such balance sheet for purposes of this clause (A) of Section
4.09(b)(7)) and
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(B) the maximum assumable liability in respect of all such Indebtedness
shall at no time exceed the gross proceeds including non-cash proceeds
(the fair market value of such non-cash proceeds being measured at the
time received and without giving effect to any subsequent changes in
value) actually received by VHS Holdco II and any Restricted Subsidiaries
in connection with such disposition;
(8) Indebtedness of VHS Holdco II owed to and held by any
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to
and held by VHS Holdco II or any Restricted Subsidiary; provided that (A)
any subsequent issuance or transfer of any Capital Stock or any other
event that results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of any such Indebtedness
(except to VHS Holdco II or a Restricted Subsidiary) shall be deemed, in
each case, to constitute the incurrence of such Indebtedness by the issuer
thereof and (B) if either of the Issuers or any Guarantor is the obligor
on such Indebtedness owing to a Restricted Subsidiary that is not a
Guarantor, other than Indebtedness represented by short-term, open account
working capital notes entered into in the ordinary course of business for
cash management purposes and consistent with past practice, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all obligations of such Issuer with respect to the Senior
Subordinated Notes or of such Guarantor with respect to its Guarantee;
(9) shares of Preferred Stock of a Restricted Subsidiary
issued to VHS Holdco II or a Restricted Subsidiary; provided that any
subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such shares of
Preferred Stock (except to VHS Holdco II or a Restricted Subsidiary) shall
be deemed in each case to be an issuance of such shares of Preferred
Stock;
(10) Hedging Obligations of VHS Holdco II or any Restricted
Subsidiary (excluding Hedging Obligations entered into for speculative
purposes) for the purpose of limiting (A) interest rate risk with respect
to any Indebtedness that is permitted by the terms of the Senior
Subordinated Indenture to be outstanding or (B) exchange rate risk with
respect to any currency exchange or (C) commodity risk;
(11) obligations in respect of performance, bid, appeal and
surety bonds and performance and completion guarantees provided by VHS
Holdco II or any Restricted Subsidiary or obligations in respect of
letters of credit related thereto, in each case in the ordinary course of
business or consistent with past practice;
(12) Preferred Stock that is not Disqualified Stock and is
issued by a Restricted Subsidiary of VHS Holdco II to a Person holding a
minority Equity Interest in such Restricted Subsidiary (after giving
effect to such issuance); provided that such Preferred Stock is not
exchangeable or convertible into Indebtedness of VHS Holdco II or any of
its Restricted Subsidiaries and does not require any cash payment of
dividends or distributions at any time that such cash payment would result
in a Default or an Event of Default; provided, further, that the aggregate
liquidation preference of all Preferred
77
Stock issued pursuant to this clause (12) of Section 4.09(b) shall not
exceed $10.0 million;
(13) Indebtedness of VHS Holdco II or any Restricted
Subsidiary or Preferred Stock of any Restricted Subsidiary not otherwise
permitted hereunder in an aggregate principal amount or liquidation
preference which, when aggregated with the principal amount and
liquidation preference of all other Indebtedness and Preferred Stock then
outstanding and incurred pursuant to this clause (13) of Section 4.09(b),
does not at any one time outstanding exceed $75.0 million (it being
understood that (x) any Indebtedness pursuant to this clause (13) of
Section 4.09(b) may, but need not, be incurred in whole or in part under
the Credit Agreement and (y) any Indebtedness or Preferred Stock incurred
pursuant to this clause (13) of Section 4.09(b) shall cease to be deemed
incurred or outstanding for purposes of this clause (13) of Section
4.09(b) but shall be deemed incurred for the purposes of the first
paragraph of this covenant from and after the first date on which VHS
Holdco II or such Restricted Subsidiary could have incurred such
Indebtedness or Preferred Stock under the first paragraph of this covenant
without reliance on this clause (13) of Section 4.09(b));
(14) any guarantee by either of the Issuers or a Guarantor of
Indebtedness or other obligations of VHS Holdco II or any Restricted
Subsidiary so long as the incurrence of such Indebtedness by VHS Holdco II
or such Restricted Subsidiary is permitted under the terms of the Senior
Subordinated Indenture; provided that if such Indebtedness is by its
express terms subordinated in right of payment to the Senior Subordinated
Notes or a Guarantee, as applicable, any such guarantee with respect to
such Indebtedness shall be subordinated in right of payment to the Senior
Subordinated Notes or such Guarantee with respect to the Senior
Subordinated Notes substantially to the same extent as such Indebtedness
is subordinated to the Senior Subordinated Notes or such Guarantee, as
applicable;
(15) the incurrence by VHS Holdco II or any Restricted
Subsidiary of Indebtedness or Preferred Stock that serves to refund or
refinance any Indebtedness incurred as permitted under Section 4.09(a)
hereof and clauses (2), (3) and (4) of Section 4.09(b) hereof, this clause
(15) and clause (16) of Section 4.09(b) hereof or any Indebtedness issued
to so refund or refinance such Indebtedness including additional
Indebtedness incurred to pay premiums and fees in connection therewith
(the "Refinancing Indebtedness") prior to its respective maturity;
provided that such Refinancing Indebtedness (A) has a Weighted Average
Life to Maturity at the time such Refinancing Indebtedness is incurred
which is not less than the remaining Weighted Average Life to Maturity of
the Indebtedness being refunded or refinanced, (B) to the extent such
Refinancing Indebtedness refinances Indebtedness subordinated or pari
passu to the Senior Subordinated Notes, such Refinancing Indebtedness is
subordinated or pari passu to the Senior Subordinated Notes at least to
the same extent as the Indebtedness being refinanced or refunded, (C)
shall not include (x) Indebtedness or Preferred Stock of a Restricted
Subsidiary that is not the Subordinated Notes Co-Issuer or a Guarantor
that refinances Indebtedness or Preferred Stock of either Issuer or a
Guarantor or (y) Indebtedness or Preferred Stock of VHS Holdco II or a
Restricted Subsidiary that refinances Indebtedness or Preferred Stock of
an Unrestricted Subsidiary, (D) shall not be
78
in a principal amount in excess of the principal amount of, premium, if
any, accrued interest on, and related fees and expenses of, the
Indebtedness being refunded or refinanced and (E) shall not have a stated
maturity date prior to the Stated Maturity of the Indebtedness being
refunded or refinanced; and provided, further, that subclauses (A), (B)
and (E) of this clause (15) of Section 4.09(b) will not apply to any
refunding or refinancing of any Senior Debt;
(16) Indebtedness or Preferred Stock of Persons that are
acquired by VHS Holdco II or any Restricted Subsidiary or merged into VHS
Holdco II or a Restricted Subsidiary in accordance with the terms of the
Senior Subordinated Indenture; provided that such Indebtedness or
Preferred Stock is not incurred in connection with or in contemplation of
such acquisition or merger; and provided, further, that after giving
effect to such acquisition or merger, either (A) VHS Holdco II or such
Restricted Subsidiary would be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in the first paragraph of this covenant or (B) the Fixed Charge
Coverage Ratio would be greater than immediately prior to such
acquisition;
(17) Indebtedness arising from the honoring by a bank or
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided
that such Indebtedness, other than credit or purchase cards, is
extinguished within five business days of its incurrence;
(18) Indebtedness of VHS Holdco II or any Restricted
Subsidiary supported by a letter of credit issued pursuant to the Credit
Agreement in a principal amount not in excess of the stated amount of such
letter of credit;
(19) Contribution Indebtedness;
(20) Indebtedness consisting of the financing of insurance
premiums;
(21) Indebtedness incurred on behalf of or representing
Guarantees of Indebtedness of joint ventures of VHS Holdco II or any
Restricted Subsidiary not in excess of $25.0 million at any time
outstanding;
(22) Indebtedness incurred by a Securitization Subsidiary in a
Qualified Securitization Financing that is not recourse to VHS Holdco II
or any Restricted Subsidiary other than a Securitization Subsidiary
(except for Standard Securitization Undertakings);
(23) Physician Support Obligations incurred by VHS Holdco II
or any Restricted Subsidiary; and
(24) all premium (if any), interest (including post-petition
interest), fees, expenses, charges and additional or contingent interest
on obligations described in clauses (1) through (23) of Section 4.09(b)
hereof.
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For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more
than one of the categories of Permitted Debt described in clauses (1)
through (24) of Section 4.09(b) hereof, or is entitled to be incurred
pursuant to Section 4.09(a) hereof, VHS Holdco II will be permitted to
classify and later reclassify such item of Indebtedness in any manner that
complies with this covenant, and such item of Indebtedness will be treated
as having been incurred pursuant to only one of such categories. Accrual
of interest, the accretion of accreted value and the payment of interest
in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section 4.09. Indebtedness
under the Credit Agreement outstanding on the date on which Senior
Subordinated Notes are first issued and authenticated under the Senior
Subordinated Indenture will be deemed to have been incurred on such date
in reliance on the exception provided by clause (1) of the definition of
Permitted Debt. The maximum amount of Indebtedness that VHS Holdco II and
its Restricted Subsidiaries may incur pursuant to this Section 4.09 shall
not be deemed to be exceeded, with respect to any outstanding
Indebtedness, solely as a result of fluctuations in the exchange rate of
currencies.
Section 4.10 Asset Sales. (a) VHS Holdco II will not, and will not
permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) VHS Holdco II (or such Restricted Subsidiary, as the case
may be) receives consideration at the time of the Asset Sale at least
equal to the fair market value (as determined in good faith by the
principal officer of VHS Holdco II or, in the case of assets and Equity
Interests having a value in excess of $10.0 million, by the Board of
Directors of VHS Holdco II) of the assets or Equity Interests issued or
sold or otherwise disposed of; and
(2) at least 75% of the consideration received in the Asset
Sale by VHS Holdco II or such Restricted Subsidiary is in the form of cash
or Cash Equivalents. For the purposes of this provision and for no other
purpose, each of the following shall be deemed to be cash:
The amount of (A) any liabilities (as shown on VHS Holdco II's or
such Restricted Subsidiary's most recent balance sheet or in the notes thereto)
of VHS Holdco II or any Restricted Subsidiary (other than liabilities that are
by their terms subordinated to the Senior Subordinated Notes) that are assumed
by the transferee of any such assets and for which VHS Holdco II and all
Restricted Subsidiaries have been validly released by all creditors in writing;
(B) any securities received by VHS Holdco II or such Restricted
Subsidiary from such transferee that are converted by VHS Holdco II or such
Restricted Subsidiary into cash (to the extent of the cash received) within 180
days following the receipt thereof; and
(C) any Designated Non-cash Consideration received by VHS Holdco II
or any of its Restricted Subsidiaries in such Asset Sale having an aggregate
fair market value (as determined in good faith by VHS Holdco II), taken together
with all other Designated Non-cash Consideration received pursuant to this
clause (C) that is at that time outstanding, not to exceed the greater of (i)
$25.0 million and (ii) 1.0% of Total Assets at the time of the receipt of such
Designated Non-cash Consideration (with the fair market value of each item of
Designated Non-cash
80
Consideration being measured at the time received without giving effect to
subsequent changes in value).
Notwithstanding the foregoing, the 75% limitation referred to in
this clause (2) of Section 4.10(a) shall not apply to any Asset Sale in which
the amount of consideration of the type referred to this clause (2) of Section
4.10(a) received therefrom, determined in accordance with the foregoing
provision, is equal to or greater than what the after-tax proceeds would have
been had such Asset Sale complied with aforementioned 75% limitation.
(b) Within 365 days after the receipt of any Net Proceeds by VHS
Holdco II or any Restricted Subsidiary from an Asset Sale, VHS Holdco II or such
Restricted Subsidiary may apply those Net Proceeds at its option to:
(1) permanently reduce Obligations under Senior Debt of the
Issuers (including any obligations under the Credit Agreement) (and, in
the case of revolving Obligations thereunder, to correspondingly reduce
commitments with respect thereto) or Indebtedness of the Issuers or any
Subsidiary Guarantor that ranks pari passu with the Senior Subordinated
Notes or a Guarantee (provided that if the Issuers or a Guarantor shall so
reduce Obligations under such pari passu Indebtedness, it will equally and
ratably reduce Obligations under the Senior Subordinated Notes by making
an offer (in accordance with the procedures set forth below for an Asset
Sale Offer) to all Holders of Senior Subordinated Notes to purchase at a
purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest and Additional Interest, if any, the pro rata
principal amount of Senior Subordinated Notes) or Indebtedness of a
Restricted Subsidiary that is not a Guarantor, in each case other than
Indebtedness owed to either of the Issuers or an Affiliate of the Issuers
(provided that in the case of any reduction of any revolving obligations,
the Issuers or such Restricted Subsidiary shall effect a corresponding
reduction of commitments with respect thereto);
(2) make an investment in (A) any one or more businesses;
provided that such investment in any business is in the form of the
acquisition of Capital Stock and results in VHS Holdco II or a Restricted
Subsidiary owning an amount of the Capital Stock of such business such
that it constitutes a Restricted Subsidiary, (B) capital expenditures or
(C) other assets, in each of (A), (B) and (C), used or useful in a
Permitted Business; and/or
(3) make an investment in (A) any one or more businesses;
provided that such investment in any business is in the form of the
acquisition of Capital Stock and it results in VHS Holdco II or a
Restricted Subsidiary owning an amount of the Capital Stock of such
business such that it constitutes a Restricted Subsidiary, (B) properties
or (C) assets that, in each of (A), (B) and (C), replace the businesses,
properties and assets that are the subject of such Asset Sale;
provided that the 365-day period provided above to apply any portion of Net
Proceeds in accordance with clause (2) or (3) of this Section 4.10(b) shall be
extended by an additional 180 days if by not later than the 365th day after
receipt of such Net Proceeds, VHS Holdco II or a Restricted Subsidiary, as
applicable, has entered into a bona fide binding commitment with a
81
Person other than an Affiliate of the Issuers to make an investment of the type
referred to in either such clause in the amount of such Net Proceeds.
(c) When the aggregate amount of Net Proceeds not applied or
invested in accordance with the preceding paragraph ("Excess Proceeds") exceeds
$20.0 million, the Issuers will make an Asset Sale Offer to all holders of
Senior Subordinated Notes to purchase on a pro rata basis the maximum principal
amount of Senior Subordinated Notes that may be purchased out of the Excess
Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of
principal amount plus accrued and unpaid interest and Additional Interest, if
any, to the date of purchase, and will be payable in cash.
(d) Pending the final application of any Net Proceeds, VHS Holdco II
or such Restricted Subsidiary may temporarily reduce revolving credit borrowings
or otherwise invest the Net Proceeds in any manner that is not prohibited by the
Senior Subordinated Indenture.
(e) If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Issuers may use those Excess Proceeds for any purpose not
otherwise prohibited by the Senior Subordinated Indenture. If the aggregate
principal amount of Senior Subordinated Notes tendered into such Asset Sale
Offer exceeds the amount of Excess Proceeds, the Trustee will select the Senior
Subordinated Notes to be purchased on a pro rata basis. Upon completion of each
Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
(f) The Issuers will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of Senior Subordinated Notes pursuant to an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the Asset Sale provisions of this Senior Subordinated Indenture, the Issuers
will comply with the applicable securities laws and regulations and will not be
deemed to have breached their obligations under the Asset Sale provisions of the
Senior Subordinated Indenture by virtue of such conflict.
Section 4.11 Transactions with Affiliates. (a) VHS Holdco II will
not, and will not permit any of its Restricted Subsidiaries to, make any payment
to, or sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make or
amend any transaction, contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate
Transaction"), involving aggregate consideration in excess of $5.0 million,
unless:
(1) the Affiliate Transaction is on terms that are not
materially less favorable, taken as a whole, to VHS Holdco II or the
relevant Restricted Subsidiary than those that would have been obtained in
a comparable transaction by VHS Holdco II or such Restricted Subsidiary
with an unrelated Person on an arms length basis; and
(2) VHS Holdco II delivers to the Trustee, with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, a resolution
of the Board of Directors of VHS Holdco II set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with
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this Section 4.11 and that such Affiliate Transaction has been approved by
a majority of the disinterested members, if any, of the Board of Directors
of VHS Holdco II.
(b) The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a) hereof:
(1) transactions between or among VHS Holdco II and/or any
Restricted Subsidiary or any entity that becomes a Restricted Subsidiary
as a result of such transaction;
(2) Restricted Payments and Permitted Investments permitted by
the Senior Subordinated Indenture;
(3) the payment to Sponsors of annual management, consulting,
monitoring and advisory fees in an aggregate amount in any fiscal year not
in excess of the greater of (A) $6.0 million and (B) 2.0% of EBITDA of VHS
Holdco II and its Restricted Subsidiaries for the immediately preceding
fiscal year, plus reasonable out-of-pocket costs and expenses in
connection therewith and unpaid amounts accrued for prior periods (but
after the Issue Date), and the execution of any management or monitoring
agreement subject to the same limitations;
(4) the payment of reasonable and customary fees paid to, and
indemnities provided on behalf of, officers, directors, employees or
consultants of VHS Holdco II, any Restricted Subsidiary or (to the extent
such person renders services to the businesses of VHS Holdco II and its
Subsidiaries) any of VHS Holdco II's direct or indirect parent entities;
(5) payments by VHS Holdco II or any Restricted Subsidiary to
the Sponsors and any of their Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of other
investment banking activities, including, without limitation, in
connection with acquisitions or divestitures, which payments are approved
by a majority of the members of the Board of Directors of VHS Holdco II in
good faith;
(6) transactions in which VHS Holdco II or any Restricted
Subsidiary delivers to the Trustee a letter from an Independent Financial
Advisor stating that such transaction is fair to VHS Holdco II or such
Restricted Subsidiary from a financial point of view;
(7) payments or loans (or cancellations of loans) to employees
or consultants of VHS Holdco II, any Restricted Subsidiary or (to the
extent such person renders services to the businesses of VHS Holdco II and
its Subsidiaries) any of VHS Holdco II's direct or indirect parent
entities, which are approved by a majority of the Board of Directors of
VHS Holdco II in good faith and which are otherwise permitted under the
Senior Subordinated Indenture;
(8) payments made or performance under any agreement as in
effect on the Issue Date (including, without limitation, each of the
agreements entered into in
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connection with the Transactions) or any amendment thereto (so long as any
such amendment is not less advantageous to the holders of the Senior
Subordinated Notes in any material respect than the original agreement as
in effect on the Issue Date);
(9) the existence of, or the performance by VHS Holdco II or
any of its Restricted Subsidiaries of its obligations under the terms of,
the LLC Agreement (including any registration rights agreement or purchase
agreements related thereto to which it is party on the Issue Date and any
similar agreement that it may enter into thereafter); provided that the
existence of, or the performance by VHS Holdco II or any of its Restricted
Subsidiaries of its obligations under any future amendment to the LLC
Agreement or under any similar agreement or amendment thereto entered into
after the Issue Date shall only be permitted by this clause (9) to the
extent that the terms of any such amendment or new agreement are not
otherwise disadvantageous to holders of the Senior Subordinated Notes in
any material respect;
(10) the Transactions and the payment of all fees and expenses
related to the Transactions, including any fees to the Sponsors
substantially on the terms described in the Offering Memorandum under the
captions "The Transactions" and "Certain Relationships and Related Party
Transactions";
(11) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the ordinary
course of business and otherwise in compliance with the terms of the
Senior Subordinated Indenture that are fair to VHS Holdco II and or the
Restricted Subsidiaries, in the reasonable determination of the members of
the Board of Directors of VHS Holdco II or the senior management thereof,
or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party;
(12) if otherwise permitted hereunder, the issuance of Equity
Interests (other than Disqualified Stock) of the Issuers to VHS Holdco I,
to any direct or indirect parent of VHS Holdco I, or to any Permitted
Holder;
(13) any transaction effected as part of a Qualified
Securitization Financing;
(14) any transaction with a Captive Insurance Subsidiary in
the ordinary course of operations of such Captive Insurance Subsidiary;
(15) any employment agreements entered into by VHS Holdco II
or any of the Restricted Subsidiaries in the ordinary course of business;
(16) transactions with joint ventures in Permitted Businesses
entered into in the ordinary course of business and in a manner consistent
with past practice; and
(17) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved
by the Board of Directors of VHS Holdco II.
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Section 4.12 Liens. (a) VHS Holdco II will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume or suffer to exist any Lien that secures obligations under any
Subordinated Indebtedness or Indebtedness ranking pari passu with the Senior
Subordinated Notes or a related Guarantee on any asset or property of VHS Holdco
II or any Restricted Subsidiary, or any income or profits therefrom, or assign
or convey any right to receive income therefrom, unless:
(1) in the case of Liens securing Subordinated Indebtedness,
the Senior Subordinated Notes and any applicable Guarantees are secured by
a Lien on such property, assets or proceeds that is senior in priority to
such Liens; or
(2) in all other cases, the Senior Subordinated Notes or the
applicable Guarantee or Guarantees are equally and ratably secured,
(b) The provisions of Section 4.12(a) shall not apply to:
(1) Liens existing on the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date;
(2) Liens securing the Senior Subordinated Notes and the
related Guarantees, Liens securing Senior Debt of the Issuers or any
Guarantor and any related guarantees of such Senior Debt; and
(3) Permitted Liens.
Section 4.13 Conduct of Business. VHS Holdco II will not, and will
not permit any Restricted Subsidiary (other than a Securitization Subsidiary)
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to VHS Holdco II and its Subsidiaries taken as a
whole.
Section 4.14 Offer to Repurchase Upon Change of Control. (a) Upon
the occurrence of a Change of Control, the Issuers will make an offer (a "Change
of Control Offer") to each Holder of the Senior Subordinated Notes to repurchase
all or any part (equal to $1,000 or an integral multiple of $1,000) of that
Holder's Senior Subordinated Notes repurchased at a purchase price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Additional Interest, if any, on the Senior Subordinated Notes
repurchased to, but not including, the date of purchase, subject to the rights
of Holders on the relevant record date to receive interest due on the relevant
interest payment date (the "Change of Control Payment"). Within 30 days
following any Change of Control, except to the extent that the Issuers have
exercised their right to redeem the Senior Subordinated Notes in accordance with
Article 3 of this Senior Subordinated Indenture, the Issuers will mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and stating:
(1) that the Change of Control is being made pursuant to this
Section 4.14 and that all Senior Subordinated Notes properly tendered
pursuant to such Change of Control Offer will be accepted for payment;
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(2) the purchase price and the purchase date, which shall be
no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Senior Subordinated Note not tendered will
continue to accrue interest;
(4) that, unless the Issuers default in the payment of the
Change of Control Payment, all Senior Subordinated Notes accepted for
payment pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have any Senior Subordinated
Notes purchased pursuant to a Change of Control Offer will be required to
surrender the Senior Subordinated Notes completed, or transfer by book
entry transfer, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on the
second Business day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Senior Subordinated Notes delivered
for purchase , and a statement that such Holder is withdrawing his
election to have the Senior Subordinated Notes purchased;
(7) that Holders whose Senior Subordinated Notes are being
purchased only in part will be issued new Senior Subordinated Notes equal
in principal amount or an integral multiple thereof.
The Issuers will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with the repurchase of the
Senior Subordinated Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.14, the Issuers will comply with the applicable securities laws and
regulations and will not be deemed to have breached their obligations under this
Section 4.14 by virtue of such conflict.
(b) On the Change of Control Payment Date, the Issuers will, to the
extent lawful:
(1) accept for payment all Senior Subordinated Notes or
portions of Senior Subordinated Notes properly tendered pursuant to the
Change of Control Offer;
(2) deposit with the paying agent an amount equal to the
Change of Control Payment in respect of all Senior Subordinated Notes or
portions of Senior Subordinated Notes properly tendered; and
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(3) deliver or cause to be delivered to the Trustee the Senior
Subordinated Notes properly accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Subordinated
Notes or portions of Senior Subordinated Notes being purchased by the
Issuers.
The paying agent will promptly mail to each Holder of Senior
Subordinated Notes properly tendered the Change of Control Payment for such
Senior Subordinated Notes, and the Trustee will promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Senior
Subordinated Note equal in principal amount to any unpurchased portion of the
Senior Subordinated Notes surrendered, if any; provided that each new Senior
Subordinated Note will be in a principal amount of $1,000 or an integral
multiple of $1,000 in excess thereof.
(c) Prior to complying with any provisions of this covenant, but in
any event within 90 days following any Change of Control, the Issuers covenant
to:
(1) repay in full in cash or Cash Equivalents all Obligations,
and terminate all commitments, under the Credit Agreement and all other
Senior Debt the terms of which require repayment upon a Change of Control
or offer to repay in full in cash or Cash Equivalents all Obligations, and
terminate all commitments, under the Credit Agreement and all other such
Senior Debt and to repay in full in cash of Cash Equivalents the
Obligations owed to (and terminate the commitments of) each lender that
has accepted such offer; or
(2) obtain the requisite consents under the Credit Agreement
and all other such Senior Debt to permit the repurchase of the Senior
Subordinated Notes as provided above.
The Issuers will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(d) Notwithstanding anything to the contrary in this Section 4.14,
the Issuers will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.14 applicable to a Change of Control Offer made by the Issuers and
purchases all Senior Subordinated Notes properly tendered and not withdrawn
under the Change of Control Offer. A Change of Control Offer may be made in
advance of a Change of Control if a definitive agreement is in place for the
Change of Control at the time of the making of the Change of Control Offer, and
such Change of Control Offer is otherwise made in compliance with the provisions
of this Section 4.14.
Section 4.15 Payments for Consent. VHS Holdco II will not, and will
not permit any of its Subsidiaries to, directly or indirectly, pay or cause to
be paid any consideration to or for the benefit of any Holder of Senior
Subordinated Notes for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Senior Subordinated Indenture or the
Senior Subordinated Notes unless such consideration is offered to be paid and is
paid to all Holders of the Senior Subordinated Notes that consent, waive or
agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
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Section 4.16 Additional Subsidiary Guarantees. Upon the occurrence
of the guarantee by any Restricted Subsidiary of the obligations of any borrower
under the Credit Agreement, VHS Holdco II will cause each such Restricted
Subsidiary (other than a Securitization Subsidiary) to execute a Guarantee
satisfactory in form and substance to the Trustee (and with such documentation
relating thereto as the Trustee may require, including, without limitation,
opinions of counsel as to the enforceability of such guarantee), pursuant to
which such Restricted Subsidiary will become a Guarantor; provided that the
guarantee provided by such Restricted Subsidiary in respect of the Credit
Agreement shall be senior to its Guarantee pursuant to subordination provisions
substantially as contained in this Senior Subordinated Indenture. The form of
such supplemental indenture is attached as Exhibit E hereto.
Section 4.17 Intentionally Omitted.
Section 4.18 Limitation on Layering. (a) Each of the Issuers and,
for so long as it is a Guarantor, VHS Holdco I will not, and VHS Holdco II will
not permit the Subordinated Notes Co-Issuer or any Restricted Subsidiary that is
a Guarantor to, directly or indirectly, incur any Indebtedness that is or
purports to be by its terms (or by the terms of any agreement governing such
Indebtedness) contractually subordinated or junior in right of payment to any
Senior Debt (including Acquired Debt) of either Issuer or such Guarantor, as the
case may be, unless such Indebtedness is either
(1) pari passu in right of payment with the Senior
Subordinated Notes or such Guarantor's Guarantee (as applicable); or
(2) subordinate in right of payment to the Senior Subordinated
Notes or such Guarantor's Guarantee (as applicable).
(b) For the purposes of Section 4.18(a), unsecured Indebtedness is
not deemed to be subordinate or junior to secured Indebtedness merely because it
is unsecured or because the secured Indebtedness receives priority in respect of
asset sales, cash flows or other prepayments, and secured Indebtedness will not
be deemed subordinated or junior to any other secured Indebtedness merely
because it has a junior priority with respect to the same collateral or with
respect to asset sales, cash flows or other prepayments.
Section 4.19 Existence of Corporate Co-Issuer. VHS Holdco II will
always maintain a Wholly-Owned Subsidiary that is a Restricted Subsidiary of VHS
Holdco II organized as a corporation under the laws of the United States of
America, any State thereof or the District of Columbia that will serve as a
co-issuer of the Senior Subordinated Notes unless VHS Holdco II is itself a
corporation under the laws of the United States of America, any State thereof or
the District of Columbia.
ARTICLE V
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of All or Substantially
All Assets of the Issuers. Neither Issuer may, directly or indirectly: (a)
consolidate or merge with or into or
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wind up into another Person (whether or not such Issuer is the surviving
corporation); or (b) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of its properties or assets, in one or more related
transactions, to another Person; unless:
(1) either: (A) such Issuer is the surviving corporation; or
(B) the Person formed by or surviving any such
consolidation or merger (if other than such Issuer) or to which such
sale, assignment, transfer, conveyance or other disposition has been
made is a Person organized or existing under the laws of the
jurisdiction of organization of such Issuer or the United States,
any state of the United States or the District of Columbia (such
Issuer or such Person, as the case may be, hereinafter referred to
as the "Successor Company");
(2) the Successor Company (if other than such Issuer)
expressly assumes all the obligations of such Issuer under the Senior
Subordinated Notes, this Senior Subordinated Indenture and the Senior
Subordinated Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee; provided that at all times, a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia must be a co-issuer
or the issuer of the Senior Subordinated Notes;
(3) immediately after such transaction no Default or Event of
Default exists;
(4) after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period, either (A) (A) the Successor Company (if
other than such Issuer), would have been permitted to incur at least $1.00
of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09(a) hereof determined on a pro forma basis
(including pro forma application of the net proceeds therefrom), as if
such transaction had occurred at the beginning of such four-quarter
period, or
(B) the Fixed Charge Coverage Ratio for the Successor
Company and its Restricted Subsidiaries would be greater than such
ratio for VHS Holdco II and its Restricted Subsidiaries immediately
prior to such transaction;
(5) each Guarantor, unless it is the other party to the
transactions described above, in which case clause (2) of this Section
5.01 shall apply, shall have confirmed in writing that its Guarantee shall
apply to such Person's obligations under the Senior Subordinated Notes,
the Senior Subordinated Indenture and the Senior Subordinated Registration
Rights Agreement; and
(6) such Issuer shall have delivered to the Trustee a
certificate from a Responsible Officer and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such amendment or
supplement (if any) comply with the Senior Subordinated Indenture.
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Section 5.02 Successor Corporation Substituted. The Successor
Company will succeed to, and be substituted for, such Issuer under the Senior
Subordinated Indenture and the Senior Subordinated Notes. Notwithstanding the
provisions of clauses (3) and (4) of Section 5.01 hereof, (a) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to VHS Holdco II or to another Restricted Subsidiary and
(b) either Issuer may merge with an Affiliate incorporated solely for the
purpose of reincorporating such Issuer in another state of the United States, so
long as the amount of Indebtedness of VHS Holdco II and its Restricted
Subsidiaries is not increased thereby.
If a direct or indirect parent organized or existing under the laws
of the United States, any state of the United States or the District of Columbia
("Parent") of VHS Holdco II assumes the obligations under the Senior
Subordinated Indenture in a transaction which meets the requirements of Section
5.01 hereof, treating Parent as the Successor Company for purposes of such
covenant, all obligations of VHS Holdco II under the Senior Subordinated
Indenture shall be discharged except to the extent that VHS Holdco II is or
becomes a Subsidiary, Restricted Subsidiary or Subsidiary Guarantor of the
Senior Subordinated Notes. In such event, Parent will succeed to, and be
substituted for, VHS Holdco II under the Senior Subordinated Indenture and the
Senior Subordinated Notes.
Section 5.03 Merger, Consolidation or Sale of All or Substantially
All Assets by a Guarantor. Subject to the provisions described in Sections 12.02
and 12.03 hereof, no Guarantor (other than Vanguard) shall consolidate or merge
with or into or wind up into (whether or not such Guarantor is the surviving
corporation), or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets in one or more related
transactions to, any Person, unless:
(1) such Guarantor is the surviving Person or the Person
formed by or surviving any such consolidation or merger (if other than
such Guarantor) or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made is a Person organized
or existing under the laws of the United States, any state thereof or the
District of Columbia (such Guarantor or such Person, as the case may be,
being herein called the "Successor Guarantor");
(2) the Successor Guarantor (if other than such Guarantor)
expressly assumes all the obligations of such Guarantor under the Senior
Subordinated Indenture pursuant to supplemental indentures or other
documents or instruments in form reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of
Default exists; and
(4) the Issuers shall have delivered to the Trustee a
certificate from a Responsible Officer and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such amendment or
supplement (if any) comply with this Agreement.
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Section 5.04 Successor Guarantor Substituted(a) . (a) The Successor
Guarantor will succeed to, and be substituted for, such Guarantor under the
Senior Subordinated Indenture and this Senior Subordinated Registration Rights
Agreement.
(b) Notwithstanding the foregoing, (1) (1) a Guarantor may merge
with an Affiliate incorporated solely for the purpose of reincorporating such
Guarantor in another state of the United States or the District of Columbia, so
long as the amount of Indebtedness of the Guarantor is not increased thereby,
and
(2) any Subsidiary Guarantor may merge into or transfer
all or part of its properties and assets to either of the Issuers or
another Subsidiary Guarantor.
(c) Notwithstanding anything to the contrary herein, except as
expressly permitted under the Senior Subordinated Indenture no Guarantor shall
be permitted to consolidate with, merge into or transfer all or part of its
properties and assets to VHS Holdco I or Vanguard.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. An "Event of Default" is defined as
any of the following:
(1) the Issuers default in payment when due and payable, upon
redemption, acceleration or otherwise, of principal of, or premium, if
any, on the Senior Subordinated Notes issued hereunder, whether or not
prohibited by the subordination provisions of Article X;
(2) the Issuers default in the payment when due of interest or
Additional Interest, if any, on or with respect to the Senior Subordinated
Notes issued hereunder and such default continues for a period of 30 days,
and, whether or not prohibited by the subordination provisions of Article
X;
(3) either of the Issuers defaults in the performance of, or
breaches any covenant, warranty or other agreement contained in this
Senior Subordinated Indenture (other than a default in the performance or
breach of a covenant, warranty or agreement which is specifically dealt
with in clauses (1) or (2) above) and such default or breach continues for
a period of 60 days after written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the holders
of 25% or more in aggregate principal amount of the Senior Subordinated
Notes then outstanding voting as a single class;
(4) either of the Issuers or any Significant Subsidiary
defaults under any mortgage, indenture or instrument under which there is
issued or by which there is secured or evidenced any Indebtedness for
money borrowed by VHS Holdco II or any
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Restricted Subsidiary or the payment of which is guaranteed by VHS Holdco
II or any Restricted Subsidiary (other than Indebtedness owed to VHS
Holdco II or a Restricted Subsidiary), whether such Indebtedness or
guarantee now exists or is created after the Issue Date, if (A) such
default either (i) results from the failure to pay any such Indebtedness
at its Stated Maturity (after giving effect to any applicable grace
periods) or (ii) relates to an obligation other than the obligation to pay
principal of any such Indebtedness at its Stated Maturity and results in
the Holder or holders of such Indebtedness causing such Indebtedness to
become due prior to its Stated Maturity and (B) the principal amount of
such Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at Stated Maturity
(after giving effect to any applicable grace periods), or the maturity of
which has been so accelerated, aggregate $20.0 million or more at any one
time outstanding;
(5) either of the Issuers or any Significant Subsidiary fails
to pay final judgments (other than any judgments covered by insurance
policies issued by reputable and creditworthy insurance companies)
aggregating in excess of $20.0 million, which final judgments remain
unpaid, undischarged and unstayed for a period of more than 60 consecutive
days after such judgment becomes final, and an enforcement proceeding has
been commenced by any creditor upon such judgment or decree which is not
promptly stayed; or
(6) Either of the Issuers or any Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents too the appointment of a custodian of it or
for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors.
(7) a court of competent jurisdiction interest an order or
decree under Bankruptcy Law that:
(A) is for relief against either of the Issuers or any
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary in an
involuntary case;
(B) appoints a custodian of either of the Issuers or any
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary or for all
or substantially all of the property of either of the Issuers or any
of their Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary; or
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(C) orders the liquidation of either the Issuers or any
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary; and the
order of decree remains unstayed and in effect for 60 consecutive
days and
(8) the Guarantee of VHS Holdco I or any Guarantee of a
Significant Subsidiary fails to be in full force and effect (except as
contemplated by the terms thereof) or any Guarantor (other than Vanguard)
denies or disaffirms its obligations under its Guarantee and such Default
continues for 10 days.
Section 6.02 Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(6) or (7) above with respect to
either of the Issuers) shall occur and be continuing, the Trustee or the Holders
of at least 25% in principal amount of outstanding Senior Subordinated Notes
under the Senior Subordinated Indenture may declare the principal of and accrued
interest on such Senior Subordinated Notes to be due and payable by notice in
writing to the Issuers, the Trustee and the Representative under the Credit
Agreement specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), and the same shall become immediately
due and payable; provided that so long as any Indebtedness remains outstanding
under the Credit Agreement, no such acceleration shall be effective until the
earlier of (a) five business days after the giving of written notice of such
acceleration to the Issuers and the Representative under the Credit Agreement
(but only if such Event of Default is then continuing) and (b) the day on which
any Indebtedness under the Credit Agreement is accelerated.
Notwithstanding the foregoing, if an Event of Default specified in
Section 6.01(6) or (7) above with respect to either of the Issuers occurs and is
continuing, then all unpaid principal of, and premium, if any, and accrued and
unpaid interest on all of the outstanding Senior Subordinated Notes shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder of the Senior Subordinated Notes.
Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium and Additional Interest, if any, and interest on the
Senior Subordinated Notes or to enforce the performance of any provision of the
Senior Subordinated Notes or this Senior Subordinated Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Subordinated Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Senior
Subordinated Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
Section 6.04 Waiver of Past Defaults(a). (a) At any time after a
declaration of acceleration with respect to the Senior Subordinated Notes issued
under the Senior Subordinated Indenture as described in the preceding paragraph,
the holders of a majority in principal amount
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of the outstanding Senior Subordinated Notes issued under the Senior
Subordinated Indenture may rescind and cancel such declaration and its
consequences:
(1) if the rescission would not conflict with any judgment or
decree;
(2) if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due
solely because of the acceleration;
(3) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which
has become due otherwise than by such declaration of acceleration, has
been paid;
(4) if the Issuers have paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements
and advances; and
(5) in the event of the cure or waiver of an Event of Default
of the type described in Section 6.01(5), the Trustee shall have received
an Officers' Certificate and an opinion of counsel that such Event of
Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
The holders of a majority in principal amount of the Senior
Subordinated Notes issued under the Senior Subordinated Indenture may waive any
existing Default or Event of Default under the Senior Subordinated Indenture,
and its consequences, except a default in the payment of the principal of or
interest on such Senior Subordinated Notes.
(b) In the event of any Event of Default specified in clause (4) of
Section 6.01 hereof, such Event of Default and all consequences thereof
(excluding, however, any resulting payment default) will be annulled, waived and
rescinded, automatically and without any action by the Trustee or the holders of
the Senior Subordinated Notes, if within 20 days after such Event of Default
arose the Issuers deliver an Officers' Certificate to the Trustee stating that
(1) the Indebtedness or guarantee that is the basis for such Event of Default
has been discharged or (2) the holders thereof have rescinded or waived the
acceleration, notice or action (as the case may be) giving rise to such Event of
Default or (3) the default that is the basis for such Event of Default has been
cured, it being understood that in no event shall an acceleration of the
principal amount of the Senior Subordinated Notes as described above be
annulled, waived or rescinded upon the happening of any such events.
Section 6.05 Control by Majority. Holders of a majority in aggregate
principal amount of the then outstanding Senior Subordinated Notes have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Senior Subordinated Indenture that the Trustee determines may be
unduly prejudicial to the rights of other holders of Senior Subordinated Notes
or that may involve the Trustee in personal liability.
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Section 6.06 Limitation on Suits. A Holder may pursue a remedy with
respect to this Senior Subordinated Indenture or the Senior Subordinated Notes
only if:
(1) such Holder has previously given the Trustee written
notice that an Event of Default is continuing;
(2) Holders of at least 25% in aggregate principal amount of
the then outstanding Senior Subordinated Notes make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to
the Trustee security or indemnity reasonably satisfactory to the Trustee
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) during such 60-day period, Holders of a majority in
aggregate principal amount of the then outstanding Senior Subordinated
Notes do not give the Trustee a direction inconsistent with such request.
A Holder of a Senior Subordinated Note may not use this Senior
Subordinated Indenture to prejudice the rights of another Holder of a Senior
Subordinated Note or to obtain a preference or priority over another Holder of a
Senior Subordinated Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Senior Subordinated Indenture, the
right of any Holder of a Senior Subordinated Note to receive payment of
principal, premium and Additional Interest, if any, and interest on the Senior
Subordinated Note, on or after the respective due dates expressed in the Senior
Subordinated Note (including in connection with an offer to purchase), 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) hereof occurs and is continuing, the Trustee
is authorized to recover judgment in its own name and as trustee of an express
trust against the Issuers for the whole amount of principal of, premium and
Additional Interest, if any, and interest remaining unpaid on, the Senior
Subordinated Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Senior Subordinated
Notes allowed in any judicial proceedings relative to the Issuers (or any other
obligor upon the Senior Subordinated Notes), its creditors or its property and
shall be
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entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable and documented compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Notes or the rights
of any Holder, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
Section 6.10 Priorities. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Senior Subordinated Notes for amounts
due and unpaid on the Senior Subordinated Notes for principal, premium and
Additional Interest, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Senior Subordinated Notes for principal, premium and Additional Interest,
if any and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct in writing.
The Trustee may fix a record date and payment date for any payment
to holders of Senior Subordinated Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Senior Subordinated Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court
in its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable and documented attorneys' fees and
expenses against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a
Senior Subordinated Note pursuant to Section 6.07 hereof, or a suit by Holders
of more than 10% in aggregate principal amount of the then outstanding Senior
Subordinated Notes.
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ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee(a) . (a) If an Event of Default has
occurred and is continuing, the Trustee will exercise such of the rights and
powers vested in it by this Senior Subordinated Indenture, and use the same
degree of care and skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Senior Subordinated Indenture and the Trustee
need perform only those duties that are specifically set forth in this
Senior Subordinated Indenture and no others, and no implied covenants or
obligations shall be read into this Senior Subordinated 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 Senior
Subordinated Indenture. However, with respect to certificates or opinions
specifically required by any provision hereof to be furnished to it, the
Trustee will examine the certificates and opinions to determine whether or
not they conform to the requirements of this Senior Subordinated
Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Senior Subordinated Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Senior Subordinated Indenture will require
the Trustee to expend or risk its own funds or incur any liability.
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(f) The Trustee will not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02 Rights of Trustee. (a) The Trustee may conclusively
rely upon any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee will not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its own selection and the advice of such counsel or any Opinion of
Counsel will be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee will not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Senior Subordinated Indenture.
(e) Unless otherwise specifically provided in this Senior
Subordinated Indenture, any demand, request, direction or notice from the
Issuers will be sufficient if signed by an Officer of the Issuers.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Senior Subordinated Indenture at the
request, order or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security satisfactory to it
against any losses, liabilities or expenses.
(g) In no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
(h) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Issuers with respect to the
covenants contained in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 4.01, 6.01(1) or 6.01(2) or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
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(j) The Trustee may request that the Issuers 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 Senior
Subordinated 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.
(k) Delivery of reports, information and documents to the Trustee
under Section 4.03 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Issuers' compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Senior
Subordinated Notes and may otherwise deal with the Issuers or any Affiliate of
the Issuers with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer. The Trustee will not be
responsible for and makes no representation as to the validity or adequacy of
this Senior Subordinated Indenture or the Senior Subordinated Notes, it shall
not be accountable for the Issuers' use of the proceeds from the Senior
Subordinated Notes or any money paid to the Issuers or upon the Issuers'
direction under any provision of this Senior Subordinated Indenture, it will not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it will not be responsible for any statement
or recital herein or any statement in the Senior Subordinated Notes or any other
document in connection with the sale of the Senior Subordinated Notes or
pursuant to this Senior Subordinated Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee will
mail to Holders of Senior Subordinated Notes a notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of Default in payment of principal of, premium or Additional Interest, if any,
or interest on, any Senior Subordinated Note, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Senior Subordinated Notes.
Section 7.06 Reports by Trustee to Holders of the Notes(a) . (a)
Within 60 days after each May 15 beginning with the May 15 following the date of
this Senior Subordinated Indenture, and for so long as Senior Subordinated Notes
remain outstanding, the Trustee will mail to the Holders of the Senior
Subordinated Notes a brief report dated as of such reporting date that complies
with TIA Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted).
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The Trustee also will comply with TIA Section 313(b)(2). The Trustee will also
transmit by mail all reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders
of Senior Subordinated Notes will be mailed by the Trustee to the Issuers and
filed by the Trustee with the SEC and each stock exchange on which the Senior
Subordinated Notes are listed in accordance with TIA Section 313(d). The Issuers
will promptly notify the Trustee when the Senior Subordinated Notes are listed
on any stock exchange or delisted therefrom.
Section 7.07 Compensation and Indemnity(a) . (a) The Issuers will
pay to the Trustee from time to time reasonable compensation for its acceptance
of this Senior Subordinated Indenture and services hereunder. The Trustee's
compensation will not be limited by any law on compensation of a trustee of an
express trust. The Issuers will reimburse the Trustee promptly upon request for
all reasonable and documented disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable and documented compensation, disbursements and expenses
of the Trustee's agents and counsel.
(b) The Issuers and each Guarantor, jointly and severally, will
indemnify the Trustee against any and all losses, liabilities, claims, damages
or expenses incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Senior Subordinated Indenture,
including the reasonable and documented costs and expenses of enforcing this
Senior Subordinated Indenture against the Issuers and the Guarantors (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Issuers, the Guarantors, any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its own negligence, bad faith or willful misconduct. The Trustee
will notify the Issuers promptly of any claim of which a Responsible Officer has
received written notice for which it may seek indemnity. Failure by the Trustee
to so notify the Issuers will not relieve the Issuers or any of the Guarantors
of their obligations hereunder. The Issuers or such Guarantor will defend the
claim and the Trustee will cooperate in the defense. The Trustee may have
separate counsel and the Issuers and the Guarantors, as applicable, will pay the
reasonable and documented fees and expenses of such counsel provided, however,
that the Issuers and any Guarantor shall not be required to pay such fees and
expenses if it assumes such indemnified parties' defense and, in such
indemnified parties' reasonable judgment, there is no conflict of interest
between the Issuers and the Guarantors, as applicable, and such parties in
connection with such defense. Neither the Issuers nor any Guarantor need pay for
any settlement made without its consent, which consent will not be unreasonably
withheld.
(c) The obligations of the Issuers and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Senior
Subordinated Indenture.
(d) To secure the Issuers' and the Guarantors' payment obligations
in this Section 7.07, the Trustee will have a Lien prior to the Senior
Subordinated Notes on all money or property held or collected by the Trustee,
except that held in trust to pay principal and interest on particular Notes.
Such Lien will survive the satisfaction and discharge of this Senior
Subordinated Indenture.
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(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(7) or (8) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee(a) . (a) A resignation or
removal of the Trustee and appointment of a successor Trustee will become
effective only upon the successor Trustee's acceptance of appointment as
provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Issuers. The Holders of a
majority in aggregate principal amount of the then outstanding Senior
Subordinated Notes may remove the Trustee by so notifying the Trustee and the
Issuers in writing. The Issuers may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law; (3) a custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuers will promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Senior
Subordinated Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Issuers.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers,
or the Holders of at least 10% in principal amount of the then outstanding
Senior Subordinated Notes may petition, at the expense of the Issuers, any court
of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been
a Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition, at the expense of the Issuers, any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Senior Subordinated Indenture. The successor Trustee will mail a
notice of its succession to Holders. The retiring Trustee will promptly transfer
all property
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held by it as Trustee to the successor Trustee; provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification. There will at all times
be a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition.
This Senior Subordinated Indenture will always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is
subject to TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against the Issuers.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant
Defeasance. The Issuers may at any time, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior
Subordinated Notes and Senior Subordinated Note Guarantees upon compliance with
the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge. Upon the Issuers'
exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Issuers and each of the Guarantors will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Senior
Subordinated Notes (including the Senior Subordinated Note Guarantees) on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Issuers and the
Guarantors will be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Senior Subordinated Notes (including the Senior
Subordinated Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Senior Subordinated Indenture referred to in clauses (1) and
(2) below, and to have satisfied all their
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other obligations under such Senior Subordinated Notes, the Senior Subordinated
Note Guarantees and this Senior Subordinated Indenture (and the Trustee, on
demand of and at the expense of the Issuers, shall execute proper instruments
acknowledging the same), except for the following provisions which will survive
until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Senior Subordinated
Notes to receive payments in respect of the principal of, or interest or
premium and Additional Interest, if any, on, such Senior Subordinated
Notes when such payments are due from the trust referred to in Section
8.04 hereof;
(2) the Issuers' obligations with respect to such Senior
Subordinated Notes under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuers' and the Guarantors' obligations in
connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Issuers may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance. Upon the Issuers' exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Issuers
and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations
under the covenants contained in Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11,
4.12, 4.13, 4.14, 4.15, 4.16 and 4.18 and clauses (3) and (4) of Section 5.01
hereof with respect to the outstanding Senior Subordinated Notes on and after
the date the conditions set forth in Section 8.04 hereof are satisfied
(hereinafter, "Covenant Defeasance"), and the Senior Subordinated Notes will
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Senior Subordinated Notes will not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Senior Subordinated Notes and Senior Subordinated Note Guarantees,
the Issuers and the Guarantors may omit to comply with and will have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply will not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Senior
Subordinated Indenture and such Senior Subordinated Notes and Senior
Subordinated Note Guarantees will be unaffected thereby. In addition, upon the
Issuers' exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, Sections 6.01(3) through 6.01(5) hereof will not constitute Events
of Default.
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Section 8.04 Conditions to Legal or Covenant Defeasance. In order to
exercise either Legal Defeasance or Covenant Defeasance under either Section
8.02 or 8.03 hereof:
(1) the Issuers must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, or interest and
premium and Additional Interest, if any, on, the outstanding Senior
Subordinated Notes on the stated maturity thereof or on the applicable
redemption date, as the case may be, and the Issuers must specify whether
the Senior Subordinated Notes are being defeased to such stated maturity
or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the
Issuers must deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that:
(A) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling; or
(B) since the Issue Date, 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 reasonably
acceptable to the Trustee shall confirm that, the Holders of the
respective outstanding Senior Subordinated Notes will not recognize
income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.03 hereof, the
Issuers must deliver to the Trustee an Opinion of Counsel confirming that
the Holders of the respective outstanding Senior Subordinated Notes 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;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit and the grant of Liens in connection therewith) or insofar as
Events of Default (other than Events of Default resulting from the
borrowing of funds to be applied to such deposit and the granting of Liens
in connection therewith) resulting from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the
date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, the
Credit Agreement or any other material agreement or instrument (other than
this Senior Subordinated Indenture) to
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which VHS Holdco II or any of its Restricted Subsidiaries is a party or by
which VHS Holdco II or any of its Restricted Subsidiaries is bound;
(6) the Issuers must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the
intent of preferring the holders of Senior Subordinated Notes over the
other creditors of the Issuers with the intent of defeating, hindering,
delaying or defrauding any creditors of the Issuers or others; and
(7) the Issuers must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have
been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in
respect of the outstanding Senior Subordinated Notes will be held in trust and
applied by the Trustee, in accordance with the provisions of such Senior
Subordinated Notes and this Senior Subordinated Indenture, to the payment,
either directly or through any Paying Agent (including the Issuers acting as
Paying Agent) as the Trustee may determine, to the holders of such Senior
Subordinated Notes of all sums due and to become due thereon in respect of
principal, premium and Additional Interest, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Issuers will pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Senior
Subordinated Notes.
Notwithstanding anything in this Article 8 to the contrary, the
Trustee will deliver or pay to the Issuers from time to time upon the request of
the Issuers any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(1) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06 Repayment to Issuers. Any money deposited with the
Trustee or any Paying Agent, or then held by the Issuers, in trust for the
payment of the principal of, premium or Additional Interest, if any, or interest
on, any Senior Subordinated Note and remaining unclaimed for two years after
such principal, premium or Additional Interest, if any, or interest has become
due and payable shall be paid to the Issuers on their request or (if then held
by the Issuers) will be discharged from such trust; and the Holder of such
Senior Subordinated Note will thereafter be permitted to look only to the
Issuers for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all
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liability of the Issuers as trustee thereof, will thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Issuers causes to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which will not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Issuers.
Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. dollars or non-callable Government Securities in accordance
with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuers' and the Guarantors'
obligations under this Senior Subordinated Indenture and the Senior Subordinated
Notes and the Senior Subordinated Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Issuers make any payment of principal of, premium or
Additional Interest, if any, or interest on, any Senior Subordinated Note
following the reinstatement of its obligations, the Issuers will be subrogated
to the rights of the Holders of such Senior Subordinated Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes. Notwithstanding
Section 9.02 of this Senior Subordinated Indenture, the Issuers and the Trustee
may amend or supplement this Senior Subordinated Indenture or the Senior
Subordinated Notes or the Senior Subordinated Note Guarantees without the
consent of any Holder of Senior Subordinated Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Senior Subordinated Notes in
addition to or in place of certificated Senior Subordinated Notes;
(3) to provide for the assumption of either Issuer's
obligations to the Holders of the Senior Subordinated Notes by a successor
to the Issuers pursuant to Article 5;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Senior Subordinated Notes or that
does not adversely affect the legal rights hereunder of any Holder;
(5) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Senior Subordinated Indenture under
the TIA; or
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(6) to add a Guarantee with respect to the Senior Subordinated
Notes or to release the Guarantee of Vanguard.
Upon the request of the Issuers accompanied by a resolution of their
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Issuers in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Senior Subordinated Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Senior Subordinated Indenture or
otherwise.
Section 9.02 With Consent of Holders of Notes. (a) Except as
provided below in this Section 9.02, the Issuers and the Trustee may amend or
supplement this Senior Subordinated Indenture (including, without limitation,
Sections 4.10 and 4.14 hereof) and the Senior Subordinated Notes or the Senior
Subordinated Note Guarantees with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Senior
Subordinated Notes voting as a single class (including, without limitation,
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Senior Subordinated Notes), and, subject to Sections 6.04 and
6.07 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium or Additional
Interest, if any, or interest on, the Senior Subordinated Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Senior Subordinated Indenture or the
Senior Subordinated Notes or the Senior Subordinated Note Guarantees may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the then outstanding Senior Subordinated Notes (including, without
limitation, Additional Senior Subordinated Notes, if any) voting as a single
class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Senior Subordinated
Notes). Section 2.08 hereof shall determine which Senior Subordinated Notes are
considered to be "outstanding" for purposes of this Section 9.02.
(b) Upon the request of the Issuers accompanied by a resolution of
their Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Senior Subordinated
Notes as aforesaid, and upon receipt by the Trustee of the documents described
in Section 7.02 hereof, the Trustee will join with the Issuers in the execution
of such amended or supplemental indenture unless such amended or supplemental
indenture directly affects the Trustee's own rights, duties or immunities under
this Senior Subordinated Indenture or otherwise, in which case the Trustee may
in its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture.
(c) It is not be necessary for the consent of the Holders of Senior
Subordinated Notes under this Section 9.02 to approve the particular form of any
proposed amendment, supplement or waiver, but it is sufficient if such consent
approves the substance thereof.
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(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuers will mail to the Holders of Senior Subordinated
Notes affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Issuers to mail such notice, or any defect therein,
will not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Senior Subordinated
Notes then outstanding voting as a single class may waive compliance in a
particular instance by the Issuers with any provision of this Senior
Subordinated Indenture or the Senior Subordinated Notes or the Senior
Subordinated Note Guarantees. However, without the consent of each Holder
affected, an amendment, supplement or waiver under this Section 9.02 may not
(with respect to any Senior Subordinated Notes held by a non-consenting Holder):
(1) reduce the principal amount of Senior Subordinated Notes
whose holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of
any Senior Subordinated Note or alter the provisions with respect to the
redemption of the Senior Subordinated Notes (other than provisions
relating to Sections 4.10 and 4.14 hereof);
(3) reduce the rate of or extend the time for payment of
interest on any Senior Subordinated Note;
(4) waive a Default or Event of Default in the payment of
principal of, or premium or Additional Interest, if any, or interest on,
the Senior Subordinated Notes (except a rescission of acceleration of the
Senior Subordinated Notes by the holders of at least a majority in
aggregate principal amount of the then outstanding Senior Subordinated
Notes and a waiver of the payment default that resulted from such
acceleration);
(5) make any Senior Subordinated Note payable in money other
than that stated in the Senior Subordinated Notes;
(6) make any change in the provisions of this Senior
Subordinated Indenture relating to waivers of past Defaults or impair the
rights of Holders of Senior Subordinated Notes to receive payments of
principal of, or interest or premium or Additional Interest, if any, on,
the Senior Subordinated Notes;
(7) waive a redemption payment with respect to any Senior
Subordinated Note (other than a payment required by Section 4.10 or 4.14
hereof);
(8) modify the Guarantees in any manner adverse to the holders
of the Senior Subordinated Notes; or
(9) make any change in the preceding amendment and waiver
provisions.
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Section 9.03 Compliance with Trust Indenture Act. Every amendment or
supplement to this Senior Subordinated Indenture or the Senior Subordinated
Notes will be set forth in a amended or supplemental indenture that complies
with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Senior
Subordinated Note is a continuing consent by the Holder of a Senior Subordinated
Note and every subsequent Holder of a Senior Subordinated Note or portion of a
Senior Subordinated Note that evidences the same debt as the consenting Holder's
Senior Subordinated Note, even if notation of the consent is not made on any
Senior Subordinated Note. However, any such Holder of a Senior Subordinated Note
or subsequent Holder of a Senior Subordinated Note may revoke the consent as to
its Senior Subordinated Note if the Trustee receives written notice of
revocation before the date the amendment, supplement or waiver becomes
effective. After an amendment, supplement or waiver becomes effective in
accordance with its terms, it thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes. The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Senior
Subordinated Note thereafter authenticated. The Issuers in exchange for all
Senior Subordinated Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Senior Subordinated Notes that reflect
the amendment, supplement or waiver. Failure to make the appropriate notation or
issue a new Senior Subordinated Note will not affect the validity and effect of
such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc. The Trustee will sign
any amended or supplemental indenture authorized pursuant to this Article 9 if
the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Issuers may not sign an amended or
supplemental indenture until the Boards of Directors of the Issuers approve it.
In executing any amended or supplemental indenture, the Trustee will be provided
with and (subject to Section 7.01 hereof) will be fully protected in relying
upon, in addition to the documents required by Section 14.04 hereof, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this Senior
Subordinated Indenture.
ARTICLE X
SUBORDINATION
Section 10.01 Agreement to Subordinate. The Issuers agree, and each
Holder by accepting a Senior Subordinated Note agrees, that the payment of
principal, interest and premium, Additional Interest, if any, and any other
monetary Obligations on, or relating to, the Senior Subordinated Notes and the
payment of any Guarantee will be subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the prior payment in full in
cash or Cash Equivalents of all Senior Debt of the Issuers or the relevant
Guarantor (including Vanguard and VHS Holdco I), as the case may be, including
all obligations of the Issuers and the Guarantors under the Credit Agreement and
any and all Senior Debt incurred after the Issue Date. Payments (and
distributions of any kind or character) by the Issuers of, on or with respect to
principal, interest, premium, Additional Interest, if any, and other monetary
Obligations on, or
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relating to, the Senior Subordinated Notes are referred to herein as
"Subordinated Note Payments." All provisions of this Article 10 shall be subject
to Section 10.12.
Section 10.02 Liquidation, Dissolution, Bankruptcy. (a) The
holders of Senior Debt will be entitled to receive payment in full in cash or
Cash Equivalents of all Obligations due in respect of Senior Debt (including
interest after the commencement of any bankruptcy proceeding at the rate
specified in the applicable Senior Debt, whether or not such interest is an
allowed or allowable claim under applicable law) before the holders of Senior
Subordinated Notes will be entitled to receive any Subordinated Note Payments
(other than Permitted Junior Securities) on or with respect to the Senior
Subordinated Notes, in the event of any distribution to creditors of the
Issuers:
(1) in a total or partial liquidation, dissolution or winding
up of the Issuers;
(2) in a bankruptcy, reorganization, insolvency, receivership
or similar proceeding relating to the Issuers or their property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshalling of the Issuers' assets and liabilities.
(b) To the extent any payment of Senior Debt (whether by or on
behalf of the Issuers, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. To the extent that the obligation to repay any Senior Debt is
declared to be fraudulent, invalid, or otherwise set aside under any bankruptcy,
insolvency, receivership, fraudulent conveyance or similar law, then the
obligation so declared fraudulent, invalid or otherwise set aside (and all other
amounts that would come due with respect thereto had such obligation not been so
affected) shall be deemed to be reinstated and outstanding as Senior Debt for
all purposes hereof as if such declaration, invalidity or setting aside had not
occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of the Issuers of any kind or character,
whether in cash, property, securities or otherwise, to which the Holders or the
Trustee on behalf of the Holders would be entitled, but for this Section 10.02,
shall be made by the Issuers or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person making such payment or
distribution for the Holders or the Trustee prior to payment in full in cash or
cash equivalents of all Senior Debt, such payment or distribution shall be held
in trust for the benefit of, and shall be paid over or delivered to, the holders
of Senior Debt (proportionately to such holders on the basis of the respective
amount of Senior Debt held by such holders) or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Senior Debt may
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have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Debt in full in cash or cash equivalents, after
giving effect to any concurrent payment, distribution or provision therefore to
or for the holders of such Senior Debt.
Section 10.03 Default on Designated Senior Debt. (a) The Issuers
may not make any Subordinated Note Payments (other than Permitted Junior
Securities) in respect of the Senior Subordinated Notes if:
(1) a payment default on Designated Senior Debt occurs and is
continuing beyond any applicable grace period; or
(2) any other default occurs and is continuing on any series
of Designated Senior Debt that permits holders of that series of
Designated Senior Debt to accelerate its maturity and the Trustee receives
a notice of such default (a "Payment Blockage Notice") from the
Representative with respect to such Designated Senior Debt. No new Payment
Blockage Notice may be delivered unless and until 360 days have elapsed
since the delivery of the immediately prior Payment Blockage Notice and
all scheduled payments of principal, interest and premium and Additional
Interest, if any, on the Senior Subordinated Notes that have come due have
been paid in full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee will be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default has been cured or waived for a period of not
less than 90 days.
(b) Subordinated Note Payments may and will be resumed by the
Issuers:
(1) in the case of a payment default, upon the date on which
such default is cured or waived; and
(2) in the case of a nonpayment default, upon the earlier of
the date on which such nonpayment default is cured or waived (so long as no
other event of default exists) or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of any
Designated Senior Debt has been accelerated.
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 10.03(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (proportionately
to such holders on the basis of the respective amount of Senior Debt held by
such holders) or their respective representatives, as their respective interests
may appear. The Trustee shall be entitled to rely on information regarding
amounts then due and owing on the Senior Debt, if any, received from the holders
of Senior Debt (or their representatives) or, if such information is not
received from such holders or their representatives, from the Issuers and only
amounts included in the information provided to the Trustee shall be paid to the
holders of Senior Debt.
Section 10.04 Acceleration of Payment of Senior Subordinated Notes.
If payment of the Senior Subordinated Notes is accelerated because of an Event
of Default, the Issuers or the Trustee (provided, that the Trustee shall have
received written notice from the
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Issuers, on which notice the Trustee shall be entitled to conclusively rely)
shall promptly notify holders of Senior Debt (or their Representative) of the
acceleration; provided that any delay or failure to give such notice shall have
no effect whatsoever on the subordination provisions described herein.
Section 10.05 When Distribution Must Be Paid Over. If the Trustee or
any Holder of the Senior Subordinated Notes receives a Subordinated Note Payment
when the payment is prohibited by this Article 10, the Trustee or the Holder, as
the case may be, will hold such Subordinated Note Payment in trust for the
benefit of the holders of Senior Debt and deliver the Subordinated Note Payment
to the holders of Senior Debt or their proper Representative.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only those obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Senior
Subordinated Indenture against the Trustee.
Section 10.06 Notice by Issuers. (a) The Issuers shall promptly
notify the Trustee and the Paying Agent of any facts known to the Issuers that
would cause a payment in respect of the Senior Subordinated Notes to violate
this Article 10, but failure to give such notice shall not effect the
subordination of the Senior Subordinated Notes to the Senior Debt as provided in
this Article 10.
(b) The Issuers must promptly notify holders of Senior Debt or the
Representative of such holders if payment of the Senior Subordinated Notes is
accelerated because of an Event of Default; provided that any delay or failure
to give such notice shall have no effect whatsoever on the subordination
provisions described herein.
Section 10.07 Subrogation. After all Senior Debt of the Issuers is
paid in full in cash and until the Senior Subordinated Notes are paid in full,
the holders shall be subrogated (equally and ratably with all other Indebtedness
pari passu with the Senior Subordinated Notes) to the rights of holders of such
Senior Debt to receive distributions applicable to Senior Debt to the extent
that distributions otherwise payable to the holders have been applied to the
payment of such Senior Debt. A distribution made under this Article 10 to
holders of such Senior Debt which otherwise would have been made to the holders
is not, as between the Issuers and the holders, a payment by the Issuers on the
Senior Subordinated Notes.
Section 10.08 Relative Rights(a) . (a) This Article 10 defines the
relative rights of the Holders and holders of Senior Debt of the Issuers.
Nothing in this Senior Subordinated Indenture shall:
(1) impair, as between the Issuers and the Holders, the
obligation of the Issuers, which is absolute and unconditional, to pay
principal of, premium and interest and Additional Interest, if any, on the
Senior Subordinated Notes in accordance with their terms; or
(2) prevent the Trustee or any Holder from exercising
its available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Debt of the Issuers to receive distributions
and payments otherwise payable to Holders.
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(b) If the Issuers fail because of this Article 10 to pay principal
of, premium or interest or Additional Interest, if any, on a Senior Subordinated
Note on the due date, the failure is still a Default or Event of Default.
Section 10.09 Subordination May Not Be Impaired by Issuers. No right
of any holder of Senior Debt of the Issuers to enforce the subordination of the
Indebtedness evidenced by the Senior Subordinated Notes shall be impaired by any
act or failure to act by the Issuers or any Holder or by the failure of the
Issuers or any Holder to comply with this Senior Subordinated Indenture,
regardless of any knowledge thereof any such Holder may have or be charged with.
Section 10.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of the
Issuers, the distribution may be made and the notice given to their
Representative (if any).
Section 10.11 Rights of Trustee and Paying Agent . (a)
Notwithstanding the provisions of this Article 10 or any other provision of this
Senior Subordinated Indenture, the Trustee or any Paying Agent may continue to
make payments on the Senior Subordinated Notes and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than one Business Day prior to the date of such
payment, a Trust Officer of the Trustee receives written notice that payments
may not be made under this Article 10. The Issuers, the Registrar, any Paying
Agent, a Representative or a holder of Senior Debt of the Issuers may give the
notice; provided, however, that, if an issue of Senior Debt of the Issuers a
Representative, only the Representative may give the notice. Nothing in this
Section 10.11 is intended to or shall relieve any Holder from the obligations
imposed under Sections 10.02 or 10.03 with respect to distributions received
(whether from the Trustee or otherwise) in violation of the provisions hereof.
(b) The Trustee in its individual or any other capacity may hold
Senior Debt of the Issuers with the same rights it would have if it were not
Trustee. The Registrar and any Paying Agent may do the same with like rights.
The Trustee shall be entitled to all the rights set forth in this Article 10
with respect to any Senior Debt of the Issuers which may at any time be held by
it, to the same extent as any other holder of such Senior Debt; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07 or any other Section of this Senior Subordinated
Indenture.
Section 10.12 Trustee to Effectuate Subordination. Each Holder by
accepting a Senior Subordinated Note authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination between the Holders and the holders of Senior Debt
of the Issuers as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 10.13 Article 10 Not to Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Senior
Subordinated Notes by reason of any provision in this Article 10 shall not be
construed as preventing the occurrence of a Default. Nothing in this Article 10
shall have any effect on the right of the holders or the Trustee to accelerate
the maturity of the Senior Subordinated Notes; provided that all Senior Debt
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thereafter due or declared to be due shall first be paid in full in cash or Cash
Equivalents before the Holders are entitled to receive any payment of any kind
or character with respect to any Senior Subordinated Notes.
Section 10.14 Trust Monies Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of Government Obligations held in trust under Article 8 by the Trustee and
deposited at a time when permitted by the subordination provisions of this
Article 10 for the payment of principal of and interest on the Senior
Subordinated Notes shall not be subordinated to the prior payment of any Senior
Debt of the Issuers or subject to the restrictions set forth in this Article 10,
and none of the holders shall be obligated to pay over any such amount to the
Issuers or any holder of Senior Debt of the Issuers or any other creditor of the
Issuers.
Section 10.15 Trustee Entitled to Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the holders shall be
entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the holders or
(c) upon the Representatives for the holders of Senior Debt of the Issuers for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of such Senior Debt and other Indebtedness of the
Issuers, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior Debt of
the Issuers to participate in any payment or distribution pursuant to this
Article 10, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Debt held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article 10, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 10.
Section 10.16 Intentionally Omitted.
Section 10.17 Reliance by Holders of Senior Debt on Subordination
Provisions. (a) Each holder by accepting a Senior Subordinated Note
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Debt of the Issuers, whether such Senior Debt was created or acquired before or
after the issuance of the Senior Subordinated Notes, to acquire and continue to
hold, or to continue to hold, such Senior Debt and such holder of such Senior
Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt.
(b) Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt of the Issuers may, at any time and from
time to time, without the consent of or notice to the Trustee or the
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holders, without incurring responsibility to the Trustee or the holders and
without impairing or releasing the subordination provided in this Article 10 or
the obligations hereunder of the holders to the holders of the Senior Debt of
the Issuers, do any one or more of the following:
(1) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt of the Issuers, or
otherwise amend or supplement in any manner Senior Debt of the Issuers, or
any instrument evidencing the same or any agreement under which Senior
Debt of the Issuers is outstanding;
(2) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt of the
Issuers;
(3) release any Person liable in any manner for the payment or
collection of Senior Debt of the Issuers; and
(4) exercise or refrain from exercising any rights against the
Issuers and any other Person.
Section 10.18 Authorization to Effect Subordination . (a) Each
Holder of the Senior Subordinated Notes by such Holder's acceptance thereof
authorizes and expressly directs the Trustee on such Holder's behalf to take
such action as may be necessary or appropriate to effect the subordination
provisions contained in this Article 10, and appoints the Trustee such Holder's
attorney-in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Issuers tending towards liquidation or
reorganization of the business and assets of the Issuers, the immediate filing
of a claim for the unpaid balance of such Holder's Senior Subordinated Notes in
the form required in said proceedings and cause said claim to be approved. If
the Trustee does not file a proper claim or proof of debt in the form required
in any proceeding referred to in Section 6.09 prior to 30 days before the
expiration of the time to file such claim or claims, then any of the holders of
the Senior Debt or their representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Senior Subordinated
Notes. Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Debt or their representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Notes or the rights
of any Holder thereof, or to authorize the Trustee or the holders of Senior Debt
or their representative to vote in respect of the claim of any Holder in any
such proceeding.
ARTICLE XI
SUBORDINATION OF GUARANTEES
Section 11.01 Agreement to Subordinate. Each of the Guarantors
agree, and each Holder by accepting a Senior Subordinated Note agrees, that the
obligations of a Guarantor hereunder will be subordinated in right of payment,
to the extent and in the manner provided in this Article 11, to the prior
payment in full in cash or Cash Equivalents of all Senior Debt of such
Guarantor, including all obligations of the Guarantors under the Credit
Agreement and any and
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all Senior Debt incurred after the Issue Date. All provisions of this Article 11
shall be subject to Section 11.12.
Section 11.02 Liquidation, Dissolution, Bankruptcy. (a) The holders
of Senior Debt of a Guarantor will be entitled to receive payment in full in
cash or Cash Equivalents of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable Senior Debt, whether or not such interest is an
allowed or allowable claim under applicable law) before the Holders of Senior
Subordinated Notes will be entitled to receive any payments with respect to the
obligations of a Guarantor hereunder, in the event of any distribution to
creditors of the Guarantors:
(1) in a total or partial liquidation, dissolution or winding
up of the Guarantors;
(2) in a bankruptcy, reorganization, insolvency, receivership
or similar proceeding relating to the Guarantors or their property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshalling of the Guarantors' assets and
liabilities.
(b) To the extent any payment of Senior Debt (whether by or on
behalf of the Guarantors, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. To the extent that the obligation to repay any Senior Debt is
declared to be fraudulent, invalid, or otherwise set aside under any bankruptcy,
insolvency, receivership, fraudulent conveyance or similar law, then the
obligation so declared fraudulent, invalid or otherwise set aside (and all other
amounts that would come due with respect thereto had such obligation not been so
affected) shall be deemed to be reinstated and outstanding as Senior Debt for
all purposes hereof as if such declaration, invalidity or setting aside had not
occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets or securities of the Guarantors of any kind or character,
whether in cash, property, securities or otherwise, to which the Holders or the
Trustee on behalf of the Holders would be entitled, but for this Section 11.02,
shall be made by the Guarantors or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person making such payment or
distribution for the Holders or the Trustee prior to payment in full in cash or
cash equivalents of all Senior Debt, such payment or distribution shall be held
in trust for the benefit of, and shall be paid over or delivered to, the holders
of Senior Debt (proportionately to such holders on the basis of the respective
amount of Senior Debt held by such holders) or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay all such
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Senior Debt in full in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefore to or for the holders of
such Senior Debt.
Section 11.03 Default on Designated Senior Debt. (a) The
Guarantors may not make any Subordinated Note Payments (other than Permitted
Junior Securities) in respect of the Senior Subordinated Notes if:
(1) a payment default on Designated Senior Debt occurs and is
continuing beyond any applicable grace period; or
(2) any other default occurs and is continuing on any series
of Designated Senior Debt that permits holders of that series of
Designated Senior Debt to accelerate its maturity and the Trustee receives
a Payment Blockage Notice from the Representative with respect to such
Designated Senior Debt. No new Payment Blockage Notice may be delivered
unless and until 360 days have elapsed since the delivery of the
immediately prior Payment Blockage Notice and all scheduled payments of
principal, interest and premium and Additional Interest, if any, on the
Senior Subordinated Notes that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee will be, or be
made, the basis for a subsequent Payment Blockage Notice unless such
default has been cured or waived for a period of not less than 90 days.
(b) Subordinated Note Payments may and will be resumed by the
Guarantors:
(1) in the case of a payment default, upon the date on which
such default is cured or waived; and
(2) in the case of a nonpayment default, upon the earlier of
the date on which such nonpayment default is cured or waived (so long as no
other event of default exists) or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of any
Designated Senior Debt has been accelerated.
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 11.03(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt (proportionately
to such holders on the basis of the respective amount of Senior Debt held by
such holders) or their respective representatives, as their respective interests
may appear. The Trustee shall be entitled to rely on information regarding
amounts then due and owing on the Senior Debt, if any, received from the holders
of Senior Debt (or their representatives) or, if such information is not
received from such holders or their representatives, from the Guarantors and
only amounts included in the information provided to the Trustee shall be paid
to the holders of Senior Debt.
Section 11.04 Acceleration of Payment of Senior Subordinated Notes.
If payment of the Senior Subordinated Notes is accelerated because of an Event
of Default, the Issuers or the Trustee (provided, that the Trustee shall have
received written notice from the Issuers, on which notice the Trustee shall be
entitled to conclusively rely) shall promptly notify holders of Senior Debt (or
their Representative) of the acceleration; provided that any delay or
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failure to give such notice shall have no effect whatsoever on the subordination
provisions described herein.
Section 11.05 When Distribution Must Be Paid Over. If the Trustee or
any Holder of the Senior Subordinated Notes receives a Subordinated Note Payment
when the payment is prohibited by this Article 10, the Trustee or the Holder, as
the case may be, will hold such Subordinated Note Payment in trust for the
benefit of the holders of Senior Debt and deliver the Subordinated Note Payment
to the holders of Senior Debt or their proper Representative.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only those obligations on the part of the Trustee as are specifically
set forth in this Article 11, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Senior
Subordinated Indenture against the Trustee.
Section 11.06 Notice by Issuers or Guarantors. (a) The Issuers
or the respective Guarantor shall promptly notify the Trustee and the Paying
Agent of any facts known to the Issuers or any Guarantor that would cause a
payment in respect of the Senior Subordinated Notes to violate this Article 11,
but failure to give such notice shall not effect the subordination of the Senior
Subordinated Notes to the Senior Debt as provided in this Article 11.
(b) The Issuers or any Guarantor must promptly notify holders of
Senior Debt or the Representative of such holders if payment of the Senior
Subordinated Notes is accelerated because of an Event of Default; provided that
any delay or failure to give such notice shall have no effect whatsoever on the
subordination provisions described herein.
Section 11.07 Subrogation. After all Senior Debt of a Guarantor is
paid in full in cash and until the Senior Subordinated Notes are paid in full,
the Holders shall be subrogated (equally and ratably with all other Indebtedness
pari passu with the Senior Subordinated Notes) to the rights of holders of such
Senior Debt to receive distributions applicable to Senior Debt to the extent
that distributions otherwise payable to the holders have been applied to the
payment of such Senior Debt. A distribution made under this Article 11 to
holders of such Senior Debt which otherwise would have been made to the Holders
is not, as between the Guarantors and the Holders, a payment by the Guarantors
on the Senior Subordinated Notes.
Section 11.08 Relative Rights. (a) This Article 11 defines the
relative rights of the Holders and holders of Senior Debt of a Guarantor.
Nothing in this Senior Subordinated Indenture shall:
(1) impair, as between the Guarantors and the Holders, the
obligation of the Guarantors, which is absolute and unconditional, to pay
all obligations pursuant to its Guarantees in accordance with their terms;
or
(2) prevent the Trustee or any Holder from exercising its
available remedies upon a default by a Guarantor under its Obligations,
subject to the rights of holders of Senior Debt of such Guarantor to
receive distributions and payments otherwise payable to Holders.
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Section 11.09 Subordination May Not Be Impaired by a Guarantor. No
right of any holder of Senior Debt of a Guarantor to enforce the subordination
of the Indebtedness evidenced by the Senior Subordinated Notes shall be impaired
by any act or failure to act by such Guarantor or any Holder or by the failure
of such Guarantor or any holder to comply with this Senior Subordinated
Indenture regardless of any knowledge thereof any such Holder may have or be
charged with.
Section 11.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of a
Guarantor, the distribution may be made and the notice given to their
Representative (if any).
Section 11.11 Rights of Trustee and Paying Agent. (a)
Notwithstanding the provisions of this Article 11 or any other provision of this
Senior Subordinated Indenture, the Trustee or any Paying Agent may continue to
make payments on the Senior Subordinated Notes and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than one Business Day prior to the date of such
payment, a Trust Officer of the Trustee receives written notice that payments
may not be made under this Article 11. A Guarantor, the Registrar, any Paying
Agent, a Representative or a holder of Senior Debt of a Guarantor may give the
notice; provided, however, that, if an issue of Senior Debt of a Guarantor has a
Representative, only the Representative may give the notice. Nothing in this
Section 11.11 is intended to or shall relieve any Holder from the obligations
imposed under Sections 11.02 or 11.03 with respect to distributions received
(whether from the Trustee or otherwise) in violation of the provisions hereof.
(b) The Trustee in its individual or any other capacity may hold
Senior Debt of a Guarantor with the same rights it would have if it were not
Trustee. The Registrar and any Paying Agent may do the same with like rights.
The Trustee shall be entitled to all the rights set forth in this Article 11
with respect to any Senior Debt of a Guarantor which may at any time be held by
it, to the same extent as any other holder of such Senior Debt; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 11 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07 or any other Section of this Senior Subordinated
Indenture.
Section 11.12 Trustee to Effectuate Subordination. Each Holder by
accepting a Senior Subordinated Note authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination between the Holders and the holders of Senior Debt
of a Guarantor as provided in this Article 11 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 11.13 Article 10 Not to Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the obligations
of a Guarantor hereunder by reason of any provision in this Article 11 shall not
be construed as preventing the occurrence of a Default. Nothing in this Article
11 shall have any effect on the right of the Holders or the Trustee to
accelerate the maturity of the Senior Subordinated Notes; provided that all
Senior Debt thereafter due or declared to be due shall first be paid in full in
cash or Cash Equivalents before the Holders are entitled to receive any payment
of any kind or character with respect to any Senior Subordinated Notes.
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Section 11.14 Trust Monies Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of Government Obligations held in trust under Article 8 by the Trustee and
deposited at a time when permitted by the subordination provisions of this
Article 11 for the payment of obligations of a Guarantor hereunder shall not be
subordinated to the prior payment of any Senior Debt of a Guarantor or subject
to the restrictions set forth in this Article 11, and none of the holders shall
be obligated to pay over any such amount to a Guarantor or any holder of Senior
Debt of a Guarantor or any other creditor of a Guarantor.
Section 11.15 Trustee Entitled to Rely. Upon any payment or
distribution pursuant to this Article 11, the Trustee and the Holders shall be
entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 11.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Holders or
(c) upon the Representatives for the holders of Senior Debt of a Guarantor for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of such Senior Debt and other Indebtedness of a
Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 11.
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior Debt of
the Issuers to participate in any payment or distribution pursuant to this
Article 11, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior Debt held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and other facts pertinent to the rights of such
Person under this Article 11, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 11.
Section 11.16 Intentionally Omitted.
Section 11.17 Reliance by Holders of Senior Debt on Subordination
Provisions. (a) Each holder by accepting a Senior Subordinated Note
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Debt of a Guarantor, whether such Senior Debt was created or acquired before or
after the issuance of the Senior Subordinated Notes, to acquire and continue to
hold, or to continue to hold, such Senior Debt and such holder of such Senior
Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt.
(b) Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt of a Guarantor may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders,
without incurring responsibility to the Trustee or the holders and without
impairing or releasing the subordination provided in this Article 11 or the
obligations hereunder of the Holders to the holders of the Senior Debt of a
Guarantor, do any one or more of the following:
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(1) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt of a Guarantor, or
otherwise amend or supplement in any manner Senior Debt of a Guarantor, or
any instrument evidencing the same or any agreement under which Senior
Debt of a Guarantor is outstanding;
(2) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt of a
Guarantor;
(3) release any Person liable in any manner for the payment or
collection of Senior Debt of a Guarantor; and
(4) exercise or refrain from exercising any rights against the
Guarantors and any other Person.
Section 11.18 Authorization to Effect Subordination.(a) Each
Holder of the Senior Subordinated Notes by such Holder's acceptance thereof
authorizes and expressly directs the Trustee on such Holder's behalf to take
such action as may be necessary or appropriate to effect the subordination
provisions contained in this Article 11, and appoints the Trustee such Holder's
attorney-in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of any Guarantor tending towards liquidation or
reorganization of the business and assets of any Guarantor, the immediate filing
of a claim for the unpaid balance of such Holder's Senior Subordinated Notes in
the form required in said proceedings and cause said claim to be approved. If
the Trustee does not file a proper claim or proof of debt in the form required
in any proceeding referred to in Section 6.09 prior to 30 days before the
expiration of the time to file such claim or claims, then any of the holders of
the Senior Debt or their representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of said Senior Subordinated
Notes. Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Debt or their representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Notes or the rights
of any Holder thereof, or to authorize the Trustee or the holders of Senior Debt
or their representative to vote in respect of the claim of any Holder in any
such proceeding.
ARTICLE XII
SENIOR SUBORDINATED NOTE GUARANTEES
Section 12.01 Senior Subordinated Note Guarantees. (a) Subject
to this Article 11, each Guarantor hereby jointly and severally, irrevocably and
unconditionally guarantees on an unsecured senior subordinated basis as a
primary obligor and not merely as a surety, to each Holder and to the Trustee
and its successors and assigns:
(1) the full and punctual payment when due, whether at Stated
Maturity, by acceleration, by redemption or otherwise, of all obligations
of the Issuers under this Senior Subordinated Indenture (including
obligations to the Trustee) and the Senior Subordinated Notes, whether for
payment of principal of, premium, if any, or
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interest on in respect of the Senior Subordinated Notes and all other
monetary obligations of the Issuers under this Senior Subordinated
Indenture and the Senior Subordinated Notes; and
(2) the full and punctual performance within applicable grace
periods of all other obligations of the Issuers whether for fees,
expenses, indemnification or otherwise under this Senior Subordinated
Indenture and the Senior Subordinated Notes (all the foregoing being
hereinafter collectively called the "Guaranteed Obligations").
Each Guarantor further agrees that the Guaranteed Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
each such Guarantor, and that each such Guarantor shall remain bound under this
Article 11 notwithstanding any extension or renewal of any Guaranteed
Obligation.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Senior Subordinated Notes or this Senior Subordinated Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder of the
Senior Subordinated Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Issuers, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor waives presentation to,
demand of payment from and protest to the Issuers of any of the Guaranteed
Obligations and also waives notice of protest for nonpayment. Each Guarantor
waives notice of any default under the Senior Subordinated Notes or the
Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be
affected by (i) the failure of any Holder or the Trustee to assert any claim or
demand or to enforce any right or remedy against the Issuers or any other Person
under this Senior Subordinated Indenture, the Senior Subordinated Notes or any
other agreement or otherwise; (ii) any extension or renewal of this Senior
Subordinated Indenture, the Senior Subordinated Notes or any other agreement;
(iii) any rescission, waiver, amendment or modification of any of the terms or
provisions of this Senior Subordinated Indenture, the Senior Subordinated Notes
or any other agreement; (iv) the release of any security held by any Holder or
the Trustee for the Guaranteed Obligations or any Guarantor; (v) the failure of
any Holder or Trustee to exercise any right or remedy against any other
guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of
such Guarantor, except as provided in Section 12.03.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Issuers or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Senior Subordinated Note Guarantee, to the extent theretofore discharged, will
be reinstated in full force and effect. Each Guarantor hereby waives any right
to which it may be entitled to have its obligations hereunder divided among the
Guarantors, such that such Guarantor's obligations would be less than the full
amount claimed. Each Guarantor hereby waives any right to which it may be
entitled to have the assets of the Issuers first be used and depleted as payment
of the Issuers' or such Guarantor's obligations hereunder prior to any amounts
being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby
waives any right to which it may be entitled to require that the Issuers be sued
prior to an action being initiated against such Guarantor.
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(d) Each Guarantor further agrees that its Senior Subordinated Note
Guarantee 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.
(e) The Senior Subordinated Note Guarantee of each Guarantor is, to
the extent and in the manner set forth in Article 11, subordinated and subject
in right of payment to the prior payment in full of the principal of and
premium, if any, and interest on all Senior Debt of the relevant Guarantor and
is made subject to such provisions of this Senior Subordinated Indenture.
(f) Except as expressly set forth in Sections 8.01, 12.02, 12.03 and
12.07, the obligations of each 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 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 Senior
Subordinated Indenture, the Senior Subordinated Notes or any other agreement, by
any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of any Guarantor as a matter of law or equity.
(g) Each Guarantor agrees that its Senior Subordinated Note
Guarantee shall remain in full force and effect until payment in full of all the
Guaranteed Obligations. Each Guarantor further agrees that its Senior
Subordinated Note Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Issuers or otherwise.
(h) 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
Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal
of or interest on any Guaranteed 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 Guaranteed Obligation, each 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 (i) the unpaid principal amount of such Guaranteed Obligations,
(ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the
extent not prohibited by applicable law) and (iii) all other monetary
obligations of the Issuers to the holders and the Trustee.
(i) Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations and all obligations to which the
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Guaranteed Obligations are subordinated as provided in Article 11. Each
Guarantor further agrees that, as between it, on the one hand, and the holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of any Senior Subordinated Note Guarantee herein, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Guaranteed Obligations guaranteed hereby, and (y) 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 Guarantor for the purposes of this
Section 12.01.
(j) Each 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 12.01.
(k) Upon request of the Trustee, each Guarantor 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 Senior
Subordinated Indenture.
(l) Notwithstanding the foregoing, the guarantee by Vanguard Health
Financial Company, Inc., and any claims thereunder, will be pari passu with any
claim, right or entitlement that the United States Government or Internal
Revenue Service may have with respect to the assets of Vanguard Health Financial
Company, Inc. in connection with the closing agreement to be entered into under
Section 7121 of the Code between Vanguard Health Financial Company, Inc. and the
Commissioner of Internal Revenue with respect to the election under Section
953(d) of the Code made (or to be made) by Volunteer Insurance, Ltd.; provided,
however, that such pari passu treatment shall apply to no more than an amount of
assets of Vanguard Health Financial Company, Inc. with an adjusted basis equal
to 10% of the gross income (as defined in such closing agreement) of Volunteer
Insurance, Ltd.
Section 12.02 Limitation on Liability. Any term or provision of this
Senior Subordinated Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Guaranteed Obligations guaranteed hereunder by any
Guarantor shall not exceed the maximum amount that, after giving effect to all
Senior Debt of such Guarantor, can be hereby guaranteed without rendering this
Senior Subordinated Indenture, as it relates to such Guarantor, voidable under
applicable fraudulent conveyance or fraudulent transfer provisions of the United
States Bankruptcy Code or any comparable provisions of State law or similar laws
affecting the rights of creditors generally.
Section 12.03 Release. A Senior Subordinated Note Guarantee as to
any Subsidiary Guarantor shall terminate and be of no further force or effect
and such Subsidiary Guarantor shall automatically and unconditionally be
released and discharged from all of its obligations under this Article 11 if:
(a) (1) all of its assets or Capital Stock is sold or transferred,
in each case in a transaction in compliance with Section 4.10 hereof;
124
(2) the Guarantor merges with or into, or consolidates with or
amalgamates with, or transfers all or substantially all of its assets to,
another Person in compliance with Article 5 hereof;
(3) (A) the Subsidiary Guarantor's guarantee of the Credit
Agreement is released or such release is authorized under the Credit
Agreement and the administrative agent under the Credit Agreement has
agreed to release such guarantee subject only to, and promptly following,
the release of such Subsidiary Guarantor's Guarantee or (B) the
Indebtedness that resulted in the creation of such Guarantee is released
or discharged; or
(4) such Subsidiary Guarantor is designated an Unrestricted
Subsidiary in accordance with the terms of this Senior Subordinated
Indenture; and
(b) in the case of (a)(1), (2), or (3) above, such Subsidiary
Guarantor is released from its guarantee of the Credit Agreement or such release
is authorized under the Credit Agreement and the administrative agent under the
Credit Agreement has agreed to release such guarantee subject only to, and
promptly following, the release of such Subsidiary Guarantor's Guarantee.
(c) VHS Holdco I shall be automatically and unconditionally released
and discharged from all of its obligations under its Guarantee of the Senior
Subordinated Notes only if the conditions described in paragraphs (a)(1) or
(3)(A) are satisfied with respect to VHS Holdco I.
(d) Notwithstanding the foregoing, if any Guarantor is released from
its Guarantee pursuant to paragraph (a)(1), (2) or (3) above, and such Guarantor
is not released from its guarantee of the Credit Agreement within 30 days after
the release of its Guarantee, then such Guarantor shall immediately provide a
Guarantee under this Senior Subordinated Indenture until such Guarantor's
guarantee under the Credit Agreement is released.
Notwithstanding any other provisions of this Senior Subordinated
Indenture, Vanguard may be released from all of its obligations under its
Guarantee and shall cease to be a Guarantor for all purposes under this Senior
Subordinated Indenture, at the option of the Issuers and Vanguard at any time
following the Issue Date.
Section 12.04 Successors and Assigns. This Article 11 shall be
binding upon each 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 Senior Subordinated
Indenture and in the Senior Subordinated Notes shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions of this Senior Subordinated Indenture.
Section 12.05 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 11 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
125
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
11 at law, in equity, by statute or otherwise.
Section 12.06 Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
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 Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
Section 12.07 Execution of Supplemental Indenture for Future
Guarantors. Each Subsidiary and other Person which is required to become a
Guarantor pursuant to Section 4.16 shall promptly execute and deliver to the
Trustee a supplemental indenture in the form of Exhibit E hereto pursuant to
which such Subsidiary or other Person shall become a Guarantor under this
Article 11 and shall guarantee the Guaranteed Obligations. Concurrently with the
execution and delivery of such supplemental indenture, the Issuers shall deliver
to the Trustee an Opinion of Counsel and an Officers' Certificate to the effect
that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary or other Person and that, subject to the
application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors' rights generally and to
the principles of equity, whether considered in a proceeding at law or in
equity, the Senior Subordinated Note Guarantee of such Guarantor is a legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms and/or to such other matters as the
Trustee may reasonably request.
ARTICLE XIII
SATISFACTION AND DISCHARGE
Section 13.01 Satisfaction and Discharge. This Senior Subordinated
Indenture will be discharged and will cease to be of further effect as to all
Senior Subordinated Notes issued hereunder, when:
(1) either:
(A) all Senior Subordinated Notes that have been
authenticated, except lost, stolen or destroyed Senior Subordinated
Notes that have been replaced or paid and Senior Subordinated Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuers and thereafter repaid to
the Issuers, have been delivered to the Trustee for cancellation; or
(B) all Senior Subordinated Notes that have not been
delivered to the Trustee for cancellation have become due and
payable by reason of the mailing of a notice of redemption or
otherwise or will become due and payable within one year and the
Issuers or any Guarantor has irrevocably deposited or
126
caused to be deposited with the Trustee as trust funds in trust
solely for the benefit of the holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient, without consideration of any
reinvestment of interest, to pay and discharge the entire
Indebtedness on the Senior Subordinated Notes not delivered to the
Trustee for cancellation for principal, premium and Additional
Interest, if any, and accrued interest to the date of maturity or
redemption;
(2) the Issuers have paid or caused to be paid all sums
payable by them under this Senior Subordinated Indenture; and
(3) in the event of a deposit as provided in clause (1)(B)
above, the Issuers have delivered irrevocable instructions to the Trustee
under this Senior Subordinated Indenture to apply the deposited money
toward the payment of the Senior Subordinated Notes at maturity or on the
redemption date, as the case may be.
In addition, the Issuers must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Senior
Subordinated Indenture, if money has been deposited with the Trustee pursuant to
this Section 13.01(1)(B), the provisions of Sections 13.02 and 8.06 hereof will
survive such satisfaction and discharge. In addition, nothing in this Section
13.01 will be deemed to discharge those provisions of Section 7.07 hereof, that,
by their terms, survive the satisfaction and discharge of this Senior
Subordinated Indenture.
Section 13.02 Application of Trust Money. Subject to the provisions
of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section
14.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Senior Subordinated Notes and this Senior Subordinated
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuers acting as their own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium and
Additional Interest, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 13.01 hereof 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 Issuers' and any Guarantor's obligations under this Senior
Subordinated Indenture and the Senior Subordinated Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 13.01 hereof;
provided that if the Issuers have made any payment of principal of, premium or
Additional Interest, if any, or interest on, any Senior Subordinated Notes
because of the reinstatement of its obligations, the Issuers shall be subrogated
to the rights of the holders of such Senior Subordinated Notes to receive such
payment from the money or Government Securities held by the Trustee or Paying
Agent.
127
ARTICLE XIV
MISCELLANEOUS
Section 14.01 Trust Indenture Act Controls. If any provision of this
Senior Subordinated Indenture limits, qualifies or conflicts with the duties
imposed by TIA Section 318(c), the imposed duties will control.
Section 14.02 Notices. Any notice or communication by the Issuers,
any Guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or by first class mail (registered or certified, return
receipt requested), facsimile transmission or overnight air courier guaranteeing
next day delivery, to the others' address:
If to the Issuers and/or any Guarantor:
Vanguard Health Systems, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile No.: 000-000-0000
Attention: General Counsel
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Rise Xxxxxx, Esq.
If to the Trustee:
U.S. Bank National Association Corporate Trust
Services 00 Xxxxxxxxxx Xxxxxx Xx. Xxxx, Xxxxxxxxx
00000 Facsimile No.: (000) 000-0000 Attention:
Xxxxxxx Xxxxxxxx
The Issuers, any Guarantor or the Trustee, by notice to the others,
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
will be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if transmitted by
facsimile; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
128
Any notice or communication to a Holder will be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers mail a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
Section 14.03 Communication by Holders of Notes with Other Holders
of Notes. Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Senior Subordinated Indenture or
the Senior Subordinated Notes. The Issuers, the Trustee, the Registrar and
anyone else shall have the protection of TIA Section 312(c).
Section 14.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any action
under this Senior Subordinated Indenture (other than in connection with the
Authentication Order, dated the date hereof, and delivered to the Trustee in
connection with the issuance of the Initial Senior Subordinated Notes), the
Issuers shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth
in Section 10.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Senior
Subordinated Indenture relating to the proposed action have been
satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth
in Section 10.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 14.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Senior Subordinated Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) must comply with the provisions of
TIA Section 314(e) and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
129
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him
or her to express an informed opinion as to whether or not such covenant
or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 14.06 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 14.07 No Personal Liability of Directors, Officers,
Employees and Stockholders. No past, present or future director, officer,
employee, incorporator or stockholder of the Issuers or any direct or indirect
parent entity (other than VHS Holdco I or Vanguard), as such, will have any
liability for any obligations of the Issuers under the Senior Subordinated
Notes, this Senior Subordinated Indenture, or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Senior
Subordinated Notes by accepting a Senior Subordinated Note waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Senior Subordinated Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Section 14.08 Governing Law. THIS SENIOR SUBORDINATED INDENTURE, THE
SENIOR SUBORDINATED NOTES AND THE SENIOR SUBORDINATED NOTE GUARANTEES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Section 14.09 Successors. All agreements of the Issuers in this
Senior Subordinated Indenture and the Senior Subordinated Notes will bind their
respective successors. All agreements of the Trustee in this Senior Subordinated
Indenture will bind its successors. All agreements of each Guarantor in this
Senior Subordinated Indenture will bind its successors, except as otherwise
provided in Section 10.04 hereof.
Section 14.10 Severability. In case any provision in this Senior
Subordinated Indenture or in the Senior Subordinated Notes is invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 14.11 Counterpart Originals. The parties may sign any number
of copies of this Senior Subordinated Indenture. Each signed copy will be an
original, but all of them together represent the same agreement.
Section 14.12 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles and
Sections of this Senior Subordinated Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Senior
Subordinated Indenture and will in no way modify or restrict any of the terms or
provisions hereof.
130
[Signatures on following page]
131
Dated as of September 23, 2004
SIGNATURES
VANGUARD HEALTH HOLDING COMPANY
II, LLC
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
VANGUARD HOLDING COMPANY II, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
VANGUARD HEALTH HOLDING COMPANY I, LLC
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
Counterpart Signature Page
Senior Subordinated Notes Indenture
SUBSIDIARY GUARANTORS:
HOSPITAL DEVELOPMENT OF WEST PHOENIX, INC.
XXXXXXX HEALTH PROVIDERS, INC.
XXXXXXX MANAGEMENT SERVICES, INC.
XXXXXXX MEDICAL RECORDS, INC.
MIDWEST CLAIMS PROCESSING, INC.
PROS TEMPORARY STAFFING, INC.
VANGUARD HEALTH FINANCIAL COMPANY, INC.
VANGUARD HEALTH MANAGEMENT, INC.
VHS ACQUISITION CORPORATION
VHS ACQUISITION SUBSIDIARY NUMBER 1, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 2, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 4, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 5, INC.
VHS ACQUISITION SUBSIDIARY NUMBER 8, INC.
VHS GENESIS LABS, INC.
VHS HOLDING COMPANY, INC.
VHS IMAGING CENTERS, INC.
VHS OF ANAHEIM, INC.
VHS OF ARROWHEAD, INC.
VHS OF HUNTINGTON BEACH, INC.
VHS OF ILLINOIS, INC.
VHS OF ORANGE COUNTY, INC.
VHS OF PHOENIX, INC.
VHS OF SOUTH PHOENIX, INC.
VHS OUTPATIENT CLINICS, INC.
WATERMARK PHYSICIAN SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
Duly authorized to sign on behalf of each of the
foregoing entities
THE ANAHEIM VHS LIMITED PARTNERSHIP
By: VHS of Anaheim, Inc., its General Partner
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
Counterpart Signature Page
Senior Subordinated Notes Indenture
THE HUNTINGTON BEACH VHS LIMITED
PARTNERSHIP
By: VHS of Huntington Beach, Inc., its
General Partner
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
HEALTHCARE COMPLIANCE, L.L.C.
By: Vanguard Health Management, Inc., its
Member
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
THE VHS ARIZONA IMAGING CENTERS LIMITED
PARTNERSHIP
By: VHS Imaging Centers, Inc., its General Partner
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
VHS SAN ANTONIO PARTNERS, L.P.
By: VHS Acquisition Subsidiary Number 5, Inc., its
General Partner
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
Counterpart Signature Page
Senior Subordinated Notes Indenture
Dated as of September 23, 2004
SIGNATURES
U.S. Bank National Association
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Authorized Signatory
Counterpart Signature Page
Senior Subordinated Notes Indenture
EXHIBIT A1
[Face of Senior Subordinated Note]
________________________________________________________________________________
CUSIP/ISIN
9% Senior Subordinated Notes due 2014
No. ____ $_____________
VANGUARD HEALTH HOLDING COMPANY II, LLC
and
VANGUARD HOLDING COMPANY II, INC.
promise to pay to CEDE & CO. or registered assigns, the principal sum of
$__________ DOLLARS on October 1, 2014.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: September 23, 2004
VANGUARD HEALTH HOLDING COMPANY
II, LLC
By: __________________________________
Name:
Title:
VANGUARD HOLDING COMPANY II, INC.
By: __________________________________
Name:
Title:
This is one of the Senior Subordinated Notes referred to
in the within-mentioned Senior Subordinated Indenture:
U.S. Bank National Association, as Trustee
By: _____________________________________
Authorized Signatory
A1-1
[Back of Senior Subordinated Note]
9% Senior Subordinated Notes due 2014
[Insert the Senior Subordinated Global Note Legend, if applicable pursuant to
the provisions of the Senior Subordinated Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Senior Subordinated Indenture]
Capitalized terms used herein have the meanings assigned to them in
the Senior Subordinated Indenture referred to below unless otherwise indicated.
(1) INTEREST. Vanguard Health Holding Company II, LLC, a Delaware
limited liability company, ("VHS Holdco II"), Vanguard Holding Company II, Inc.,
a Delaware corporation and a wholly owned subsidiary of VHS Holdco II (together
with VHS Holdco II, the "Issuers"), promise to pay interest on the principal
amount of this Senior Subordinated Note at 9% per annum from September 23, 2004
until maturity and shall pay the Additional Interest, if any, payable pursuant
to Section 8 of the Registration Rights Agreement referred to below. The Issuers
will pay interest and Additional Interest, if any, semi-annually in arrears on
April 1 and October 1 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an "Interest Payment Date"). Interest on
the Senior Subordinated Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from September 23, 2004
until the principal hereof is due. The first Interest Payment Date shall be
April 1, 2005. The Issuers will pay interest on overdue principal at the rate
borne by the Senior Subordinated Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Issuers will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Additional Interest, if any,
to the Persons who are registered Holders of Senior Subordinated Notes at the
close of business on the March 15 or September 15 next preceding the Interest
Payment Date, even if such Senior Subordinated Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Senior Subordinated Indenture with respect to defaulted
interest. Payments in respect of Senior Subordinated Notes represented by Senior
Subordinated Global Notes (including principal, premium, if any, and interest)
shall be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company or any successor depositary. The
Issuers will make all payments in respect of a Definitive Note (including
principal, premium, if any, and interest), at the office of each Paying Agent,
except that, at the option of the Issuers, payment of interest may be made by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Senior Subordinated Notes may also be made in the
case of a Holder of at least $1,000,000 aggregate principal amount of Senior
Subordinated Notes, 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 a 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). Such payment will be in such coin or
A1-2
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Senior Subordinated Indenture, will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to any Holder. The Issuers or any of their Subsidiaries may act
in any such capacity.
(4) INDENTURE. The Issuers have issued the Senior Subordinated Notes
under a Senior Subordinated Indenture dated as of September 23, 2004 (the
"Senior Subordinated Indenture") among the Issuers, the Guarantors and the
Trustee. The terms of the Senior Subordinated Notes include those stated in the
Senior Subordinated Indenture and those made part of the Senior Subordinated
Indenture by reference to the TIA. Terms defined in the Senior Subordinated
Indenture and not defined herein have the meanings ascribed thereto in the
Senior Subordinated Indenture. The Senior Subordinated Notes are subject to all
the terms and provisions of the Senior Subordinated Indenture, and Holders are
referred to the Senior Subordinated Indenture and the TIA for a statement of
such terms. To the extent any provision of this Senior Subordinated Note
conflicts with the express provisions of the Senior Subordinated Indenture, the
provisions of the Senior Subordinated Indenture shall govern and be controlling.
The Senior Subordinated Notes are senior subordinated unsecured
obligations of the Issuers. This Senior Subordinated Note is one of the Initial
Senior Subordinated Notes referred to in the Senior Subordinated Indenture. The
Senior Subordinated Notes include the Initial Senior Subordinated Notes, any
Additional Senior Subordinated Notes and any Senior Subordinated Exchange Notes
issued in exchange for Initial Senior Subordinated Notes or Additional Senior
Subordinated Notes pursuant to the Senior Subordinated Indenture. The Initial
Senior Subordinated Notes, any Additional Senior Subordinated Notes and any
Senior Subordinated Exchange Notes are treated as a single class of securities
under the Senior Subordinated Indenture. The Senior Subordinated Indenture
imposes certain limitations on the ability of the Issuers and their Restricted
Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Indebtedness,
enter into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, issue or sell shares of capital
stock of the Issuers and such Restricted Subsidiaries, enter into or permit
certain transactions with Affiliates, create or Incur Liens and make asset
sales. The Senior Subordinated Indenture also imposes limitations on the ability
of the Issuers and each Guarantor to consolidate or merge with or into any other
Person or convey, transfer or lease all or substantially all of its property.
To guarantee the due and punctual payment of the principal and
interest on the Senior Subordinated Notes and all other amounts payable by the
Issuers under the Senior Subordinated Indenture and the Senior Subordinated
Notes when and as the same shall be due and payable, whether at maturity, by
acceleration or otherwise, according to the terms of the Senior Subordinated
Notes and the Senior Subordinated Indenture, the Guarantors have, jointly and
severally, unconditionally guaranteed the Obligations of the Issuers under the
Senior Subordinated Notes on a senior subordinated unsecured basis pursuant to
the terms of the Senior Subordinated Indenture.
A1-3
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and (c) of this
Paragraph 5, the Issuers will not have the option to redeem the Senior
Subordinated Notes prior to October 1, 2009. On or after October 1, 2009, the
Issuers may redeem all or a part of the Senior Subordinated Notes upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Additional Interest, if any, on the Senior Subordinated Notes
redeemed to, but not including, the applicable redemption date, if redeemed
during the twelve-month period beginning on October 1 of the years indicated
below, subject to the rights of Holders on the relevant record date to receive
interest on the relevant interest payment date:
Year Percentage
---- ----------
2009........................................................ 104.500%
2010........................................................ 103.000%
2011........................................................ 101.500%
2012 and thereafter......................................... 100.000%
Unless the Issuers default in the payment of the redemption price,
interest will cease to accrue on the Senior Subordinated Notes or portions
thereof called for redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to October 1, 2007, the Issuers may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Senior
Subordinated Notes issued under the Senior Subordinated Indenture (including any
additional notes issued after the Issue Date) at a redemption price of 109% of
the principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to, but not including the redemption date, with the net cash
proceeds of one or more Equity Offerings (1) by the Issuers or (2) by any direct
or indirect parent of VHS Holdco II, in each case, to the extent the net cash
proceeds thereof are contributed to the common equity capital of VHS Holdco II
or used to purchase Capital Stock (other than Disqualified Stock) of VHS Holdco
II from it; provided that (1) at least 65% in aggregate principal amount of the
Senior Subordinated Notes issued under the Senior Subordinated Indenture
(excluding Senior Subordinated Notes held by the Issuers and their Subsidiaries)
remains outstanding immediately after the occurrence of such redemption and (2)
that such redemption occurs within 90 days of the date of the closing of such
Equity Offering.
(c) At any time prior to October 1, 2009, the Issuers may also
redeem all or a part of the Senior Subordinated Notes, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
of Senior Subordinated Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Additional Interest, if any, to but not
including, the date of redemption, subject to the rights of Holders of Senior
Subordinated Notes on the relevant record date to receive interest due on the
relevant interest payment date.
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(6) MANDATORY REDEMPTION. The Issuers are not required to make
mandatory redemption or sinking fund payments with respect to the Senior
Subordinated Notes.
(7) 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 whose Senior Subordinated Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to
a redemption date if the notice is issued in connection with a defeasance of the
Senior Subordinated Notes or a satisfaction or discharge of the Senior
Subordinated Indenture. Senior Subordinated Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Issuers will make an offer
(a "Change of Control Offer") to each Holder of the Senior Subordinated Notes to
repurchase all or any part (equal to $1,000 or an integral multiple of $1,000)
of that Holder's Senior Subordinated Notes at a purchase price in cash equal to
101% of the aggregate principal amount of Senior Subordinated Notes repurchased
plus accrued and unpaid interest and Additional Interest, if any, on the Senior
Subordinated Notes repurchased to, but not including, the date of purchase,
subject to the rights of Holders on the relevant record date to receive interest
due on the relevant interest payment date. Within 30 days following any Change
of Control, except to the extent that the Issuers have exercised their right to
redeem the Senior Subordinated Notes in accordance with Article 3 of the Senior
Subordinated Indenture, the Issuers will mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Senior Subordinated Indenture. The provisions of this clause (a) are subject to
the provisions of Section 4.14(c) of the Senior Subordinated Note Indenture.
(b) If VHS Holdco II or a Restricted Subsidiary of VHS Holdco II
consummates any Asset Sales, within ten Business Days of each date on which the
aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuers will
commence an offer to all Holders of Senior Subordinated Notes and all holders of
other Indebtedness that is pari passu with the Senior Subordinated Notes
containing provisions similar to those set forth in the Senior Subordinated
Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets (an "Asset Sale Offer") pursuant to Section 4.10 of the Senior
Subordinated Indenture to purchase the maximum principal amount of Senior
Subordinated Notes and such other pari passu Indebtedness that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Additional
Interest, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Senior Subordinated Indenture. To the extent that,
any Excess Proceeds remain after the consummation of an Asset Sale Offer, the
Issuers may use those Excess Proceeds for any purpose not otherwise prohibited
by the Senior Subordinated Indenture. If the aggregate principal amount of
Senior Subordinated Notes and other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior Subordinated Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis. Holders of Senior Subordinated Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Issuers prior to any related purchase date and may elect to have such
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Senior Subordinated Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" attached to the Senior Subordinated Notes.
(9) SUBORDINATION. The Senior Subordinated Notes and Senior
Subordinated Note Guarantees are subordinated to Senior Debt, as defined in the
Senior Subordinated Indenture. To the extent provided in the Senior Subordinated
Indenture, Senior Debt must be paid before the Senior Subordinated Notes and
Senior Subordinated Note Guarantees may be paid in accordance with the
subordination provisions contained in the Senior Subordinated Indenture and the
Issuers authorize the Trustee to give effect to such Subordination provisions
and appoints the Trustee as attorney-in-fact for such purpose.
(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated
Notes are in registered form without coupons in denominations of $1,000 and
integral multiples of $1,000. The transfer of Senior Subordinated Notes may be
registered and Senior Subordinated Notes may be exchanged as provided in the
Senior Subordinated Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuers may require a Holder to pay any taxes and fees
required by law or permitted by the Senior Subordinated Indenture. The Issuers
need not exchange or register the transfer of any Senior Subordinated Note or
portion of a Senior Subordinated Note selected for redemption, except for the
unredeemed portion of any Senior Subordinated Note being redeemed in part. Also,
the Issuers need not exchange or register the transfer of any Senior
Subordinated Notes for a period of 15 days before a selection of Senior
Subordinated Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
(11) PERSONS DEEMED OWNERS. The registered Holder of a Senior
Subordinated Note may be treated as its owner for all purposes.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Senior Subordinated Indenture or the Senior Subordinated Notes
may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Senior
Subordinated Notes including Additional Senior Subordinated Notes, if any,
voting as a single class, and any existing Default or Event or Default or
compliance with any provision of the Senior Subordinated Indenture or the Senior
Subordinated Notes may be waived with the consent of the Holders of a majority
in aggregate principal amount of the then outstanding Senior Subordinated Notes
including Additional Senior Subordinated Notes, if any, voting as a single
class. Without the consent of any Holder of a Senior Subordinated Note, the
Senior Subordinated Indenture or the Senior Subordinated Notes may be amended or
supplemented (i) to cure any ambiguity, defect or inconsistency, (ii) to provide
for uncertificated Senior Subordinated Notes in addition to or in place of
certificated Senior Subordinated Notes, (iii) to provide for the assumption of
either Issuers' obligations to Holders of the Senior Subordinated Notes in case
of a merger or consolidation or sale of all or substantially all of such
Issuers' assets, (iv) to make any change that would provide any additional
rights or benefits to the Holders of the Senior Subordinated Notes or that does
not adversely affect the legal rights under the Senior Subordinated Indenture of
any such Holder, (v) to comply with the requirements of the SEC in order to
effect or maintain the qualification of the
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Senior Subordinated Indenture under the TIA or (vi) to add a Guarantee of the
Senior Subordinated Notes or to release the Guarantee of Vanguard.
(13) DEFAULTS AND REMEDIES. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Senior Subordinated Notes may declare all the
Senior Subordinated Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Issuers, all outstanding Senior
Subordinated Notes will become due and payable immediately without further
action or notice. Holders may not enforce the Senior Subordinated Indenture or
the Senior Subordinated Notes except as provided in the Senior Subordinated
Indenture. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Senior Subordinated Notes may direct
the Trustee in its exercise of any trust or power. The Holders of a majority in
aggregate principal amount of the then outstanding Senior Subordinated Notes by
notice to the Trustee may, on behalf of the Holders of all of the Senior
Subordinated Notes, rescind an acceleration or waive any existing Default or
Event of Default and its consequences under the Senior Subordinated Indenture
except a continuing Default or Event of Default in the payment of interest or
premium or Additional Interest, if any, on, or the principal of, the Senior
Subordinated Notes. The Issuers are required to deliver to the Trustee annually
a statement regarding compliance with the Senior Subordinated Indenture, and the
Issuers are required, upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
(14) DISCHARGE AND DEFEASANCE. Subject to certain conditions, the
Issuers at any time may terminate some or all of its obligations under the
Senior Subordinated Notes, the Senior Subordinated Note Guarantees and the
Senior Subordinated Indenture if the Issuers deposit with the Trustee money or
Government Securities for the payment of principal of and interest on the Senior
Subordinated Notes to redemption or maturity, as the case may be.
(15) TRUSTEE DEALINGS WITH THE ISSUERS. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers or their Affiliates, as if it were not the Trustee.
(16) NO RECOURSE AGAINST OTHERS. A director, manager, officer,
employee, incorporator, member or stockholder of the Issuers or any of the
Guarantors, as such, will not have any liability for any obligations of the
Issuers or the Guarantors under the Senior Subordinated Notes, the Senior
Subordinated Note Guarantees or the Senior Subordinated Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Senior Subordinated Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Subordinated Notes.
(17) AUTHENTICATION. This Senior Subordinated Note will not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
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(18) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(19) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Senior Subordinated Notes under the Senior Subordinated Indenture, Holders of
Restricted Senior Subordinated Global Notes and Restricted Definitive Notes will
have all the rights set forth in the Registration Rights Agreement dated as of
September 23, 2004, among the Issuers, the Guarantors and the Initial Purchasers
named therein or, in the case of Additional Senior Subordinated Notes, Holders
of Restricted Global Senior Subordinated and Restricted Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any,
among the Issuers, the Guarantors and the other parties thereto, relating to
rights given by the Issuers and the Guarantors to the purchasers of any
Additional Senior Subordinated Notes (collectively, the "Registration Rights
Agreement").
(20) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Senior Subordinated Notes, and the Trustee
may use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Subordinated Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed thereon.
(21) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND
BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Senior Subordinated Indenture and/or the
Registration Rights Agreement. Requests may be made to:
Vanguard Health Holding Company II, LLC
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
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ASSIGNMENT FORM
To assign this Senior Subordinated Note, fill in the form below:
(I) or (we) assign and transfer this Senior Subordinated Note to:_______________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Senior Subordinated Note on the books of the Issuers. The agent
may substitute another to act for him.
Date: _______________
Your Signature:__________________________________
(Sign exactly as your name appears
on the face of this Senior
Subordinated Note)
Signature Guarantee*:________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Subordinated Note purchased
by the Issuers pursuant to Section 4.10 or 4.14 of the Senior Subordinated
Indenture, check the appropriate box below:
[_] Section 4.10 [_] Section 4.14
If you want to elect to have only part of the Senior Subordinated
Note purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the
Senior Subordinated Indenture, state the amount you elect to have purchased:
$___________
Date:____________________
Your Signature:__________________________________
(Sign exactly as your name appears
on the face of this Senior
Subordinated Note)
Tax Identification No.: _________________________
Signature Guarantee*: _______________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Senior Subordinated Global
Note for an interest in another Senior Subordinated Global Note or for a
Definitive Note, or exchanges of a part of another Senior Subordinated Global
Note or Definitive Note for an interest in this Senior Subordinated Global Note,
have been made:
Principal Amount of
Amount of Amount of this
decrease in increase in Senior
Principal Principal Subordinated
Amount of this Amount of this Global Note Signature of
Senior Senior following such authorized
Date of Subordinated Subordinated decrease (or officer of Trustee
Exchange Global Note Global Note increase) or Custodian
-------- -------------- -------------- ------------------- ------------------
* This schedule should be included only if the Senior Subordinated Note is
issued in global form.
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EXHIBIT A2
[Face of Regulation S Temporary Senior Subordinated Global Note]
________________________________________________________________________________
CUSIP/ISIN
9% Senior Subordinated Notes due 2014
No. _____ $ ____________
VANGUARD HEALTH HOLDING COMPANY II, INC.
and
VANGUARD HOLDING COMPANY II, INC.
promise to pay to CEDE & CO. or registered assigns, the principal sum of
$__________ DOLLARS on October 1, 2014.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: September 23, 2004
VANGUARD HEALTH HOLDING COMPANY
II, LLC
By: ___________________________________
Name:
Title:
VANGUARD HOLDING COMPANY II, INC.
By: ___________________________________
Name:
Title:
This is one of the Senior Subordinated Notes referred to
in the within-mentioned Senior Subordinated Indenture:
U.S. Bank National Association, as Trustee
By:_________________________________________
Authorized Signatory
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[Back of Regulation S Temporary Senior Subordinated Global Note]
9% Senior Subordinated Notes due 2014
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY SENIOR SUBORDINATED GLOBAL
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
SENIOR SUBORDINATED NOTES, ARE AS SPECIFIED IN THE SENIOR SUBORDINATED INDENTURE
(AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY SENIOR SUBORDINATED GLOBAL NOTE SHALL BE ENTITLED TO
RECEIVE PAYMENT OF INTEREST HEREON.
THIS SENIOR SUBORDINATED GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN
THE SENIOR SUBORDINATED INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY
FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE SENIOR
SUBORDINATED INDENTURE, (2) THIS SENIOR SUBORDINATED GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE SENIOR
SUBORDINATED INDENTURE, (3) THIS SENIOR SUBORDINATED GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE SENIOR
SUBORDINATED INDENTURE AND (4) THIS SENIOR SUBORDINATED GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
ISSUERS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS SENIOR SUBORDINATED NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANIES (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"),
TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
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FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT:
(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED
INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH
SUCH ACCOUNT,
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE MEANING
OF RULE 501(a) (1), (2),(3) OR (7) UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR"), OR
(C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT), AND
(2) AGREES FOR THE BENEFIT OF THE ISSUERS THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT
IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND ONLY:
(A) TO THE ISSUERS,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE
UNDER THE SECURITIES ACT,
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT,
(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT,
(E) IN A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000, TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, DELIVERS
TO THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH
MAY BE OBTAINED FROM THE TRUSTEE) RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS NOTE, OR
(F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
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PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE ISSUERS
RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS
OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE
PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SENIOR SUBORDINATED NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SENIOR SUBORDINATED NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE SENIOR SUBORDINATED INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS SENIOR SUBORDINATED NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Capitalized terms used herein have the meanings assigned to them in
the Senior Subordinated Indenture referred to below unless otherwise indicated.
(1) INTEREST. Vanguard Health Holding Company II, LLC, a Delaware
limited liability company, ("VHS Holdco II"), Vanguard Holding Company II, Inc.,
a Delaware corporation and a wholly owned subsidiary of VHS Holdco II (together
with VHS Holdco II, the "Issuers"), promise to pay interest on the principal
amount of this Senior Subordinated Note at 9% per annum from September 23, 2004
until maturity and shall pay the Additional Interest, if any, payable pursuant
to Section 8 of the Registration Rights Agreement referred to below. The Issuers
will pay interest and Additional Interest, if any, semi-annually in arrears on
April 1 and October 1 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an "Interest Payment Date"). Interest on
the Senior Subordinated Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from September 23, 2004
until the principal hereof is due. The first Interest Payment Date shall be
April 1, 2005. The Issuers will pay interest on overdue principal at the rate
borne by the Senior Subordinated Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Senior Subordinated Global Note is
exchanged for one or more Regulation S Permanent Senior Subordinated Global
Notes, the Holder hereof shall not be entitled to receive payments of interest
hereon; until so exchanged in full, this
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Regulation S Temporary Senior Subordinated Global Note shall in all other
respects be entitled to the same benefits as other Senior Subordinated Notes
under the Senior Subordinated Indenture.
(2) METHOD OF PAYMENT. The Issuers will pay interest on the Senior
Subordinated Notes (except defaulted interest) and Additional Interest, if any,
to the Persons who are registered Holders of Senior Subordinated Notes at the
close of business on the March 15 or September 15 next preceding the Interest
Payment Date, even if such Senior Subordinated Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Senior Subordinated Indenture with respect to defaulted
interest. Payments in respect of Senior Subordinated Notes represented by Senior
Subordinated Global Notes (including principal, premium, if any, and interest)
shall be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company or any successor depositary. The
Issuers will make all payments in respect of a Definitive Note (including
principal, premium, if any, and interest), at the office of each Paying Agent,
except that, at the option of the Issuers, payment of interest may be made by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Senior Subordinated Notes may also be made in the
case of a Holder of at least $1,000,000 aggregate principal amount of Senior
Subordinated Notes, 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 a 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). Such payment will be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Senior Subordinated Indenture, will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to any Holder. The Issuers or any of their Subsidiaries may act
in any such capacity.
(4) INDENTURE. The Issuers have issued the Senior Subordinated Notes
under a Senior Subordinated Indenture dated as of September 23, 2004 (the
"Senior Subordinated Indenture") among the Issuers, the Guarantors and the
Trustee. The terms of the Senior Subordinated Notes include those stated in the
Senior Subordinated Indenture and those made part of the Senior Subordinated
Indenture by reference to the TIA. Terms defined in the Senior Subordinated
Indenture and not defined herein have the meanings ascribed thereto in the
Senior Subordinated Indenture. The Senior Subordinated Notes are subject to all
the terms and provisions of the Senior Subordinated Indenture, and Holders are
referred to the Senior Subordinated Indenture and the TIA for a statement of
such terms. To the extent any provision of this Senior Subordinated Note
conflicts with the express provisions of the Senior Subordinated Indenture, the
provisions of the Senior Subordinated Indenture shall govern and be controlling.
The Senior Subordinated Notes are senior subordinated unsecured
obligations of the Issuers. This Senior Subordinated Note is one of the Initial
Senior Subordinated Notes referred to in the Senior Subordinated Indenture. The
Senior Subordinated Notes include the
A2-5
Initial Senior Subordinated Notes, any Additional Senior Subordinated Notes and
any Senior Subordinated Exchange Notes issued in exchange for Initial Senior
Subordinated Notes or Additional Senior Subordinated Notes pursuant to the
Senior Subordinated Indenture. The Initial Senior Subordinated Notes, any
Additional Senior Subordinated Notes and any Senior Subordinated Exchange Notes
are treated as a single class of securities under the Senior Subordinated
Indenture. The Senior Subordinated Indenture imposes certain limitations on the
ability of the Issuers and their Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the
payment of certain dividends and distributions by such Restricted Subsidiaries,
issue or sell shares of capital stock of the Issuers and such Restricted
Subsidiaries, enter into or permit certain transactions with Affiliates, create
or Incur Liens and make asset sales. The Senior Subordinated Indenture also
imposes limitations on the ability of the Issuers and each Guarantor to
consolidate or merge with or into any other Person or convey, transfer or lease
all or substantially all of its property.
To guarantee the due and punctual payment of the principal and
interest on the Senior Subordinated Notes and all other amounts payable by the
Issuers under the Senior Subordinated Indenture and the Senior Subordinated
Notes when and as the same shall be due and payable, whether at maturity, by
acceleration or otherwise, according to the terms of the Senior Subordinated
Notes and the Senior Subordinated Indenture, the Guarantors have, jointly and
severally, unconditionally guaranteed the Obligations of the Issuers under the
Senior Subordinated Notes on a senior subordinated unsecured basis pursuant to
the terms of the Senior Subordinated Indenture.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and (c) of this
Paragraph 5, the Issuers will not have the option to redeem the Senior
Subordinated Notes prior to October 1, 2009. On or after October 1, 2009, the
Issuers may redeem all or a part of the Senior Subordinated Notes upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Additional Interest, if any, on the Senior Subordinated Notes
redeemed to, but not including, the applicable redemption date, if redeemed
during the twelve-month period beginning on October 1 of the years indicated
below, subject to the rights of Holders on the relevant record date to receive
interest on the relevant interest payment date:
Year Percentage
------ ----------
2009.......................................................... 104.500%
2010.......................................................... 103.000%
2011.......................................................... 101.500%
2012 and thereafter........................................... 100.000%
Unless the Issuers default in the payment of the redemption price,
interest will cease to accrue on the Senior Subordinated Notes or portions
thereof called for redemption on the applicable redemption date.
A2-6
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to October 1, 2007, the Issuers may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Senior
Subordinated Notes issued under the Senior Subordinated Indenture (including any
additional notes issued after the Issue Date) at a redemption price of 109% of
the principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to, but not including the redemption date, with the net cash
proceeds of one or more Equity Offerings (1) by the Issuers or (2) by any direct
or indirect parent of VHS Holdco II, in each case, to the extent the net cash
proceeds thereof are contributed to the common equity capital of VHS Holdco II
or used to purchase Capital Stock (other than Disqualified Stock) of VHS Holdco
II from it; provided that (1) at least 65% in aggregate principal amount of the
Senior Subordinated Notes issued under the Senior Subordinated Indenture
(excluding Senior Subordinated Notes held by the Issuers and their Subsidiaries)
remains outstanding immediately after the occurrence of such redemption and (2)
that such redemption occurs within 90 days of the date of the closing of such
Equity Offering.
(c) At any time prior to October 1, 2009, the Issuers may also
redeem all or a part of the Senior Subordinated Notes, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
of Senior Subordinated Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Additional Interest, if any, to, the date of
redemption, subject to the rights of Holders of Senior Subordinated Notes on the
relevant record date to receive interest due on the relevant interest payment
date.
(6) MANDATORY REDEMPTION. The Issuers are not required to make
mandatory redemption or sinking fund payments with respect to the Senior
Subordinated Notes.
(7) 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 whose Senior Subordinated Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to
a redemption date if the notice is issued in connection with a defeasance of the
Senior Subordinated Notes or a satisfaction or discharge of the Senior
Subordinated Indenture. Senior Subordinated Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Issuers will make an offer
(a "Change of Control Offer") to each Holder of the Senior Subordinated Notes to
repurchase all or any part (equal to $1,000 or an integral multiple of $1,000)
of that Holder's Senior Subordinated Notes at a purchase price in cash equal to
101% of the aggregate principal amount of Senior Subordinated Notes repurchased
plus accrued and unpaid interest and Additional Interest, if any, on the Senior
Subordinated Notes repurchased to, but not including, the date of purchase,
subject to the rights of Holders on the relevant record date to receive interest
due on the relevant interest payment date. Within 30 days following any Change
of Control, except to the extent that the Issuers have exercised their right to
redeem the Senior Subordinated Notes in accordance with Article 3 of the Senior
Subordinated Indenture, the Issuers will mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Senior Subordinated
X0-0
Xxxxxxxxx. The provisions of this clause (a) are subject to the provisions of
Section 4.14(c) of the Senior Subordinated Note Indenture.
(b) If VHS Holdco II or a Restricted Subsidiary of VHS Holdco II
consummates any Asset Sales, within ten Business Days of each date on which the
aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuers will
commence an offer to all Holders of Senior Subordinated Notes and all holders of
other Indebtedness that is pari passu with the Senior Subordinated Notes
containing provisions similar to those set forth in the Senior Subordinated
Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets (an "Asset Sale Offer") pursuant to Section 4.10 of the Senior
Subordinated Indenture to purchase the maximum principal amount of Senior
Subordinated Notes and such other pari passu Indebtedness that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Additional
Interest, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Senior Subordinated Indenture. To the extent that
any Excess Proceeds remain after the consummation of an Asset Sale Offer, the
Issuers may use those Excess Proceeds for any purpose not otherwise prohibited
by the Senior Subordinated Indenture. If the aggregate principal amount of
Senior Subordinated Notes and other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior Subordinated Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis. Holders of Senior Subordinated Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Issuers prior to any related purchase date and may elect to have such Senior
Subordinated Notes purchased by completing the form entitled "Option of Holder
to Elect Purchase" attached to the Senior Subordinated Notes.
(9) SUBORDINATION. The Senior Subordinated Notes and Senior
Subordinated Note Guarantees are subordinated to Senior Debt, as defined in the
Senior Subordinated Indenture. To the extent provided in the Senior Subordinated
Indenture, Senior Debt must be paid before the Senior Subordinated Notes and
Senior Subordinated Note Guarantees may be paid in accordance with the
subordination provisions contained in the Senior Subordinated Indenture and the
Issuers authorize the Trustee to give effect to such subordination provisions
and appoints the Trustee as attorney-in-fact for such purpose.
(10) DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated
Notes are in registered form without coupons in denominations of $1,000 and
integral multiples of $1,000. The transfer of Senior Subordinated Notes may be
registered and Senior Subordinated Notes may be exchanged as provided in the
Senior Subordinated Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuers may require a Holder to pay any taxes and fees
required by law or permitted by the Senior Subordinated Indenture. The Issuers
need not exchange or register the transfer of any Senior Subordinated Note or
portion of a Senior Subordinated Note selected for redemption, except for the
unredeemed portion of any Senior Subordinated Note being redeemed in part. Also,
the Issuers need not exchange or register the transfer of any Senior
Subordinated Notes for a period of 15 days before a selection of Senior
Subordinated Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
A2-8
This Regulation S Temporary Senior Subordinated Global Note is
exchangeable in whole or in part for one or more Senior Subordinated Global
Notes only (i) on or after the termination of the 40-day distribution compliance
period (as defined in Regulation S) and (ii) upon presentation of certificates
(accompanied by an Opinion of Counsel, if applicable) required by Article 2 of
the Senior Subordinated Indenture. Upon exchange of this Regulation S Temporary
Senior Subordinated Global Note for one or more Senior Subordinated Global
Notes, the Trustee shall cancel this Regulation S Temporary Senior Subordinated
Global Note.
(11) PERSONS DEEMED OWNERS. The registered Holder of a Senior
Subordinated Note may be treated as its owner for all purposes.
(12) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Senior Subordinated Indenture or the Senior Subordinated Notes
may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Senior
Subordinated Notes including Additional Senior Subordinated Notes, if any,
voting as a single class, and any existing Default or Event or Default or
compliance with any provision of the Senior Subordinated Indenture or the Senior
Subordinated Notes may be waived with the consent of the Holders of a majority
in aggregate principal amount of the then outstanding Senior Subordinated Notes
including Additional Senior Subordinated Notes, if any, voting as a single
class. Without the consent of any Holder of a Senior Subordinated Note, the
Senior Subordinated Indenture or the Senior Subordinated Notes may be amended or
supplemented (i) to cure any ambiguity, defect or inconsistency, (ii) to provide
for uncertificated Senior Subordinated Notes in addition to or in place of
certificated Senior Subordinated Notes, (iii) to provide for the assumption of
either Issuers' obligations to Holders of the Senior Subordinated Notes in case
of a merger or consolidation or sale of all or substantially all of such
Issuers' assets, (iv) to make any change that would provide any additional
rights or benefits to the Holders of the Senior Subordinated Notes or that does
not adversely affect the legal rights under the Senior Subordinated Indenture of
any such Holder, (v) to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Senior Subordinated Indenture under
the TIA, or (vi) to add a Guarantee of the Senior Subordinated Notes or to
release the Guarantee of Vanguard.
(13) DEFAULTS AND REMEDIES. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Senior Subordinated Notes may declare all the
Senior Subordinated Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Issuers, all outstanding Senior
Subordinated Notes will become due and payable immediately without further
action or notice. Holders may not enforce the Senior Subordinated Indenture or
the Senior Subordinated Notes except as provided in the Senior Subordinated
Indenture. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Senior Subordinated Notes may direct
the Trustee in its exercise of any trust or power. The Holders of a majority in
aggregate principal amount of the then outstanding Senior Subordinated Notes by
notice to the Trustee may, on behalf of the Holders of all of the Senior
Subordinated Notes, rescind an acceleration or waive any existing Default or
Event of Default and its consequences under the Senior Subordinated Indenture
except a continuing Default or Event of Default in the payment of interest or
premium or Additional Interest, if any, on, or the principal
A2-9
of, the Senior Subordinated Notes. The Issuers are required to deliver to the
Trustee annually a statement regarding compliance with the Senior Subordinated
Indenture, and the Issuers are required, upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
(14) DISCHARGE AND DEFEASANCE. Subject to certain conditions, the
Issuers at any time may terminate some or all of its obligations under the
Senior Subordinated Notes, the Senior Subordinated Note Guarantees and the
Senior Subordinated Indenture if the Issuers deposit with the Trustee money or
Government Securities for the payment of principal of and interest on the Senior
Subordinated Notes to redemption or maturity, as the case may be.
(15) TRUSTEE DEALINGS WITH THE ISSUERS. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers or their Affiliates, as if it were not the Trustee.
(16) NO RECOURSE AGAINST OTHERS. A director, manager, officer,
employee, incorporator, member or stockholder of the Issuers or any of the
Guarantors, as such, will not have any liability for any obligations of the
Issuers or the Guarantors under the Senior Subordinated Notes, the Senior
Subordinated Note Guarantees or the Senior Subordinated Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Senior Subordinated Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Subordinated Notes.
(17) AUTHENTICATION. This Senior Subordinated Note will not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
(18) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(19) ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights
provided to Holders of Senior Subordinated Notes under the Senior Subordinated
Indenture, Holders of Restricted Senior Subordinated Global Notes and Restricted
Definitive Notes will have all the rights set forth in the Registration Rights
Agreement dated as of September 23, 2004, among the Issuers, the Guarantors and
the Initial Purchasers named therein or, in the case of Additional Senior
Subordinated Notes, Holders of Restricted Senior Subordinated Global Notes and
Restricted Definitive Notes will have the rights set forth in one or more
registration rights agreements, if any, among the Issuers, the Guarantors and
the other parties thereto, relating to rights given by the Issuers and the
Guarantors to the purchasers of any Additional Senior Subordinated Notes
(collectively, the "Registration Rights Agreement").
(20) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Senior Subordinated Notes, and the Trustee
may use CUSIP
A2-10
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Senior
Subordinated Notes or as contained in any notice of redemption, and reliance may
be placed only on the other identification numbers placed thereon.
(21) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND
BE USED TO CONSTRUE THE SENIOR SUBORDINATED INDENTURE, THIS SENIOR SUBORDINATED
NOTE AND THE SENIOR SUBORDINATED NOTE GUARANTEES.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Senior Subordinated Indenture and/or the
Registration Rights Agreement. Requests may be made to:
Vanguard Health Holding Company II, LLC
Vanguard Holding Company II, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
A2-11
ASSIGNMENT FORM
To assign this Senior Subordinated Note, fill in the form below:
(I) or (we) assign and transfer this Senior Subordinated Note to:_______________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Senior Subordinated Note on the books of the Issuers. The agent
may substitute another to act for him.
Date:___________________
Your Signature:__________________________________
(Sign exactly as your name appears
on the face of this Senior
Subordinated Note)
Signature Guarantee*:___________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Subordinated Note purchased
by the Issuers pursuant to Section 4.10 or 4.14 of the Senior Subordinated
Indenture, check the appropriate box below:
[_] Section 4.10 [_] Section 4.14
If you want to elect to have only part of the Senior Subordinated
Note purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the
Senior Subordinated Indenture, state the amount you elect to have purchased:
$__________________
Date: ___________________
Your Signature:__________________________________
(Sign exactly as your name appears
on the face of this Senior
Subordinated Note)
Tax Identification No.: _________________________
Signature Guarantee*: _________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-13
SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY
SENIOR SUBORDINATED GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary
Senior Subordinated Global Note for an interest in another Senior Subordinated
Global Note, or exchanges of a part of another other Restricted Senior
Subordinated Global Note for an interest in this Regulation S Temporary Senior
Subordinated Global Note, have been made:
Principal
Amount of Amount of Amount of this
decrease in increase in Senior
Principal Principal Subordinated
Amount of this Amount of this Global Note Signature of
Senior Senior following such authorized
Date of Subordinated Subordinated decrease (or officer of Trustee
Exchange Global Note Global Note increase) or Custodian
-------- -------------- -------------- -------------- ------------------
A2-14
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Vanguard Health Holding Company II, LLC
Vanguard Holding Company II, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
U.S. Bank National Association
Corporate Trust Services
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: General Counsel
Re: 9% Senior Subordinated Notes due 2014
Reference is hereby made to the Senior Subordinated Indenture, dated
as of September 23, 2004 (the "Senior Subordinated Indenture"), among Vanguard
Health Holding Company II, LLC, a Delaware limited liability company, ("VHS
Holdco II"), Vanguard Holding Company II, Inc., a Delaware corporation and a
wholly owned subsidiary of VHS Holdco II (together with VHS Holdco II, the
"Issuers"), the Guarantors party thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Senior Subordinated Indenture.
___________________, (the "Transferor") owns and proposes to
transfer the Senior Subordinated Note[s] or interest in such Senior Subordinated
Note[s] specified in Annex A hereto, in the principal amount of $___________ in
such Senior Subordinated Note[s] or interests (the "Transfer"), to
___________________________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE SENIOR SUBORDINATED 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE
NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in
accordance with Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Senior Subordinated Note is being
transferred to a Person that the Transferor reasonably believes is purchasing
the beneficial interest or Definitive Note for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A, and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Senior Subordinated
Indenture, the transferred beneficial interest or Definitive Note will be
B-1
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Senior Subordinated Global Note and/or the Restricted
Definitive Note and in the Senior Subordinated Indenture and the Securities Act.
2. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S TEMPORARY SENIOR SUBORDINATED GLOBAL NOTE, THE
REGULATION S PERMANENT SENIOR SUBORDINATED GLOBAL NOTE OR A RESTRICTED
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant B-1 to and in accordance with Rule 903 or Rule 904 under the Securities
Act and, accordingly, the Transferor hereby further certifies that (i) the
Transfer is not being made to a Person in the United States and (x) at the time
the buy order was originated, the Transferee was outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Senior Subordinated Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Permanent Senior Subordinated Global Note, the Regulation S
Temporary Senior Subordinated Global Note and/or the Restricted Definitive Note
and in the Senior Subordinated Indenture and the Securities Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI SENIOR SUBORDINATED GLOBAL NOTE OR A RESTRICTED
DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE
144A OR REGULATION S. The Transfer is being effected in compliance with the
transfer restrictions applicable to beneficial interests in Restricted Senior
Subordinated Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act; or
(b) [_] such Transfer is being effected to the Issuers or a
subsidiary thereof; or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act; or
B-2
(d) [_] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or
Rule 904, and the Transferor hereby further certifies that it has not engaged in
any general solicitation within the meaning of Regulation D under the Securities
Act and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Senior Subordinated Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Senior Subordinated Indenture and (2) requested by
an Issuer, an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act. Upon consummation
of the proposed transfer in accordance with the terms of the Senior Subordinated
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Senior Subordinated Global Note and/or the Restricted
Definitive Notes and in the Senior Subordinated Indenture and the Securities
Act.
4. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED SENIOR SUBORDINATED GLOBAL NOTE OR OF AN
UNRESTRICTED DEFINITIVE NOTE.
(a) [_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Senior Subordinated Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Senior Subordinated Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Senior
Subordinated Indenture, the transferred beneficial interest or Definitive Note
will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Senior Subordinated Global
Notes, on Restricted Definitive Notes and in the Senior Subordinated Indenture.
(b) [_] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Senior Subordinated Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions on
transfer contained in the Senior Subordinated Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Senior Subordinated Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Senior Subordinated Global Notes, on Restricted Definitive Notes and in the
Senior Subordinated Indenture.
(c) [_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in
B-3
compliance with the transfer restrictions contained in the Senior Subordinated
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Senior
Subordinated Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Senior Subordinated
Indenture, the transferred beneficial interest or Definitive Note will not be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Senior Subordinated Global Notes or Restricted
Definitive Notes and in the Senior Subordinated Indenture.
B-4
This certificate and the statements contained herein are made for
your benefit and the benefit of the Issuers.
___________________________________
[Insert Name of Transferor]
By: _______________________________
Name:
Title:
Dated:___________________
B-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_]Senior Subordinated 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Senior Subordinated Global Note (CUSIP _________),
or
(iii) [_] IAI Senior Subordinated Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_]Senior Subordinated 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Senior Subordinated Global Note (CUSIP _________),
or
(iii) [_] IAI Senior Subordinated Global Note (CUSIP _________); or
(iv) [_] Unrestricted Senior Subordinated Global Note (CUSIP _________);
or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note, in accordance with the terms of the
Senior Subordinated Indenture.
B-6
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Vanguard Health Holding Company II, LLC
Vanguard Holding Company II, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
U.S. Bank National Association
Corporate Trust Services
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: General Counsel
Re: 9% Senior Subordinated Notes due 2014
(CUSIP ________________ )
Reference is hereby made to the Senior Subordinated Indenture, dated
as of September 23, 2004 (the "Senior Subordinated Indenture"), among Vanguard
Health Holding Company II, LLC, a Delaware limited liability company, ("VHS
Holdco II"), Vanguard Holding Company II, Inc., a Delaware corporation and a
wholly owned subsidiary of VHS Holdco II (together with VHS Holdco II, the
"Issuers"), the Guarantors party thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Senior Subordinated Indenture.
__________________________, (the "Owner") owns and proposes to
exchange the Senior Subordinated Note[s] or interest in such Senior Subordinated
Note[s] specified herein, in the principal amount of $_____________ in such
Senior Subordinated Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN A RESTRICTED SENIOR SUBORDINATED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE
NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED SENIOR SUBORDINATED GLOBAL NOTE
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED SENIOR SUBORDINATED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN
UNRESTRICTED SENIOR SUBORDINATED GLOBAL NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Senior Subordinated Global Note
for a beneficial interest in an Unrestricted Senior Subordinated Global Note in
an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Senior Subordinated Global Notes and pursuant to and in
C-1
accordance with the Securities Act of 1933, as amended (the "Securities Act"),
(iii) the restrictions on transfer contained in the Senior Subordinated
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Senior Subordinated Global Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(b) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED SENIOR SUBORDINATED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Senior Subordinated Global Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Senior Subordinated
Global Notes and pursuant to and in accordance with the Securities Act, (iii)
the restrictions on transfer contained in the Senior Subordinated Indenture and
the Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED SENIOR SUBORDINATED GLOBAL NOTE. In
connection with the Owner's Exchange of a Restricted Definitive Note for a
beneficial interest in an Unrestricted Senior Subordinated Global Note, the
Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Senior Subordinated Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the beneficial interest is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Senior Subordinated Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED SENIOR SUBORDINATED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES
OR BENEFICIAL INTERESTS IN RESTRICTED SENIOR SUBORDINATED GLOBAL NOTES
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED SENIOR SUBORDINATED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Senior Subordinated Global Note for a Restricted Definitive Note with an equal
principal amount, the Owner hereby certifies that the Restricted Definitive Note
is being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of the Senior
Subordinated Indenture, the Restricted Definitive Note issued will continue to
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Definitive Note and in the Senior Subordinated
Indenture and the Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED SENIOR SUBORDINATED GLOBAL NOTE. In
connection with the Exchange of the Owner's Restricted Definitive Note for a
beneficial interest in the [CHECK ONE] [_] Senior Subordinated 144A Global Note,
[_] Regulation S Senior Subordinated Global Note, [_] IAI Senior Subordinated
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Senior Subordinated Global
Notes and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Exchange in accordance with the
terms of the Senior Subordinated Indenture, the beneficial interest issued will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Senior Subordinated Global Note and in
the Senior Subordinated Indenture and the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Issuers.
___________________________________
[Insert Name of Transferor]
By: _______________________________
Name:
Title:
Dated:___________________
EXHIBIT D
FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Vanguard Health Holding Company II, LLC
Vanguard Holding Company II, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
U.S. Bank National Association
Corporate Trust Services
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: General Counsel
Re: 9% Senior Subordinated Notes due 2014
Reference is hereby made to the Senior Subordinated Indenture, dated
as of September 23, 2004 (the "Senior Subordinated Indenture"), among Vanguard
Health Holding Company II, LLC, a Delaware limited liability company, ("VHS
Holdco II"), Vanguard Holding Company II, Inc., a Delaware corporation and a
wholly owned subsidiary of VHS Holdco II (together with VHS Holdco II, the
"Issuers"), the Guarantors party thereto and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Senior Subordinated Indenture.
In connection with our proposed purchase of $______________
aggregate principal amount of:
(a) [_] a beneficial interest in a Senior Subordinated Global Note,
or
(b) [_] a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Senior
Subordinated Notes or any interest therein is subject to certain restrictions
and conditions set forth in the Senior Subordinated Indenture and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Senior Subordinated Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Senior Subordinated
Notes have not been registered under the Securities Act, and that the Senior
Subordinated Notes and any interest therein may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf
of any accounts for which we are acting as hereinafter
D-1
stated, that if we should sell the Senior Subordinated Notes or any interest
therein, we will do so only (A) to the Issuers or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter
substantially in the form of this letter and, if requested by an Issuer, an
Opinion of Counsel in form reasonably acceptable to the Issuers to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Senior Subordinated Global Note from us in a
transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.
3. We understand that, on any proposed resale of the Senior
Subordinated Notes or beneficial interest therein, we will be required to
furnish to you and the Issuers such certifications, legal opinions and other
information as you and the Issuers may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. We further understand
that the Senior Subordinated Notes purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and 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 Senior Subordinated
Notes, and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Senior Subordinated Notes or beneficial
interest therein purchased by us for our own account or for one or more accounts
(each of which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By: _______________________________
Name:
Title:
Dated: ______________
D-2
EXHIBIT E
[FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT
GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Senior Subordinated
Indenture"), dated as of ________________, 200__, among __________________ (the
"New Guarantor"), a subsidiary of Vanguard Health Holding Company II, LLC, a
Delaware limited liability company ("VHS Holdco II"), Vanguard Holding Company
II, Inc., a Delaware corporation and a wholly owned subsidiary of VHS Holdco II
(together with VHS Holdco II, the "Issuers") and U.S. Bank National Association,
as trustee under the Senior Subordinated Indenture referred to below (the
"Trustee").
WITNESSETH
WHEREAS, the Issuers and the existing Guarantors have heretofore
executed and delivered to the Trustee an indenture (as amended, supplemented or
otherwise modified, the "Senior Subordinated Indenture"), dated as of September
23, 2004 providing for the issuance of 9% Senior Subordinated Notes due 2014
(the "Senior Subordinated Notes");
WHEREAS, Section 4.16 of the Senior Subordinated Indenture provides
that under certain circumstances the New Guarantor shall execute and deliver to
the Trustee a supplemental indenture pursuant to which the New Guarantor shall
unconditionally guarantee all of the Issuers' Obligations under the Senior
Subordinated Notes and the Senior Subordinated Indenture on the terms and
conditions set forth herein (the "Note Guarantee"); and WHEREAS, pursuant to
Section 9.01 of the Senior Subordinated Indenture, the Trustee and the Issuers
are authorized to execute and deliver this Supplemental Senior Subordinated
Indenture.
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 Issuers and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of the Senior Subordinated Notes as follows:
1. DEFINED TERMS. Defined terms used herein without definition shall
have the meanings assigned to them in the Senior Subordinated Indenture.
2. AGREEMENT TO GUARANTEE. The New Guarantor hereby agrees, jointly
and severally with all existing Guarantors (if any), to provide an unconditional
Guarantee on the terms and subject to the conditions set forth in Article 12 of
the Senior Subordinated Indenture and to be bound by all other applicable
provisions of the Senior Subordinated Indenture and the Senior Subordinated
Notes and to perform all of the obligations and agreements of a Guarantor under
the Senior Subordinated Indenture. The Guarantee of the New Guarantor shall be
subordinated to Senior Debt as provided in the Senior Subordinated Note
Indenture
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
manager, officer, employee, incorporator, stockholder or member of the Issuers,
any parent entity of the Issuers or any Subsidiary, as such, will have any
liability for any obligations of the Issuers or the Guarantors under the Senior
Subordinated Notes, this Senior Subordinated
E-1
Indenture, the Note Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Senior
Subordinated Notes by accepting a Senior Subordinated Note waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Senior Subordinated Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
4. NOTICES. All notices or other communications to the New Guarantor
shall be given as provided in Section 14.02 of the Senior Subordinated
Indenture.
5. RATIFICATION OF INDENTURE; SUPPLEMENTAL INDENTURES PART OF
INDENTURE. Except as expressly amended hereby, the Senior Subordinated 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
Senior Subordinated Indenture shall form a part of the Senior Subordinated
Indenture for all purposes, and every holder of Senior Subordinated Notes
heretofore or hereafter authenticated and delivered shall be bound hereby.
6. GOVERNING LAW. THIS INDENTURE, THE NOTES AND THE SENIOR
SUBORDINATED NOTE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
7. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Senior Subordinated Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
9. TRUSTEE MAKES NO REPRESENTATION. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _____________, 20 ___
[NEW GUARANTOR]
By: _________________________________________
Name:
Title:
VANGUARD HEALTH HOLDING COMPANY
II, LLC
By: _________________________________________
Name:
Title:
VANGUARD HOLDING COMPANY II, INC.
By: _________________________________________
Name:
Title:
E-3
VANGUARD HEALTH HOLDING COMPANY I,
LLC
By: _________________________________________
Name:
Title:
VANGUARD HEALTH SYSTEMS, INC.
By: _________________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By __________________________________________
Authorized Signatory X-0
X-0
