Exhibit 4.1
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HEALTHSOUTH CORPORATION
Floating Rate Senior Notes due 2014
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INDENTURE
Dated as of June 14, 2006
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THE BANK OF NOVA SCOTIA
TRUST COMPANY OF NEW YORK,
as Trustee
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CROSS-REFERENCE TABLE
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TIA Indenture
Section Section
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310(a)(1) ............................. 7.10
(a)(2) ............................. 7.10
(a)(3) ............................. N.A.
(a)(4) ............................. N.A.
(b) ............................. 7.08; 7.10
(c) ............................. N.A.
311(a) ............................. 7.11
(b) ............................. 7.11
(c) ............................. N.A.
312(a) ............................. 2.05
(b) ............................. 11.03
(c) ............................. 11.03
313(a) ............................. 7.06
(b)(1) ............................. 7.06
(b)(2) ............................. 7.06
(c) ............................. 11.02
(d) ............................. 7.06
314(a) ............................. 4.02; 4.12; 11.02
(b) ............................. N.A.
(c)(1) ............................. 11.04
(c)(2) ............................. 11.04
(c)(3) ............................. N.A.
(d) ............................. N.A.
(e) ............................. 11.05
(f) ............................. 4.13
315(a) ............................. 7.01
(b) ............................. 7.05; 11.02
(c) ............................. 7.01
(d) ............................. 7.01
(e) ............................. 6.11
316(a)(last sentence) ............................. 11.06
(a)(1)(A) ............................. 6.05
(a)(1)(B) ............................. 6.04
(a)(2) ............................. N.A.
(b) ............................. 6.07
317(a)(1) ............................. 6.08
(a)(2) ............................. 6.09
(b) ............................. 2.04
318(a) ............................. 11.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions..................................................7
SECTION 1.02. Other Definitions...........................................38
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...........39
SECTION 1.04. Rules of Construction.......................................39
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating.............................................40
SECTION 2.02. Execution and Authentication................................40
SECTION 2.03. Registrar and Paying Agent..................................41
SECTION 2.04. Paying Agent to Hold Money in Trust.........................42
SECTION 2.05. Holder Lists................................................42
SECTION 2.06. Transfer and Exchange.......................................42
SECTION 2.07. Replacement Securities......................................43
SECTION 2.08. Outstanding Securities......................................43
SECTION 2.09. Temporary Securities........................................43
SECTION 2.10. Cancelation.................................................44
SECTION 2.11. Defaulted Interest..........................................44
SECTION 2.12. CUSIP Numbers and ISINs.....................................44
SECTION 2.13. Issuance of Additional Securities...........................44
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee..........................................45
SECTION 3.02. Selection of Securities To Be Redeemed......................45
SECTION 3.03. Notice of Redemption........................................45
SECTION 3.04. Effect of Notice of Redemption..............................46
SECTION 3.05. Deposit of Redemption Price.................................46
SECTION 3.06. Securities Redeemed in Part.................................47
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities.......................................47
SECTION 4.02. SEC Reports.................................................47
SECTION 4.03. Limitation on Indebtedness..................................48
SECTION 4.04. Limitation on Restricted Payments...........................50
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries.....................................54
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock..........55
SECTION 4.07. Limitation on Transactions with Affiliates..................59
SECTION 4.08. Change of Control...........................................60
SECTION 4.09. Limitation on Liens.........................................61
SECTION 4.10. Limitation on Sale/Leaseback Transactions...................61
SECTION 4.11. Future Guarantors...........................................62
SECTION 4.12. Compliance Certificate......................................62
SECTION 4.13. Further Instruments and Acts................................62
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets...................62
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default...........................................64
SECTION 6.02. Acceleration................................................66
SECTION 6.03. Other Remedies..............................................66
SECTION 6.04. Waiver of Past Defaults.....................................67
SECTION 6.05. Control by Majority.........................................67
SECTION 6.06. Limitation on Suits.........................................67
SECTION 6.07. Rights of Holders to Receive Payment........................68
SECTION 6.08. Collection Suit by Trustee..................................68
SECTION 6.09. Trustee May File Proofs of Claim............................68
SECTION 6.10. Priorities..................................................68
SECTION 6.11. Undertaking for Costs.......................................69
SECTION 6.12. Waiver of Stay or Extension Laws............................69
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee...........................................69
SECTION 7.02. Rights of Trustee...........................................70
SECTION 7.03. Individual Rights of Trustee................................71
SECTION 7.04. Trustee's Disclaimer........................................71
SECTION 7.05. Notice of Defaults..........................................71
SECTION 7.06. Reports by Trustee to Holders...............................72
SECTION 7.07. Compensation and Indemnity..................................72
SECTION 7.08. Replacement of Trustee......................................73
SECTION 7.09. Successor Trustee by Merger.................................73
SECTION 7.10. Eligibility; Disqualification...............................74
SECTION 7.11. Preferential Collection of Claims Against Company...........74
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance............74
SECTION 8.02. Conditions to Defeasance....................................75
SECTION 8.03. Application of Trust Money..................................76
SECTION 8.04. Repayment to Company........................................76
SECTION 8.05. Indemnity for Government Obligations........................77
SECTION 8.06. Reinstatement...............................................77
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders..................................77
SECTION 9.02. With Consent of Holders.....................................78
SECTION 9.03. Compliance with Trust Indenture Act.........................79
SECTION 9.04. Revocation and Effect of Consents and Waivers...............79
SECTION 9.05. Notation on or Exchange of Securities.......................80
SECTION 9.06. Trustee to Sign Amendments..................................80
SECTION 9.07. Payment for Consent.........................................80
ARTICLE 10
Subsidiary Guaranties
SECTION 10.01. Guaranties..................................................80
SECTION 10.02. Limitation on Liability.....................................82
SECTION 10.03. Successors and Assigns......................................82
SECTION 10.04. No Waiver...................................................82
SECTION 10.05. Modification................................................82
SECTION 10.06. Release of Subsidiary Guarantor.............................83
SECTION 10.07. Contribution................................................83
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls................................84
SECTION 11.02. Notices.....................................................84
SECTION 11.03. Communication by Holders with Other Holders.................84
SECTION 11.04. Certificate and Opinion as to Conditions Precedent..........84
SECTION 11.05. Statements Required in Certificate or Opinion...............85
SECTION 11.06. When Securities Disregarded.................................85
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar................85
SECTION 11.08. Legal Holidays..............................................85
SECTION 11.09. Governing Law...............................................86
SECTION 11.10. No Recourse Against Others..................................86
SECTION 11.11. Successors..................................................86
SECTION 11.12. Multiple Originals..........................................86
SECTION 11.13. Table of Contents; Headings.................................86
Appendix A - Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit 2 - Form of Transferee Letter of Representation
Exhibit A - Form of Exchange Security or Private Exchange Security
Exhibit B - Form of Guaranty Agreement
INDENTURE dated as of June 14, 2006, among HEALTHSOUTH CORPORATION, a
Delaware corporation (the "Company"), the SUBSIDIARY GUARANTORS (as defined
herein) party hereto and THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, a
New York trust company (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (a) the Company's Floating
Rate Senior Notes due 2014 issued on the date hereof (the "Original
Securities"), (b) any Additional Securities (as defined herein) that may be
issued from time to time subsequent to the Issue Date (all such Securities in
clauses (a) and (b) being referred to collectively as the "Initial Securities"),
(c) if and when issued as provided in a Registration Rights Agreement (as
defined in Appendix A hereto (the "Appendix")), the Company's Floating Rate
Senior Notes due 2014 issued in a Registered Exchange Offer in exchange for any
Initial Securities (the "Exchange Securities") and (d) if and when issued as
provided in a Registration Rights Agreement, the Private Exchange Securities (as
defined in the Appendix) (together with the Initial Securities and any Exchange
Securities issued hereunder, the "Securities") issued in a Private Exchange:
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (1) any property or assets used in a Related
Business; (2) the Capital Stock of a Person that becomes a Restricted Subsidiary
as a result of the acquisition of such Capital Stock by the Company or another
Restricted Subsidiary; or (3) Capital Stock constituting a minority interest in
any Person that at such time is a Restricted Subsidiary; provided, however, that
any such Restricted Subsidiary described in clause (2) or (3) above is primarily
engaged in a Related Business.
"Additional Securities" means Securities issued under the terms of this
Indenture subsequent to the Issue Date, and in compliance with Sections 2.13 and
4.03, it being understood that any Securities issued in exchange for or
replacement of any Initial Security issued on the Issue Date shall not be an
Additional Security, including any such Securities issued pursuant to a
Registration Rights Agreement.
"Adjusted Treasury Rate" means, with respect to any redemption date,
(1) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after June 15, 2009, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month) or (2)
if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date, in each case calculated on
the third Business Day immediately preceding the redemption date, and in each
case of (1) and (2), plus 0.50%.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. No
Person (other than the Company or any Subsidiary of the Company) in whom a
Receivables Entity makes an Investment in connection with a Qualified
Receivables Transaction shall be deemed to be an Affiliate of the Company or any
of its Subsidiaries solely by reason of such Investment.
"Applicable Premium" means, with respect to a Security at any
redemption date, the greater of (1) 1.00% of the principal amount of such
Security and (2) the excess of (A) the present value at such redemption date of
(i) the redemption price of such Security on June 15, 2009 (such redemption
price being set forth in paragraph 5 of such Security, exclusive of any accrued
interest), plus (ii) all required remaining scheduled interest payments due on
such Security through June 15, 2009 (assuming that the rate of interest on the
Security for the period from the redemption date through June 15, 2009, will be
equal to the rate of interest on the Security in effect on the date on which the
applicable notice of redemption is given, but excluding accrued and unpaid
interest to the redemption date), computed using a discount rate equal to the
Adjusted Treasury Rate, over (B) the principal amount of such Security on such
redemption date.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be held
by a Person other than the Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such Restricted
Subsidiary;
other than, in the case of clauses (1), (2) and (3) above,
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(A) a disposition by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Restricted Subsidiary;
(B) for purposes of Section 4.06 only, a disposition that
constitutes a Restricted Payment (or would constitute a Restricted
Payment but for the exclusions from the definition thereof) that is not
prohibited by Section 4.04 or that constitutes a Permitted Investment;
(C) a disposition of all or substantially all the assets of the
Company in accordance with Section 5.01;
(D) a disposition of assets with a Fair Market Value of less than
or equal to $2,000,000;
(E) sales of damaged, worn-out or obsolete equipment or assets in
the ordinary course of business that, in the Company's reasonable
judgment, are no longer either used or useful in the business of the
Company or its Subsidiaries;
(F) the sale or discount, in each case without recourse, of
accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof;
(G) sales of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables Transaction" to a
Receivables Entity;
(H) transfers of accounts receivable and related assets of the
type specified in the definition of "Qualified Receivables Transaction"
(or a fractional undivided interest therein) by a Receivables Entity in
a Qualified Receivables Transaction;
(I) leases or subleases to third Persons in the ordinary course of
business that do not interfere in any material respect with the
business of the Company or any of its Restricted Subsidiaries;
(J) a disposition of cash or Temporary Cash Investments; and
(K) the creation of a Lien (but not the sale or other disposition
of the property subject to such Lien).
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate implicit in the lease, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such lease has
been extended); provided, however, that if such Sale/Leaseback Transaction
results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby shall be determined in accordance with the definition of "Capital Lease
Obligation".
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"Average Life" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing:
(1) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
or redemption or similar payment with respect to such Indebtedness
multiplied by the amount of such payment by
(2) the sum of all such payments.
"Birmingham Hospital Transaction" means, collectively, the sale of the
Downtown Birmingham Medical Center and, to the extent required in connection
therewith, the acquisition of, and the buyout of leases with respect to, such
property and Sale/Leaseback Transactions with Healthcare Realty Trust
Incorporated and HR Acquisition of Alabama, Inc., in each case to the extent
consummated on or prior to September 10, 2006.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Calculation Agent" means a financial institution appointed by the
Company to calculate the interest payable on the Securities in respect of each
Interest Period.
"Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty. For purposes of Section 4.09, a Capital Lease Obligation shall be
deemed to be secured by a Lien on the property being leased.
"Capital Stock" of any Person means any and all shares, interests
(including partnership interests), rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Captive Insurance Subsidiary" means HCS, Ltd., a Cayman Islands
entity, and any successor to it, and any other Subsidiary formed for the purpose
of facilitating self-insurance programs of the Company and its Subsidiaries.
"Change of Control" means the occurrence of any of the following
events:
(1) the Company becomes aware that any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or has become the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act, except that for purposes of this clause (1) such person shall be deemed
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to have "beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of the Company;
(2) at any time during any period of up to 24 consecutive months,
commencing on the Issue Date, individuals who at the beginning of such
period constituted the Board of Directors (together with any new directors
whose election by such Board of Directors or whose nomination for election
by the shareholders of the Company was approved by a vote of a majority of
the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of
the Board of Directors then in office;
(3) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution; or
(4) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the sale
of all or substantially all the assets of the Company (determined on a
consolidated basis) to another Person, other than a transaction following
which (i) in the case of a merger or consolidation transaction, holders of
securities that represented 100% of the Voting Stock of the Company
immediately prior to such transaction (or other securities into which such
securities are converted as part of such merger or consolidation
transaction) own directly or indirectly at least a majority of the voting
power of the Voting Stock of the surviving Person in such merger or
consolidation transaction immediately after such transaction and (ii) in the
case of a sale of assets transaction, each transferee becomes an obligor in
respect of the Securities and a Subsidiary of the transferor of such assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities from the redemption date to June 15, 2009, that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of a maturity most
nearly equal to June 15, 2009.
"Comparable Treasury Price" means, with respect to any redemption date,
if clause (2) of the Adjusted Treasury Rate is applicable, the average of three,
or if not possible, such lesser number as is obtained by the Company, Reference
Treasury Dealer Quotations for such redemption date.
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"Consolidated Amortization Expense" means, for any Person for any
period, the amortization expense of such Person and its Restricted Subsidiaries
for such period (to the extent included in the computation of Consolidated Net
Income of such Person), determined on a consolidated basis in accordance with
GAAP, excluding amortization expense attributable to a prepaid item that was
paid in cash in a prior period.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (a) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days prior to the date of
such determination to (b) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness (and the application
of the proceeds thereof) as if such Indebtedness had been Incurred on the
first day of such period;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary had not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used to
repay, repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, EBITDA for such period
shall be reduced by an amount equal to EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition
for such period, or increased by an amount equal to EBITDA (if negative),
directly attributable thereto for such period and Consolidated Interest
Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of
the Company or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
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(4) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring
in connection with a transaction requiring a calculation to be made
hereunder, that constitutes a hospital or other health care-related business
or all or substantially all of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition had occurred on the first
day of such period; and
(5) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made
any Asset Disposition, any Investment or acquisition of assets that would
have required an adjustment pursuant to clause (3) or (4) above if made by
the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto as if such Asset Disposition, Investment or
acquisition had occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any
Indebtedness Incurred in connection therewith, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting Officer of
the Company (and shall include any applicable Pro Forma Cost Savings). If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness).
If any Indebtedness is incurred under a revolving credit facility and
is being given pro forma effect, the interest on such Indebtedness shall be
calculated based on the average daily balance of such Indebtedness for the four
fiscal quarters subject to the pro forma calculation to the extent that such
Indebtedness was incurred solely for working capital purposes.
"Consolidated Depreciation Expense" means, for any Person for any
period, the depreciation expense of such Person and its Restricted Subsidiaries
for such period (to the extent included in the computation of Consolidated Net
Income of such Person), determined on a consolidated basis in accordance with
GAAP.
"Consolidated Income Tax Expense" means, for any Person for any period,
the provision for taxes based on income and profits of such Person and its
Restricted Subsidiaries to the extent such provision for income taxes was
deducted in computing Consolidated Net Income of such Person for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
net of interest income of the Company and its consolidated Restricted
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Subsidiaries (other than interest income of any Captive Insurance Subsidiary
that is a Restricted Subsidiary), plus, to the extent not included in the
calculation of total interest expense, and to the extent incurred by the Company
or its Restricted Subsidiaries, without duplication:
(1) interest expense attributable to Capital Lease Obligations;
(2) amortization of debt discount;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptance financing;
(6) net payments made or received pursuant to Hedging Obligations;
(7) dividends accrued in respect of all Disqualified Stock of the
Company and all Preferred Stock of any Restricted Subsidiary, in each case
held by Persons other than the Company or a Wholly Owned Subsidiary (other
than dividends payable solely in Capital Stock (other than Disqualified
Stock) of the Company); provided, however, that such dividends shall be
multiplied by a fraction the numerator of which is one and the denominator
of which is one minus the effective combined tax rate of the issuer of such
Preferred Stock (expressed as a decimal) for such period (as estimated by
the chief financial officer of the Company in good faith);
(8) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of) the
Company or any Restricted Subsidiary; and
(9) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4) below, the
Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period
to the Company or a Restricted Subsidiary as a dividend or other
8
distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in clause
(3) below); and
(B) the Company's equity in a net loss of any such Person for such
period shall be included in determining such Consolidated Net Income to
the extent such loss has been funded with cash from the Company or a
Restricted Subsidiary;
(2) any net income (or loss) of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction (or any transaction
accounted for in a manner similar to a pooling of interests) for any period
prior to the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that:
(A) subject to the exclusion contained in clause (4) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause); and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other disposition of
any assets of the Company, its consolidated Subsidiaries or any other Person
(including pursuant to any sale-and-leaseback arrangement) which is not sold
or otherwise disposed of in the ordinary course of business and any gain (or
loss) realized upon the sale or other disposition of any Capital Stock of
any Person;
(5) any net income or net losses from discontinued operations;
(6) extraordinary gains or losses; and
(7) the cumulative effect of a change in accounting principles,
in each case, for such period. Notwithstanding the foregoing, for the purposes
of Section 4.04 only, there shall be excluded from Consolidated Net Income any
repurchases, repayments or redemptions of Investments, proceeds realized on the
sale of Investments or return of capital to the Company or a Restricted
Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or
9
returns increase the amount of Restricted Payments permitted under clause
(a)(3)(D) or (a)(3)(E) of Section 4.04.
"Consolidated Tangible Assets" as of any date means the total assets of
the Company and its Restricted Subsidiaries (excluding any assets that would be
classified as "intangible assets" under GAAP) on a consolidated basis at such
date, as determined in accordance with GAAP, less (i) all write-ups subsequent
to the Issue Date in the book value of any asset owned by the Company or any of
its Restricted Subsidiaries and (ii) Investments in and assets of Unrestricted
Subsidiaries.
"Convertible Preferred Stock" means the Company's Series A Convertible
Perpetual Preferred Stock issued and outstanding on the Issue Date.
"Credit Agreement" means the Credit Agreement dated as of March 10,
2006, by and among the Company, as borrower, JPMorgan Chase Bank, N.A., as
administrative agent and the other lenders and agents party thereto from time to
time, together with the related documents thereto (including the term loans and
revolving loans thereunder, any guarantees and security documents), as amended,
extended, renewed, restated, supplemented or otherwise modified (in whole or in
part, and without limitation as to amount, terms, conditions, covenants and
other provisions) from time to time, and any agreement (and related document)
governing Indebtedness incurred to Refinance, in whole or in part, the
borrowings and commitments then outstanding or permitted to be outstanding under
such Credit Agreement or a successor Credit Agreement, whether by the same or
any other lender or group of lenders (including by means of sales of debt
securities to institutional investors).
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement with respect to currency values.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Noncash Consideration" means noncash consideration received
by the Company or one of its Restricted Subsidiaries in connection with an Asset
Disposition that is designated by the Company as Designated Noncash
Consideration, less the amount of cash or cash equivalents received in
connection with a subsequent sale of such Designated Noncash Consideration,
which cash and cash equivalents shall be considered Net Available Cash received
as of such date and shall be applied pursuant to Section 4.06.
"Determination Date", with respect to an Interest Period, will be the
second London Banking Day preceding the first day of such Interest Period.
"Digital Hospital" means the planned 219-bed acute care hospital
located on Highway 280 in Birmingham, Alabama as replacement for the HealthSouth
Medical Center.
"Digital Hospital Transaction" means any sale or other related
disposition of real property (and any improvements thereon) involving the
Digital Hospital.
10
"Disqualified Stock" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:
(1) matures or is mandatorily redeemable (other than redeemable only
for Capital Stock of such Person which is not itself Disqualified Stock)
pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the occurrence
of certain events or otherwise, in whole or in part;
in each case on or prior to the date that is 91 days after the Stated Maturity
of the Securities; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to purchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
date that is 91 days after the Stated Maturity of the Securities shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are not more favorable to the
holders of such Capital Stock than the terms applicable to the Securities under
Sections 4.06 and 4.08.
The amount of any Disqualified Stock that does not have a fixed
redemption, repayment or repurchase price shall be calculated in accordance with
the terms of such Disqualified Stock as if such Disqualified Stock were
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
however, that if such Disqualified Stock could not be required to be redeemed,
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price shall be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person. The
Convertible Preferred Stock, based on the terms thereof in effect on the Issue
Date, shall not be Disqualified Stock.
"EBITDA" of any Person for any period means Consolidated Net Income of
such Person for such period plus, without duplication, the sum for such Person
of the following to the extent deducted in calculating Consolidated Net Income
for such period:
(1) Consolidated Income Tax Expense,
(2) Consolidated Depreciation Expense,
(3) Consolidated Amortization Expense,
(4) Consolidated Interest Expense,
(5) all other non-cash items or non-recurring non-cash items reducing
Consolidated Net Income of such Person and its Subsidiaries, determined on a
11
consolidated basis in accordance with GAAP (including non-cash charges
incurred as a result of the application of SFAS No. 123R); provided that
cash expenditures made in respect of items to which the charges referred to
in this clause (5) relate in an aggregate amount in excess of $10,000,000
for any period of four consecutive fiscal quarters shall be deducted in
determining EBITDA for the period during which such expenditures are made,
(6) any restructuring charges in respect of legal fees associated with
the government, class-action and shareholder derivative litigation described
in the Company's Report on Form 10-K for the fiscal year ended December 31,
2005,
(7) fees, costs and expenses related to the Recapitalization
Transactions,
(8) any losses from discontinued operations and closed locations,
(9) costs and expenses related to the settlement of the Shareholder
Litigation, and
(10) charges in respect of professional fees for reconstruction and
restatement of financial statements (including matters related to internal
controls and documentation) that relate to the fiscal years ended December
31, 2000, 2001, 2002, 2003, 2004 and 2005 and the fiscal quarters occurring
during such fiscal years,
in each case determined on a consolidated basis in accordance with GAAP, less
all unusual non-cash items or non-recurring non-cash items to the extent
increasing Consolidated Net Income of such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, in each case for
such period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and non-cash charges
of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute
EBITDA only to the extent (and in the same proportion, including by reason of
minority interests) that the net income or loss of such Restricted Subsidiary
was included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.
"Eligible Indebtedness" means any Indebtedness other than:
(1) Indebtedness in the form of, or represented by, bonds (other than
surety bonds, indemnity bonds, performance bonds or bonds of a similar
nature) or other securities or any Guarantee thereof; and
(2) Indebtedness that is, or may be, quoted, listed or purchased and
sold on any stock exchange, automated trading system or over-the-counter or
other securities market (including, without prejudice to the generality of
the foregoing, the market for securities eligible for resale pursuant to
Rule 144A under the Securities Act).
12
"Equity Offering" means any public or private sale of Capital Stock
(other than Disqualified Stock) of the Company, other than public offerings with
respect to the Company's common stock registered on Form S-8 under the
Securities Act and other than issuances to any Subsidiary of the Company.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means, with respect to any asset or property, the
price that could be negotiated in an arm's-length, free market transaction, for
cash, between a willing and able buyer and an unaffiliated willing seller,
neither of whom is under undue pressure or compulsion to complete the
transaction, as such price is determined in good faith by (1) the Chief
Financial Officer, the Treasurer or the Chief Accounting Officer of the Company
(unless otherwise provided in this Indenture) for transactions valued at, or
below, $10,000,000, or (2) the Board of Directors of the Company (unless
otherwise provided in this Indenture) for transactions valued in excess of
$10,000,000.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in:
(1) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting Standards
Board;
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in periodic
reports required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
13
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranty Agreement" means a supplemental indenture, in substantially
the form of Exhibit B hereto or another form satisfactory to the Trustee,
pursuant to which a Subsidiary Guarantor guarantees the Company's obligations
with respect to the Securities on the terms provided for in this Indenture.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Restricted Subsidiary. The term "Incurrence"
when used as a noun shall have a correlative meaning. Solely for purposes of
determining compliance with Section 4.03:
(1) amortization of debt discount or the accretion of principal with
respect to a non-interest bearing or other discount security;
(2) the payment of regularly scheduled interest in the form of
additional Indebtedness of the same instrument or the payment of regularly
scheduled dividends on Capital Stock in the form of additional Capital Stock
of the same class and with the same terms; and
(3) the obligation to pay a premium in respect of Indebtedness arising
in connection with the issuance of a notice of redemption or making of a
mandatory offer to purchase such Indebtedness
will not be deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale/Leaseback Transactions entered into by such Person;
14
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person
and all obligations of such Person under any title retention agreement (but
excluding any accounts payable or other liability to trade creditors arising
in the ordinary course of business);
(4) all obligations of such Person for the reimbursement of any obligor
on any letter of credit, bankers' acceptance or similar credit transaction
(other than obligations with respect to letters of credit securing
obligations (other than obligations described in clauses (1) through (3)
above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day
following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of such
Person or, with respect to any Preferred Stock of any Subsidiary of such
Person, the principal amount of such Preferred Stock to be determined in
accordance with this Indenture (but excluding, in each case, any accrued
dividends);
(6) all obligations of the type referred to in clauses (1) through (5)
of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through (6)
of other Persons secured by any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the Fair Market Value of
such property or assets and the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
Notwithstanding the foregoing, in connection with the purchase by the
Company or any Restricted Subsidiary of any business, the term "Indebtedness"
will exclude indemnification, purchase price adjustment, holdback and
contingency payment obligations to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
however, that, at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed and
determined, the amount is paid within 60 days thereafter.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all obligations as described above;
provided, however, that in the case of Indebtedness sold at a discount, the
amount of such Indebtedness at any time will be the accreted value thereof at
such time.
15
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Qualified Party" means an investment banking firm,
accounting firm or appraisal firm of national standing; provided, however, that
such firm is not an Affiliate of the Company.
"Interest Period" means the period commencing on and including an
interest payment date and ending on and including the day immediately preceding
the next succeeding interest payment date, with the exception that the first
Interest Period shall commence on and include the Issue Date and end on and
include December 14, 2006.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement with
respect to exposure to interest rates.
"Interim Loan Agreement" means the Interim Loan Agreement dated as of
March 10, 2006, among the Company, the subsidiary guarantors named therein, the
lenders named therein and the administrative agent named therein.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. If the Company or any Restricted
Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person
that is a Restricted Subsidiary such that, after giving effect thereto, such
Person is no longer a Restricted Subsidiary, any Investment by the Company or
any Restricted Subsidiary in such Person remaining after giving effect thereto
will be deemed to be a new Investment at such time. The acquisition by the
Company or any Restricted Subsidiary of a Person that holds an Investment in a
third Person shall be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person at such time. Except as otherwise
provided for herein, the amount of an Investment shall be its Fair Market Value
at the time the Investment is made and without giving effect to subsequent
changes in value.
For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 4.04:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however, that
upon a redesignation of such Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary equal to an amount (if positive) equal to (A) the
Company's "Investment" in such Subsidiary at the time of such redesignation
less (B) the portion (proportionate to the Company's equity interest in such
16
Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at
the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its Fair Market Value at the time of such transfer.
"Issue Date" means June 14, 2006.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York.
"LIBOR", with respect to an Interest Period, shall be the rate
(expressed as a percentage per annum) for deposits in U.S. dollars for a
six-month period beginning on the second London Banking Day after the
Determination Date that appears on Telerate Page 3750 as of 11:00 a.m., London
time, on the Determination Date. If Telerate Page 3750 does not include such a
rate or is unavailable on a Determination Date, the Calculation Agent shall
request the principal London office of each of four major banks in the London
interbank market, as selected by the Calculation Agent, to provide such bank's
offered quotation (expressed as a percentage per annum), as of approximately
11:00 a.m., London time, on such Determination Date, to prime banks in the
London interbank market for deposits in a Representative Amount of U.S. dollars
for a six-month period beginning on the second London Banking Day after the
Determination Date. If at least two such offered quotations are so provided, the
rate for the Interest Period shall be the arithmetic mean of such quotations. If
fewer than two such quotations are so provided, the Calculation Agent shall
request each of three major banks in New York City, as selected by the
Calculation Agent, to provide such bank's rate (expressed as a percentage per
annum), as of approximately 11:00 a.m., New York City time, on such
Determination Date, for loans in a Representative Amount of U.S. dollars to
leading European banks for a six-month period beginning on the second London
Banking Day after the Determination Date. If at least two such rates are so
provided, the rate for the Interest Period shall be the arithmetic mean of such
rates. If fewer than two such rates are so provided, then the rate of the
Interest Period shall be the rate in effect with respect to the immediately
preceding Interest Period.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"London Banking Day" is any day on which dealings in U.S. dollars are
transacted or, with respect to any future date, are expected to be transacted in
the London interbank market.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor to
its rating agency business.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
17
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other non-cash form), in each case net of:
(1) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred (including legal, accounting and investment
banking fees and commissions), and all Federal, state, provincial, foreign
and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition;
(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and retained
by the Company or any Restricted Subsidiary after such Asset Disposition;
and
(5) any portion of the purchase price from an Asset Disposition placed
in escrow, whether as a reserve for adjustment of the purchase price, for
satisfaction of indemnities in respect of such Asset Disposition or
otherwise in connection with that Asset Disposition; provided, however, that
upon the termination of that escrow, Net Available Cash shall be increased
by any portion of funds in the escrow that are released to the Company or
any Restricted Subsidiary.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock or Indebtedness, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Obligations" means, with respect to any Indebtedness, all obligations
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated June 9, 2006,
and used in connection with the offering of the Original Securities.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Treasurer or the Secretary of the
Company.
18
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that shall, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person if, as a result of such Investment, such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related
Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(6) loans or advances to officers, directors and employees made in the
ordinary course of business of the Company or such Restricted Subsidiary;
(7) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents the non-cash
portion of the consideration received for (A) an Asset Disposition as
permitted pursuant to Section 4.06 or (B) a disposition of assets not
constituting an Asset Disposition;
(9) any Person where such Investment was acquired by the Company or any
of its Restricted Subsidiaries (A) in exchange for any other Investment or
accounts receivable held by the Company or any such Restricted Subsidiary in
connection with or as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other Investment or accounts
receivable or (B) as a result of a foreclosure by the Company or any of its
19
Restricted Subsidiaries with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default;
(10) any Person to the extent such Investments consist of prepaid
expenses, negotiable instruments held for collection and lease, utility and
workers' compensation, performance and other similar deposits made in the
ordinary course of business by the Company or any Restricted Subsidiary;
(11) any Person to the extent such Investments consist of Hedging
Obligations otherwise permitted under Section 4.03;
(12) any Person to the extent such Investment exists on the Issue Date,
and any extension, modification or renewal of any such Investments existing
on the Issue Date, but only to the extent not involving additional advances,
contributions or other Investments of cash or other assets or other
increases thereof (other than as a result of the accrual or accretion of
interest or original issue discount or the issuance of pay-in-kind
securities, in each case, pursuant to the terms of such Investment as in
effect on the Issue Date);
(13) any Person arising from the transfer of assets made pursuant to
the Digital Hospital Transaction;
(14) a Receivables Entity, or any Investment by a Receivables Entity in
any other Person in connection with a Qualified Receivables Transaction,
including Investments of funds held in accounts permitted or required by the
arrangements governing such Qualified Receivables Transaction or any related
Indebtedness; provided, however, that any Investment in a Receivables Entity
is in the form of a purchase money note, contribution of additional
receivables or an equity interest; or
(15) Persons to the extent such Investments, when taken together with
all other Investments made pursuant to this clause (15) and outstanding on
the date such Investment is made, do not exceed 7.5% of Consolidated
Tangible Assets, as determined based on the consolidated balance sheet of
the Company as of the end of the most recent fiscal quarter ending at least
45 days prior thereto.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's compensation
laws, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, performance bonds or
obligations of a like nature or deposits as security for contested taxes or
import duties or for the payment of rent, in each case Incurred in the
ordinary course of business;
20
(2) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect to which such Person
shall then be proceeding with an appeal or other proceedings for review and
Liens arising solely by virtue of any statutory or common law provision
relating to banker's Liens, rights of set-off or similar rights and remedies
as to deposit accounts or other funds maintained with a creditor depository
institution; provided, however, that (A) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations
promulgated by the Federal Reserve Board and (B) such deposit account is not
intended by the Company or any Restricted Subsidiary to provide collateral
to the depository institution;
(3) Liens for taxes, assessments or other governmental charges or
claims, in each case not yet subject to penalties for non-payment or which
are being contested in good faith by appropriate proceedings;
(4) Liens in favor of issuers of surety bonds or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that such letters of
credit do not constitute Indebtedness;
(5) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real property or Liens
incidental to the conduct of the business of such Person or to the ownership
of its properties which were not Incurred in connection with Indebtedness
and which do not in the aggregate materially adversely affect the value of
said properties or materially impair their use in the operation of the
business of such Person;
(6) Liens securing Indebtedness Incurred to finance the construction,
purchase or lease of, or repairs, improvements or additions to, property,
plant or equipment of such Person; provided, however, that the Lien may not
extend to any other property owned by such Person or any of its Restricted
Subsidiaries at the time the Lien is Incurred (other than assets and
property affixed or appurtenant thereto), and the Indebtedness (other than
any interest thereon) secured by the Lien may not be Incurred more than 180
days after the later of the acquisition, completion of construction, repair,
improvement, addition or commencement of full operation of the property
subject to the Lien;
(7) Liens to secure (i) Indebtedness permitted pursuant to Section
4.03(b)(1) and (ii) Attributable Debt in respect of Specified Sale/Leaseback
Transactions; provided, however, that the Liens referred to in this clause
(ii) may not extend to any assets or property other than the assets and
property subject to the Specified Sale/Leaseback Transaction;
(8) Liens existing on the Issue Date (other than Liens referred to in
the foregoing clause (7)(i));
21
(9) Liens on property or shares of Capital Stock of another Person at
the time such other Person becomes a Subsidiary of such Person; provided,
however, that the Liens may not extend to any other property owned by such
Person or any of its Restricted Subsidiaries (other than assets and property
affixed or appurtenant thereto);
(10) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means of a
merger or consolidation with or into such Person or a Subsidiary of such
Person; provided, however, that the Liens may not extend to any other
property owned by such Person or any of its Restricted Subsidiaries (other
than assets and property affixed or appurtenant thereto);
(11) Liens securing Indebtedness or other obligations of a Subsidiary
of such Person owing to such Person or a Wholly Owned Subsidiary of such
Person;
(12) Liens securing Hedging Obligations so long as such Hedging
Obligations are permitted to be Incurred under this Indenture;
(13) any Lien on accounts receivable and related assets of the types
specified in the definition of "Qualified Receivables Transaction" incurred
in connection with a Qualified Receivables Transaction;
(14) Liens in favor of the Company or the Subsidiary Guarantors;
(15) leases, subleases, licenses or sublicenses granted to third
parties entered into in the ordinary course of business which do not
materially interfere with the conduct of the business of the Company and the
Restricted Subsidiaries and which do not secure any Indebtedness;
(16) Liens securing judgments, decrees, orders or awards for the
payment of money not constituting an Event of Default in respect of which
the Company shall in good faith be prosecuting an appeal or proceedings for
review, which appeal or proceedings shall not have been finally terminated,
or in respect of which the period within which such appeal or proceedings
may be initiated shall not have expired;
(17) Liens to secure any Refinancing (or successive Refinancings) as a
whole, or in part, of any Indebtedness secured by any Lien referred to in
the foregoing clause (6), (7)(ii), (8), (9) or (10); provided, however,
that:
(A) such new Lien shall be limited to all or part of the same
property and assets that secured or, under the written agreements
pursuant to which the original Lien arose, could secure the original
Lien (plus improvements and accessions to, such property or proceeds or
distributions thereof); and
(B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (i) the outstanding
principal amount or, if greater, committed amount of the Indebtedness
described under clause (6), (7)(ii), (8), (9) or (10) at the time the
22
original Lien became a Permitted Lien and (ii) an amount necessary to
pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement; and
(18) other Liens securing Indebtedness to the extent such Indebtedness,
when taken together with all other Indebtedness secured by Liens Incurred
pursuant to this clause (18) and outstanding on the date such other Lien is
Incurred, does not exceed 5% of Consolidated Tangible Assets, as determined
based on the consolidated balance sheet of the Company as of the end of the
most recent fiscal quarter ending at least 45 days prior thereto.
Notwithstanding the foregoing, "Permitted Liens" will not include any
Lien described in clause (6), (9) or (10) above to the extent such Lien applies
to any Additional Assets acquired directly or indirectly from Net Available Cash
pursuant to Section 4.06. For purposes of this definition, the term
"Indebtedness" shall be deemed to include interest on such Indebtedness.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs that were
(1) directly attributable to an asset acquisition and calculated on a
basis that is consistent with Regulation S-X under the Securities Act in
effect and applied as of the Issue Date, or
(2) implemented by the business that was the subject of any such asset
acquisition within the six months prior to or following the date of the
asset acquisition and that are supportable and quantifiable by the
underlying accounting records of such business,
as if, in the case of each of clause (1) and (2), all such reductions in costs
had been effected as of the beginning of such period.
23
"Purchase Money Indebtedness" means Indebtedness (1) consisting of the
deferred purchase price of property, conditional sale obligations, obligations
under any title retention agreement, other purchase money obligations and
obligations in respect of industrial revenue bonds or similar Indebtedness, in
each case where the maturity of such Indebtedness does not exceed the
anticipated useful life of the asset being financed, and (2) Incurred to finance
the acquisition by the Company or a Restricted Subsidiary of such asset,
including additions and improvements, in the ordinary course of business,
provided, however, that any Lien arising in connection with any such
Indebtedness shall be limited to the specific asset being financed or, in the
case of real property or fixtures, including additions and improvements, the
real property on which such asset is attached; provided, further, however, that
such Indebtedness is Incurred within 180 days after such acquisition of such
assets.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to:
(1) a Receivables Entity (in the case of a transfer by the Company or
any of its Restricted Subsidiaries) or
(2) any other Person (in the case of a transfer by a Receivables
Entity),
or may grant a security interest in, any accounts receivable (whether now
existing or arising in the future) of the Company or any of its Restricted
Subsidiaries, and any assets related thereto, including all collateral securing
such accounts receivable, all contracts and all Guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts receivable and
other assets which are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable; provided, however, that the
financing terms, covenants, termination events and other provisions thereof
shall be market terms (as determined in good faith by the chief financial
officer of the Company).
The grant of a security interest in any accounts receivable of the
Company or any of its Restricted Subsidiaries to secure Indebtedness permitted
pursuant to Section 4.03(b)(1) shall not be deemed a Qualified Receivables
Transaction.
"Quotation Agent" means one of the Reference Treasury Dealers selected
by the Company.
"Receivables Entity" means (a) a Wholly Owned Subsidiary of the Company
that is designated by the Board of Directors (as provided below) as a
Receivables Entity or (b) another Person engaging in a Qualified Receivables
Transaction with the Company, which Person engages in the business of the
financing of accounts receivable, and in either of clause (a) or (b):
24
(1) no portion of the Indebtedness or any other obligations (contingent
or otherwise) of such entity
(A) is Guaranteed by the Company or any Subsidiary of the Company
(excluding Guarantees of obligations (other than the principal of, and
interest on, Indebtedness) pursuant to Standard Securitization
Undertakings),
(B) is recourse to or obligates the Company or any Subsidiary of
the Company in any way (other than pursuant to Standard Securitization
Undertakings), or
(C) subjects any property or asset of the Company or any
Subsidiary of the Company, directly or indirectly, contingently or
otherwise, to the satisfaction thereof (other than pursuant to Standard
Securitization Undertakings);
(2) the entity is not an Affiliate of the Company or is an entity with
which neither the Company nor any Subsidiary of the Company has any material
contract, agreement, arrangement or understanding other than on terms that
the Company reasonably believes to be no less favorable to the Company or
such Subsidiary than those that might be obtained at the time from Persons
that are not Affiliates of the Company; and
(3) is an entity to which neither the Company nor any Subsidiary of the
Company has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating
results.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Reference Treasury Dealer" means each of Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated, Citigroup Global Markets Inc. and X.X. Xxxxxx Securities
Inc. and their respective successors and assigns.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the Company by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day immediately preceding such redemption date.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, purchase, redeem, defease or retire, or to
issue other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
25
"Recapitalization Transactions" means the offering of Convertible
Preferred Stock completed on or about March 7, 2006, the borrowing of loans
under the Interim Loan Agreement and the Credit Agreement on March 10, 2006, and
the use of the proceeds thereof to (A) complete the tender offer for the
Company's then-existing senior notes and senior subordinated notes and (B)
prepay the loans under, and terminate, the Company's then-existing senior
secured credit agreement, senior subordinated credit agreement and term loan
agreement.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no earlier than
the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater than the
Average Life of the Indebtedness being Refinanced;
(3) such Refinancing Indebtedness has an aggregate principal amount (or
if Incurred with original issue discount, an aggregate issue price) that is
equal to or less than the aggregate principal amount (or if Incurred with
original issue discount, the aggregate accreted value) then outstanding
(plus fees and expenses, including any premium and defeasance costs) under
the Indebtedness being Refinanced; and
(4) if the Indebtedness being Refinanced is subordinated in right of
payment to the Securities, such Refinancing Indebtedness is subordinated in
right of payment to the Securities at least to the same extent as the
Indebtedness being Refinanced;
provided, further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that is not a Subsidiary Guarantor that Refinances
Indebtedness of the Company or a Subsidiary Guarantor or (B) Indebtedness of the
Company or a Restricted Subsidiary that Refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business in which the Company or any of
the Restricted Subsidiaries was engaged on the Issue Date and any business
related, ancillary or complementary to such business.
"Representative Amount" means a principal amount of not less than
$1,000,000 for a single transaction in the relevant market at the relevant time.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its Capital
26
Stock (other than (A) dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock), (B) dividends or
distributions payable solely to the Company or a Restricted Subsidiary and
(C) pro rata dividends or other distributions made by a Subsidiary that is
not a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other than
a corporation));
(2) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of any Capital Stock of the Company held
by any Person (other than by a Restricted Subsidiary) or of any Capital
Stock of a Restricted Subsidiary held by any Affiliate of the Company (other
than by a Restricted Subsidiary), including in connection with any merger or
consolidation and including the exercise of any option to exchange any
Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment of any Subordinated Obligations
of the Company or any Subsidiary Guarantor (other than (A) from the Company
or a Restricted Subsidiary or (B) the purchase, repurchase, redemption,
defeasance or other acquisition or retirement of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date
of such purchase, repurchase, redemption, defeasance or other acquisition or
retirement); or
(4) the making of any Investment (other than a Permitted Investment) in
any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is not
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter
acquired by the Company or a Restricted Subsidiary whereby the Company or a
Restricted Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person, other than leases between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Senior Indebtedness" means with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the Issue Date
or thereafter Incurred; and
27
(2) all other Obligations of such Person (including interest accruing
on or after the filing of any petition in bankruptcy or for reorganization
relating to such Person whether or not post-filing interest is allowed in
such proceeding) in respect of Indebtedness described in clause (1) above
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such Indebtedness or other obligations are subordinate in right of payment
to the Securities or the Subsidiary Guaranty of such Person, as the case may be;
provided, however, that Senior Indebtedness shall not include:
(A) any obligation of such Person to the Company or any
Subsidiary;
(B) any liability for Federal, state, local or other taxes owed or
owing by such Person;
(C) any accounts payable or other liability to trade creditors
arising in the ordinary course of business;
(D) any Indebtedness or other Obligation of such Person which is
subordinate or junior in any respect to any other Indebtedness or other
Obligation of such Person; or
(E) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Shareholder Litigation" means the federal securities class actions and
the derivative actions brought against the Company and/or certain of its former
directors and officers and certain other parties in the United States District
Court for the Northern District of Alabama and the Circuit Court in Jefferson
County, Alabama relating to financial reporting and related activity that
occurred at the Company during periods ended in March 2003.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Specified Property" means the real property and improvements thereon
for (a) rehabilitation hospitals in Fredericksburg, Virginia; Sarasota, Florida
and Petersburg, Virginia, (b) long-term acute care facilities in Sarasota,
Florida; Huntsville, Alabama; Kansas City, Missouri; Tucson, Arizona and
Charlottesville, Virginia and (c) surgery centers in Des Moines, Iowa and
Joliet, Illinois, in each case under construction or anticipated to be
constructed as of the Issue Date.
"Specified Sale/Leaseback Transaction" means (A) a Sale/Leaseback
Transaction consisting of a sale or other transfer of (i) a Specified Property
or (ii) any other real property and improvements thereon identified after the
Issue Date prior to the acquisition or construction thereof by written notice
from the Company to the Trustee (which notice shall also contain a reasonably
28
detailed summary of the construction and other improvements that the Company
intends to make on the applicable real property), in each case to a real estate
investment trust or other Person within 180 days after completion of all
principal construction and improvements thereon and the simultaneous lease of
such property by such real estate investment trust or other Person to the
Company or a Restricted Subsidiary and (B) a Sale/Leaseback Transaction that is
a Birmingham Hospital Transaction.
"Standard & Poor's" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc., and any successor to its rating agency business.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company that, taken as a whole, are customary in an accounts
receivable transaction.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or a Subsidiary Guaranty of such Person, as the case may be, pursuant to a
written agreement to that effect.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such Person; or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Subsidiary of the Company that
executes this Indenture as a guarantor on the Issue Date and each other
Subsidiary of the Company that thereafter guarantees the Securities pursuant to
the terms of this Indenture.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to the Securities.
"Syndication" means the sale of partnership or other equity interests
in Subsidiaries of the Company or other Persons controlled by the Company that
own or operate surgery, diagnostic or other health care facilities to (i)
participating physicians, radiologists and other specialists, (ii) professional
corporations and other legal entities owned or controlled by such participating
physicians, radiologists and other specialists and (iii) participating hospitals
29
and other health care providers. For purposes of this definition, "controlled"
shall have the meaning set forth in the definition of "Affiliate."
"Telerate Page 3750" means the display designated as "Page 3750" on the
Moneyline Telerate service (or such other page as may replace Page 3750 on that
service).
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United States
of America or any agency thereof;
(2) investments in demand and time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any State thereof or any
foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $250,000,000 (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization
(as defined in Rule 436 under the Securities Act) or any money-market fund
sponsored by a registered broker dealer or mutual fund distributor;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
(4) investments in commercial paper, maturing not more than 270 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Moody's or "A-1" (or
higher) according to Standard and Poor's;
(5) investments in securities issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's or "A2" by Moody's;
(6) eligible banker's acceptances, repurchase agreements and tax-exempt
municipal bonds having a maturity of less than one year, in each case having
a rating of, or evidencing the full recourse obligation of a person whose
senior debt is rated, at least "A" by Standard & Poor's and at least "A2" by
Moody's; and
(7) investments in money market funds that invest substantially all
their assets in securities of the types described in clauses (1) through (6)
above.
30
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the Issue Date.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"2016 Exchange Securities" means the "Exchange Securities" (as such
term is used and defined in the 2016 Securities Indenture) excluding any
"Additional Securities" (as such term is used and defined in the 2016 Securities
Indenture).
"2016 Securities" means the Company's 10.75% Senior Notes due 2016.
"2016 Securities Indenture" means the Indenture dated as of June 14,
2006, among the Company, the Subsidiary Guarantors and the Trustee, relating to
the 2016 Securities.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital
Stock or Indebtedness of, or holds any Lien on any property of, the Company or
any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.04.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation (A) the Company could Incur $1.00 of additional Indebtedness
under Section 4.03(a) and (B) no Default shall have occurred and be continuing.
Any such designation by the Board of Directors shall be evidenced to the Trustee
by promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
31
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares) is owned by the Company
or one or more other Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Term Defined in
---- Section
----------
"Affiliate Transaction"....................................... 4.07(a)
"Appendix".................................................... Preamble
"Bankruptcy Law".............................................. 6.01
"Change of Control Offer"..................................... 4.08(b)
"covenant defeasance option".................................. 8.01(b)
"Custodian"................................................... 6.01
"Definitive Securities"....................................... Appendix A
"Event of Default"............................................ 6.01
"Exchange Securities"......................................... Preamble
"Global Securities"........................................... Appendix A
"Guaranteed Obligations"...................................... 10.01
"Initial Lien"................................................ Preamble
"Initial Securities".......................................... 4.09
"legal defeasance option"..................................... 8.01(b)
"Offer"....................................................... 4.06(b)
"Offer Amount"................................................ 4.06(c)
"Offer Period"................................................ 4.06(c)
"Original Securities"......................................... Preamble
"Paying Agent"................................................ 2.03
"Private Exchange"............................................ Appendix A
"Private Exchange Securities"................................. Appendix A
"Purchase Date"............................................... 4.06(c)
"Registration Rights Agreement"............................... Appendix A
"Registered Exchange Offer"................................... Appendix A
"Registrar"................................................... 2.03
"Securities".................................................. Preamble
32
Term Defined in
---- Section
----------
"Securities Custodian"........................................ Appendix A
"Successor Company"........................................... 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Subsidiary
Guaranties.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Subsidiary
Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
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(g) secured Indebtedness shall not be deemed to be subordinate or
junior to any other secured Indebtedness merely because it has a junior
priority with respect to the same collateral;
(h) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(i) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
(j) all references to the date the Securities were originally issued
shall refer to the Issue Date.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Appendix, which is hereby incorporated in and expressly made a part
of this Indenture. The Initial Securities and the Trustee's certificate of
authentication thereto, shall be substantially in the form of Exhibit 1 to the
Appendix, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities, the Private Exchange Securities and the
Trustee's certificate of authentication thereto shall be substantially in the
form of Exhibit A, which is hereby incorporated in and expressly made a part of
this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The Securities shall be issuable only in
registered form without interest coupons and only in denominations of $1,000 and
integral multiples thereof. The terms of the Securities set forth in the
Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall sign the
Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
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The Trustee shall authenticate and make available for delivery
Securities as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
On the Issue Date, the Trustee shall authenticate and deliver
$375,000,000 of Floating Rate Senior Notes Due 2014 and, at any time and from
time to time thereafter, the Trustee shall authenticate and deliver Securities
for original issue in an aggregate principal amount specified in such order, in
each case upon a written order of the Company signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated and, in the case of an issuance of Additional Securities pursuant
to Section 2.13 after the Issue Date, shall certify that such issuance is in
compliance with Section 4.03.
SECTION 2.03. Registrar and Paying Agent; Calculation Agent. (a) The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent"). The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent, and the term "Registrar" includes any co-registrars. The Company
initially appoints the Trustee as (i) Registrar and Paying Agent in connection
with the Securities, (ii) the Securities Custodian with respect to the Global
Securities and (iii) Calculation Agent.
(b) The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent, Calculation Agent or co-registrar not a party to
this Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent. The
Company shall notify the Trustee of the name and address of any such agent. If
the Company fails to maintain a Registrar, Paying Agent or Calculation Agent,
the Trustee shall, to the extent that it is capable, act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.
(c) The Company may remove any Registrar, Paying Agent or Calculation
Agent upon written notice to such Registrar, Paying Agent or Calculation Agent
and to the Trustee; provided, however, that no such removal shall become
effective until (i) acceptance of an appointment by a successor as evidenced by
an appropriate agreement entered into by the Company and such successor
Registrar, Paying Agent or Calculation Agent, as the case may be, and delivered
to the Trustee or (ii) notification to the Trustee that the Trustee shall serve
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as Registrar, Paying Agent or Calculation Agent until the appointment of a
successor in accordance with clause (i) above.
SECTION 2.04. Paying Agent to Hold Money in Trust. Prior to 10:00 a.m.,
New York City time, on each due date of the principal of and interest on any
Security, the Company shall deposit with the Paying Agent (or if the Company or
a Wholly Owned Subsidiary is acting as Paying Agent, segregate and hold in trust
for the benefit of the Persons entitled thereto) a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal of and interest on the Securities,
and shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.05. Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee, in writing at least five Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer and in compliance with the Appendix. When a
Security is presented to the Registrar or a co-registrar with a request to
register a transfer, the Registrar shall register the transfer as requested if
the requirements of this Indenture and Section 8-401(1) of the Uniform
Commercial Code are met. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met.
To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Securities at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.06, 4.08 and 9.05). The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Securities selected for redemption in accordance with the terms of this
Indenture (except, in the case of Securities to be redeemed in part, the portion
thereof not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment
date.
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Prior to the due presentation for registration of transfer of any
Security, the Company, the Subsidiary Guarantors, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the Person in whose name a
Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and (subject to paragraph 2 of the Securities)
interest, if any, on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, any Subsidiary
Guarantor, the Trustee, the Paying Agent or the Registrar shall be affected by
notice to the contrary.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture shall evidence the same debt and shall be entitled to
the same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss that any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this Section
as not outstanding. Subject to Section 11.06, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser (as defined in
Section 8-303 of the Uniform Commercial Code).
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities. In the event that Definitive
Securities are to be issued under the terms of this Indenture, until such
Definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
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delay, the Company shall prepare and the Trustee shall authenticate Definitive
Securities and deliver them in exchange for temporary Securities upon surrender
of such temporary Securities at the office or agency of the Company, without
charge to the Holder.
SECTION 2.10. Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and shall deliver a certificate of such destruction to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancelation. The Trustee shall not
authenticate Securities in place of canceled Securities other than pursuant to
the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, the Company shall pay the defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the Persons who are
Holders on a subsequent special record date. The Company shall fix or cause to
be fixed any such special record date and payment date and, at least 10 days
before such special record date, shall mail or cause to be mailed to each
Holder, with a copy to the Trustee, a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers and ISINs. The Company in issuing the
Securities may use "CUSIP" numbers, ISINs and "Common Code" numbers (in each
case if then generally in use) and, if so, the Trustee shall use "CUSIP"
numbers, ISINs and "Common Code" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall advise the Trustee in writing of any
change in any "CUSIP" numbers, ISINs or "Common Code" numbers applicable to the
Securities.
SECTION 2.13. Issuance of Additional Securities. After the Issue Date,
the Company shall be entitled, subject to its compliance with Section 4.03, to
issue Additional Securities under this Indenture, which Securities shall have
identical terms as the Initial Securities issued on the Issue Date, other than
with respect to the date of issuance and issue price, first payment of interest
and rights under the Registration Rights Agreement dated June 14, 2006. All the
Securities issued under this Indenture shall be treated as a single class for
all purposes of this Indenture, including waivers, amendments, redemptions and
offers to purchase.
With respect to any Additional Securities, the Company shall set forth
in a resolution of the Board of Directors and an Officers' Certificate, a copy
of each of which shall be delivered to the Trustee, the following information:
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(1) the aggregate principal amount of such Additional Securities to be
authenticated and delivered pursuant to this Indenture and the provision of
Section 4.03 that the Company is relying on to issue such Additional
Securities;
(2) the issue price, the issue date, the CUSIP number and the ISIN of
such Additional Securities; provided, however, that no Additional Securities
may be issued at a price that would cause such Additional Securities to have
"original issue discount" within the meaning of Section 1273 of the Code;
and
(3) whether such Additional Securities shall be Initial Securities or
shall be issued in the form of Exchange Securities as set forth in Exhibit
A.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of Securities
to be redeemed.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein. Any such notice of redemption may be canceled at any time
prior to such notice being mailed to any Holder and, upon such cancelation,
shall be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed on a pro rata basis to the extent practicable. The Trustee shall make
the selection from outstanding Securities not previously called for redemption.
The Trustee may select for redemption portions of the principal amount of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in principal amounts of $1,000 or a whole
multiple of $1,000. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
39
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
(7) the CUSIP number or ISIN, if any, printed on the Securities being
redeemed; and
(8) that no representation is made as to the correctness or accuracy of
the CUSIP number, ISIN or "Common Code" number, if any, listed in such
notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed to Holders, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date), and such Securities
shall be canceled by the Trustee. Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice to any other
Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m., New
York City time, on the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the redemption
price of and accrued interest on all Securities or portions thereof to be
redeemed on that date other than Securities or portions of Securities called for
redemption that have been delivered by the Company to the Trustee for
cancelation. On and after the redemption date, interest shall cease to accrue on
Securities or portions thereof called for redemption so long as the Company has
deposited with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary
is the Paying Agent, shall segregate and hold in trust) funds sufficient to pay
the principal of, plus accrued and unpaid interest on, the Securities to be
redeemed.
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SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Whether or not the Company is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the SEC (subject to the next sentence), and provide the Trustee
and Holders with, such annual and other reports as are specified in Sections 13
and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to
such Sections, such reports to be so filed and provided at the times specified
for the filings of such reports under such Sections and containing all the
information, audit reports and exhibits required for such reports. If, at any
time, the Company is not subject to the periodic reporting requirements of the
Exchange Act for any reason, the Company shall nevertheless continue filing the
reports specified in the preceding sentence with the SEC within the time periods
required unless the SEC will not accept such a filing. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely on Officer's Certificates). The
Company agrees that it shall not take any action for the purpose of causing the
SEC not to accept such filings. If, notwithstanding the foregoing, the SEC will
not accept such filings for any reason, the Company shall post the reports
specified in the preceding sentence on its website within the time periods that
would apply if the Company were required to file such reports with the SEC. At
any time that any of the Company's Subsidiaries are Unrestricted Subsidiaries,
the quarterly and annual financial information required by this paragraph shall
include a reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, and in "Management's Discussion and
Analysis of Financial Condition and Results of Operations", of the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
41
In addition, at any time when the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall furnish to the Holders of the Securities and to prospective investors,
upon the requests of such Holders, any information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act so long as the Securities
are not freely transferable under the Securities Act. The Company also shall
comply with the other provisions of Section 314(a) of the TIA.
SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company and the
Subsidiary Guarantors shall be entitled to Incur Indebtedness if, on the date of
such Incurrence and after giving effect thereto on a pro forma basis the
Consolidated Coverage Ratio exceeds 2.0 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company and the
Restricted Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Agreement; provided,
however, that, immediately after giving effect to any such Incurrence, the
aggregate principal amount of all Indebtedness Incurred under this clause
(1) and then outstanding does not exceed $2,550,000,000 less the sum of all
principal payments with respect to such Indebtedness made pursuant to
Section 4.06(a)(3)(A) and in satisfaction of Section 4.06;
(2) Indebtedness owed to and held by the Company or a Restricted
Subsidiary; provided, however, that (A) any subsequent issuance or transfer
of any Capital Stock that results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or a Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness by
the obligor thereon, (B) if the Company is the obligor on such Indebtedness,
such Indebtedness is expressly subordinated to the prior payment in full in
cash of all obligations with respect to the Securities, and (C) if a
Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness
is expressly subordinated to the prior payment in full in cash of all
obligations of such Subsidiary Guarantor with respect to its Subsidiary
Guaranty;
(3) (i) the Initial Securities and the Exchange Securities (excluding
any Additional Securities) and (ii) the 2016 Securities issued on the Issue
Date under the 2016 Securities Indenture and the 2016 Exchange Securities;
(4) Indebtedness outstanding on the Issue Date (other than Indebtedness
described in clause (1), (2) or (3) of this Section 4.03(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on
or prior to the date on which such Subsidiary was acquired by the Company
(other than Indebtedness Incurred in connection with, or to provide all or
any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary became a Subsidiary or was acquired by the Company); provided,
42
however, that on the date of such acquisition and after giving pro forma
effect thereto, the Company would have been entitled to Incur at least $1.00
of additional Indebtedness pursuant to Section 4.03(a);
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to clause (3), (4) or (5) or this
clause (6) of this Section 4.03(b);
(7) Hedging Obligations directly related to Indebtedness permitted to
be Incurred by the Company and its Restricted Subsidiaries pursuant to this
Indenture or entered into in the ordinary course of business and not for
speculative purposes;
(8) obligations in respect of performance, bid and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
in the ordinary course of business;
(9) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within three Business Days of its
Incurrence;
(10) Indebtedness consisting of the Subsidiary Guaranty of a Subsidiary
Guarantor and any Guarantee by the Company or a Subsidiary Guarantor of
Indebtedness or other obligations of the Company or any Restricted
Subsidiary (other than Indebtedness Incurred pursuant to clause (5) of this
Section 4.03(b)) so long as the Incurrence of such Indebtedness or other
obligations by the Company or such Restricted Subsidiary is permitted under
the terms of this Indenture;
(11) (A) Purchase Money Indebtedness, (B) Capital Lease Obligations and
(C) Attributable Debt, and Refinancing Indebtedness in respect thereof, in
an aggregate principal amount on the date of Incurrence that, when added to
all other Indebtedness Incurred pursuant to this clause (11) and then
outstanding, does not exceed 10% of Consolidated Tangible Assets, as
determined based on the consolidated balance sheet of the Company as of the
end of the most recent fiscal quarter ending at least 45 days prior thereto;
(12) Attributable Debt, and Refinancing Indebtedness in respect
thereof, in respect of Specified Sale/Leaseback Transactions in an aggregate
principal amount on the date of Incurrence that, when added to all other
Indebtedness Incurred pursuant to this clause (12) and then outstanding,
does not exceed 10% of Consolidated Tangible Assets, as determined based on
the consolidated balance sheet of the Company as of the end of the most
recent fiscal quarter ending at least 45 days prior thereto;
(13) Indebtedness Incurred by a Receivables Entity in a Qualified
Receivables Transaction;
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(14) Preferred Stock issued by any Restricted Subsidiary formed to
operate a single health care facility; provided that the amount of such
Preferred Stock, when added to the aggregate amount of all other such
Preferred Stock of Restricted Subsidiaries then outstanding, does not exceed
1% of Consolidated Tangible Assets, as determined based on the consolidated
balance sheet of the Company as of the end of the most recent fiscal quarter
ending at least 45 days prior thereto; and
(15) Indebtedness of the Company or of any of its Restricted
Subsidiaries in an aggregate principal amount that, when taken together with
all other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness
permitted by clauses (1) through (14) of this Section 4.03(b) or by Section
4.03(a)) does not exceed $125,000,000.
(c) Notwithstanding the foregoing, neither the Company nor any
Subsidiary Guarantor shall incur any Indebtedness pursuant to Section 4.03(b) if
the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of the Company or any Subsidiary Guarantor unless such
Indebtedness shall be subordinated to the Securities or the applicable
Subsidiary Guaranty to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section 4.03:
(1) all Indebtedness outstanding under the Credit Agreement on the
Issue Date shall be treated as Incurred under clause (b)(1) of this Section
4.03;
(2) in the event that an item of Indebtedness (or any portion thereof)
meets the criteria of more than one of the types of Indebtedness described
above, the Company, in its sole discretion, shall classify such item of
Indebtedness (or any portion thereof) at the time of Incurrence and shall
only be required to include the amount and type of such Indebtedness in one
of the above clauses (provided that any Indebtedness originally classified
as Incurred pursuant to any of clauses (b)(2) through (b)(15) of this
Section 4.03 may later be reclassified as having been Incurred pursuant to
paragraph (a) or any other of clauses (b)(2) through (b)(15) of this Section
4.03 to the extent that such reclassified Indebtedness could be Incurred
pursuant to paragraph (a) or one of clauses (b)(2) through (b)(15) of this
Section 4.03, as the case may be, if it were Incurred at the time of such
reclassification); and
(3) the Company shall be entitled to divide and classify an item of
Indebtedness in more than one of the types of Indebtedness described above.
SECTION 4.04. Limitation on Restricted Payments. (a) The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to
make a Restricted Payment if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
44
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the Issue
Date occurs to the end of the most recent fiscal quarter ending at
least 45 days prior to the date of such Restricted Payment (or, in case
such Consolidated Net Income shall be a deficit, minus 100% of such
deficit); plus
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an
issuance or sale to a Subsidiary of the Company and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit
of their employees) and 100% of any cash capital contribution received
by the Company from its shareholders subsequent to the Issue Date; plus
(C) the amount by which Indebtedness of the Company is reduced on
the Company's balance sheet upon the conversion or exchange subsequent
to the Issue Date of any Indebtedness of the Company convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the
Company (less the amount of any cash, or the fair value of any other
property, distributed by the Company upon such conversion or exchange);
provided, however, that the foregoing amount shall not exceed the Net
Cash Proceeds received by the Company or any Restricted Subsidiary from
the sale of such Indebtedness (excluding Net Cash Proceeds from sales
to a Subsidiary of the Company or to an employee stock ownership plan
or to a trust established by the Company or any of its Subsidiaries for
the benefit of their employees); plus
(D) an amount equal to the net reduction in the Investments (other
than Permitted Investments) made by the Company or any Restricted
Subsidiary in any Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds realized on
the sale of such Investment and proceeds representing the return of
capital (excluding dividends and distributions), in each case received
by the Company or any Restricted Subsidiary; provided, however, that
the foregoing sum shall not exceed, in the case of any such Person, the
amount of Investments (excluding Permitted Investments) previously made
(and treated as a Restricted Payment) by the Company or any Restricted
Subsidiary in such Person; plus
(E) in the case of the redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary, the portion (proportionate to the Company's
equity interest in such Subsidiary) of the Fair Market Value of the net
45
assets of such Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is redesignated as a Restricted Subsidiary, except to the
extent that the Investment in such Unrestricted Subsidiary was made by
the Company or a Restricted Subsidiary pursuant to Section 4.04(b)(10)
or to the extent that such Investment constituted a Permitted
Investment; plus
(F) $50,000,000.
(b) The preceding provisions shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made by exchange for, Capital Stock of
the Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee stock ownership
plan or to a trust established by the Company or any of its Subsidiaries for
the benefit of their employees) or a substantially concurrent cash capital
contribution received by the Company from its shareholders; provided,
however, that (A) such Restricted Payment shall be excluded from the
calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale or such cash capital contribution (to the extent so
used for such Restricted Payment) shall be excluded in the calculation of
amounts under Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or a Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent Incurrence of, Indebtedness of such
Person that is permitted to be Incurred pursuant to Section 4.03; provided,
however, that such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the calculation of
the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of declaration thereof
if at such date of declaration such dividend would have complied with this
Section 4.04; provided, however, that such dividend shall be included in the
calculation of the amount of Restricted Payments;
(4) so long as no Default has occurred and is continuing, the purchase,
redemption or other acquisition of shares of Capital Stock of the Company or
any of its Subsidiaries from employees, former employees, directors or
former directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including employment
agreements) or plans (or amendments thereto) approved or ratified by the
Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such Capital Stock;
provided, however, that the aggregate amount of such Restricted Payments
(excluding amounts representing cancelation of Indebtedness) shall not
exceed $5,000,000 in any calendar year (provided that (A) if the Company and
its Restricted Subsidiaries make less than $5,000,000 in the aggregate of
46
such Restricted Payments in any calendar year, the unused amount for such
calendar year may be carried over to the next succeeding calendar year (but
not any other calendar year thereafter) and (B) the amount payable in any
calendar year may be increased by an amount up to the sum of (i) the amount
of cash proceeds from the sale of Capital Stock (other than Disqualified
Stock) of the Company to employees, former employees, directors or former
directors of the Company or any of its Subsidiaries, to the extent that the
cash proceeds from the sale of such Capital Stock have not otherwise been
applied to the payment of Restricted Payments by virtue of Section
4.04(a)(3)(B), plus (ii) the cash proceeds of key man life insurance
policies received by the Company or its Restricted Subsidiaries after the
Issue Date, less (iii) the amount of repurchases and other acquisitions
previously made with the cash proceeds described in clauses (i) and (ii)
above); provided, further, however, that (x) such repurchases and other
acquisitions shall be excluded in the calculation of the amount of
Restricted Payments and (y) cash proceeds referred to in clause (B)(i) above
used to make Restricted Payments under this Section 4.04(b)(4) shall be
excluded from the calculation of amounts under Section 4.04(a)(3)(B);
(5) (A) the declaration and payment of dividends on the Convertible
Preferred Stock, and other cash payments at any time to reduce any accretion
in the liquidation preference resulting from previously unpaid dividends on
the Convertible Preferred Stock, in each case in accordance with the terms
thereof in effect on the Issue Date and (B) the declaration and payments of
dividends on Disqualified Stock issued pursuant to Section 4.03; provided,
however, in each case, that at the time of payment of such dividend or other
cash payment, no Default shall have occurred and be continuing (or result
therefrom); provided, further, however, that dividends and cash payments
referred to in this clause (5) shall be excluded in the calculation of the
amount of Restricted Payments;
(6) repurchases of Capital Stock deemed to occur upon exercise of stock
options if such Capital Stock represents a portion of the exercise price of
such options; provided, however, that such Restricted Payments shall be
excluded in the calculation of the amount of Restricted Payments;
(7) cash payments in lieu of the issuance of fractional shares in
connection with the exercise of warrants, options or other securities
convertible into or exchangeable for Capital Stock of the Company; provided,
however, that any such cash payment shall not be for the purpose of evading
the limitation of this Section 4.04; provided, further, however, that such
payments shall be excluded in the calculation of the amount of Restricted
Payments;
(8) in the event of a Change of Control, and if no Default shall have
occurred and be continuing, the payment, purchase, redemption, defeasance or
other acquisition or retirement of Subordinated Obligations of the Company
or any Subsidiary Guarantor, in each case, at a purchase price not greater
than 101% of the principal amount of such Subordinated Obligations, plus any
accrued and unpaid interest thereon; provided, however, that prior to such
payment, purchase, redemption, defeasance or other acquisition or
47
retirement, the Company (or a third party to the extent permitted by this
Indenture) has made a Change of Control Offer with respect to the Securities
as a result of such Change of Control and has repurchased all Securities
validly tendered and not withdrawn in connection with such Change of Control
Offer; provided, further, however, that such payments, purchases,
redemptions, defeasances or other acquisitions or retirements shall be
excluded in the calculation of the amount of Restricted Payments;
(9) payments of intercompany subordinated Indebtedness, the Incurrence
of which was permitted under Section 4.03(b)(2); provided, however, that no
Default has occurred and is continuing or would otherwise result therefrom;
provided, further, however, that such payments shall be excluded in the
calculation of the amount of Restricted Payments; or
(10) Restricted Payments in an amount that, when taken together with
all Restricted Payments made pursuant to this clause (10), does not exceed
$50,000,000; provided, however, that (A) at the time of each such Restricted
Payment, no Default shall have occurred and be continuing (or result
therefrom) and (B) such Restricted Payments shall be excluded in the
calculation of the amount of Restricted Payments.
The amount of any Restricted Payment that is not made in cash shall be
determined in a manner consistent with the determination of the amount of an
Investment as set forth in the final sentence of the first paragraph of the
definition of "Investment".
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c),
(A) any encumbrance or restriction pursuant to applicable law,
rule, regulation or order or an agreement in effect at or entered into
on the Issue Date;
(B) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary on or prior to the date on which
such Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by
the Company) and outstanding on such date;
48
(C) any encumbrance or restriction pursuant to any amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing of the agreement referred to in clauses (A)
and (B) above; provided, however, that such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing is no more restrictive, as reasonably determined by the
Company, with respect to such encumbrances and other restrictions taken
as a whole than those prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement or
refinancing;
(D) any encumbrance or restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition;
(E) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business;
(F) any limitation or prohibition on the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements,
which limitation or prohibition is applicable only to the assets that
are the subject of such agreements;
(G) any encumbrance or restriction existing under or by reason of
contractual requirements of a Receivables Entity in connection with a
Qualified Receivables Transaction, provided that such restrictions
apply only to such Receivables Entity; and
(2) with respect to clause (c) only,
(A) any encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests to the
extent such provisions restrict the transfer of the lease or the
property leased thereunder; and
(B) any encumbrance or restriction contained in Capital Lease
Obligations, any agreement governing Purchase Money Indebtedness,
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the
transfer of the property subject to such Capital Lease Obligations,
Purchase Money Indebtedness, security agreements or mortgages.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless:
49
(1) the Company or such Restricted Subsidiary receives consideration at
the time of such Asset Disposition at least equal to the Fair Market Value
(including as to the value of all non-cash consideration) of the shares and
assets subject to such Asset Disposition;
(2) at least 75% of the consideration thereof received by the Company
or such Restricted Subsidiary is in the form of cash or cash equivalents;
provided, however, that this clause (2) shall not apply to the sale or other
disposition of the Company's diagnostic division; and
(3) an amount equal to 100% of the Net Available Cash from such Asset
Disposition, other than any Asset Disposition that constitutes (i) a
Syndication or a resyndication transaction in the ordinary course of
business or (ii) a Specified Sale/Leaseback Transaction, is applied by the
Company (or such Restricted Subsidiary, as the case may be)
(A) to the extent the Company elects (or is required by the terms
of any Indebtedness), to prepay, repay, redeem or purchase Senior
Indebtedness of the Company or a Subsidiary Guarantor or Indebtedness
(other than any Disqualified Stock) of a Restricted Subsidiary that is
not a Subsidiary Guarantor (in each case other than Indebtedness owed
to the Company or an Affiliate of the Company) within one year from the
later of the date of such Asset Disposition or the receipt of such Net
Available Cash;
(B) to the extent the Company elects (including with respect to
the balance of such Net Available Cash after application (if any) in
accordance with clause (A)), to acquire Additional Assets within one
year from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; and
(C) to the extent of the balance of such Net Available Cash after
application (if any) in accordance with clauses (A) and (B), to make an
offer to the Holders of the Securities (and to holders of other Senior
Indebtedness of the Company designated by the Company) to purchase
Securities (and such other Senior Indebtedness of the Company) pursuant
to and subject to the conditions contained in this Indenture;
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness made to satisfy clause (A) or (C) above, the Company or such
Restricted Subsidiary shall permanently retire such Indebtedness and shall cause
the related loan commitment (if any) to be permanently reduced in an amount
equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section 4.06 except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which is not
applied in accordance with this Section 4.06 exceeds $20,000,000. Pending
50
application of Net Available Cash pursuant to this Section 4.06, such Net
Available Cash shall be invested in Temporary Cash Investments or applied to
temporarily reduce revolving credit indebtedness.
For the purposes of this Section 4.06, the following are deemed to be
cash or cash equivalents:
(1) the assumption or discharge of any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in
the footnotes thereto) of the Company or such Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Securities)
that are assumed by the transferee of such assets and for which the Company
and all of the Restricted Subsidiaries have been released by all creditors
in writing;
(2) securities received by the Company or any Restricted Subsidiary
from the transferee that are converted by the Company or such Restricted
Subsidiary within 180 days into cash, to the extent of cash received in that
conversion;
(3) all Temporary Cash Investments; and
(4) any Designated Noncash Consideration having an aggregate Fair
Market Value that, when taken together with all other Designated Noncash
Consideration previously received and then outstanding, does not exceed at
the time of the receipt of such Designated Noncash Consideration (with the
Fair Market Value of each item of Designated Noncash Consideration being
measured at the time received and without giving effect to subsequent
changes in value) $30,000,000.
(b) In the event of an Asset Disposition that requires the purchase of
Securities (and other Senior Indebtedness of the Company) pursuant to Section
4.06(a)(3)(C), the Company shall purchase Securities tendered pursuant to an
offer by the Company for the Securities (and such other Senior Indebtedness)
(the "Offer") at a purchase price of 100% of their principal amount (or, in the
event such other Senior Indebtedness of the Company was issued with significant
original issue discount, 100% of the accreted value thereof) without premium,
plus accrued but unpaid interest (or, in respect of such other Senior
Indebtedness of the Company, such lesser price, if any, as may be provided for
by the terms of such Senior Indebtedness) in accordance with the procedures
(including prorating in the event of oversubscription) set forth in this
Indenture. If the aggregate purchase price of the securities tendered pursuant
to the Offer exceeds the Net Available Cash allotted to their purchase, the
Company shall select the securities to be purchased on a pro rata basis but in
round denominations, which in the case of the Securities will be denominations
of $1,000 principal amount or multiples thereof. The Company shall not be
required to make such an Offer to purchase Securities (and other Senior
Indebtedness of the Company) pursuant to this Section 4.06 if the Net Available
Cash available therefor is less than $20,000,000 (which lesser amount shall be
carried forward for purposes of determining whether such an offer is required
with respect to the Net Available Cash from any subsequent Asset Disposition).
Upon completion of such an Offer, Net Available Cash shall be deemed to be
reduced by the aggregate amount of such Offer.
51
(c) (i) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as described in Section 4.06(b) in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal amount
at the applicable purchase price. The notice shall specify a purchase date not
less than 30 days nor more than 60 days after the date of such notice (the
"Purchase Date").
(ii) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (A) the amount of the Offer (the "Offer
Amount"), including information as to any other Senior Indebtedness included in
the Offer for repurchase, (B) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (C) the
compliance of such allocation with the provisions of Section 4.06(a). By 11:00
a.m. New York City time on the Purchase Date, the Company shall irrevocably
deposit with the Trustee or with a Paying Agent (or, if the Company or a Wholly
Owned Subsidiary is acting as Paying Agent, segregate and hold in trust) an
amount equal to the Offer Amount to be held for payment in accordance with the
provisions of this Section. Upon the expiration of the period for which the
Offer remains open (the "Offer Period"), the Company shall deliver to the
Trustee for cancelation the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee (or the
Paying Agent, if not the Trustee) shall, on the Purchase Date, mail or deliver
payment (or cause the delivery of payment) to each tendering Holder in the
amount of the purchase price. In the event that the aggregate purchase price of
the Securities delivered by the Company to the Trustee is less than the Offer
Amount applicable to the Securities, the Trustee shall deliver the excess to the
Company immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
(iii) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. A Holder shall be entitled to withdraw its election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of such Holder, the principal amount of the Security that was delivered for
purchase by such Holder and a statement that such Holder is withdrawing its
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(iv) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
52
Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue of its
compliance with such securities laws or regulations.
SECTION 4.07. Limitation on Transactions with Affiliates. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained at
the time of the Affiliate Transaction in arm's-length dealings with a Person
who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in excess of
$10,000,000, the terms of the Affiliate Transaction are set forth in writing
and a majority of the non-employee directors of the Company disinterested
with respect to such Affiliate Transaction have determined in good faith
that the criteria set forth in clause (1) are satisfied and have approved
the relevant Affiliate Transaction as evidenced by a resolution of the Board
of Directors; and
(3) if such Affiliate Transaction involves an amount in excess of
$50,000,000, the Board of Directors shall also have received a written
opinion from an Independent Qualified Party to the effect that such
Affiliate Transaction is fair, from a financial standpoint, to the Company
and its Restricted Subsidiaries or is not less favorable to the Company and
its Restricted Subsidiaries than could reasonably be expected to be obtained
at the time in an arm's-length transaction with a Person who was not an
Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit:
(1) any Investment (other than a Permitted Investment) or other
Restricted Payment, in each case permitted to be made pursuant to Section
4.04;
(2) any employment or consulting agreement, employee benefit plan,
officer or director indemnification agreement or any similar arrangement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business or approved by the Board of Directors, and
payments pursuant thereto;
(3) loans or advances to employees in the ordinary course of business
of the Company or its Restricted Subsidiaries, but in any event not to
exceed $10,000,000 in the aggregate outstanding at any one time;
53
(4) the payment of reasonable fees or other reasonable compensation to,
or the provision of customary benefits or indemnification arrangements to,
directors of the Company and its Restricted Subsidiaries;
(5) any transaction with the Company, a Restricted Subsidiary or any
Person that would constitute an Affiliate Transaction solely because the
Company or a Restricted Subsidiary owns an equity interest in or otherwise
controls such Restricted Subsidiary or Person;
(6) the issuance or sale of any Capital Stock (other than Disqualified
Stock) of the Company;
(7) any agreement as in effect on the Issue Date and described in the
Offering Memorandum or any renewals or extensions of any such agreement (so
long as such renewals or extensions are not less favorable in any material
respect to the Company or the Restricted Subsidiaries) and the transactions
evidenced thereby;
(8) the provision of services to directors or officers of the Company
or any of its Restricted Subsidiaries of the nature provided by the Company
or any of its Restricted Subsidiaries to customers in the ordinary course of
business; and
(9) transactions effected as a part of a Qualified Receivables
Transaction.
SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change of
Control, each Holder shall have the right to require that the Company purchase
all or any part of such Holder's Securities at a purchase price in cash equal to
101% of the principal amount thereof on the date of purchase plus accrued and
unpaid interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in accordance with Section 4.08(b).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee (the "Change of Control
Offer") stating:
(i) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof on the
date of purchase, plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record
date to receive interest on the relevant interest payment date);
(ii) the circumstances and relevant facts and financial information
regarding such Change of Control;
(iii) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
54
(iv) the instructions, as determined by the Company, consistent with
this Section 4.08, that a Holder must follow in order to have its Securities
purchased.
(c) The Company shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.08. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.08, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.08 by virtue
thereof.
(e) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
(f) On the purchase date, all Securities purchased by the Company under
this Section 4.08 shall be delivered by the Company to the Trustee for
cancelation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
SECTION 4.09. Limitation on Liens. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to
exist any Lien (the "Initial Lien") of any nature whatsoever on any of its
properties (including Capital Stock of a Restricted Subsidiary), whether owned
at the Issue Date or thereafter acquired, securing any Indebtedness, other than
Permitted Liens, without effectively providing that the Securities shall be
secured equally and ratably with (or prior to) the obligations so secured for so
long as such obligations are so secured.
Any Lien created for the benefit of the Holders of the Securities
pursuant to the preceding sentence shall provide by its terms that such Lien
shall be automatically and unconditionally released and discharged upon the
release and discharge of the Initial Lien.
SECTION 4.10. Limitation on Sale/Leaseback Transactions. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless:
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(1) the Company or such Restricted Subsidiary would be entitled to (A)
Incur Indebtedness in an amount equal to the Attributable Debt with respect
to such Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a
Lien on such property securing such Attributable Debt without equally and
ratably securing the Securities pursuant to Section 4.09;
(2) the gross proceeds received by the Company or any Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are at least
equal to the Fair Market Value of such property; and
(3) the Company applies the proceeds of such transaction in compliance
with Section 4.06.
SECTION 4.11. Future Guarantors. The Company shall cause each
Restricted Subsidiary that (a) Guarantees any Indebtedness of the Company or any
Subsidiary Guarantor (other than Indebtedness permitted to be Incurred pursuant
to clause (2), (8) or (9) of Section 4.03(b)) or (b) Incurs any Indebtedness
other than Eligible Indebtedness, to, at the same time, execute and deliver to
the Trustee a Guaranty Agreement pursuant to which such Restricted Subsidiary
will Guarantee payment of the Securities on the same terms and conditions as
those set forth in Article X of this Indenture.
SECTION 4.12. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.13. Further Instruments and Acts. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, directly or indirectly,
all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia
56
and the Successor Company (if not the Company) shall expressly assume, by a
supplemental indenture hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under
the Securities and this Indenture;
(2) immediately after giving pro forma effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary thereof as a result of such transaction as having
been Incurred by the Successor Company or such Subsidiary at the time of
such transaction), no Default shall have occurred and be continuing;
(3) immediately after giving pro forma effect to such transaction, (A)
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a) or (B) the Consolidated Coverage
Ratio for the Successor Company would be greater than such ratio for the
Company and its Restricted Subsidiaries immediately prior to such
transaction; and
(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture,
provided, however, that clause (3) shall not be applicable to (A) a Restricted
Subsidiary consolidating with, merging into or transferring all or part of its
properties and assets to the Company (so long as no Capital Stock of the Company
is distributed to any Person) or (B) the Company merging with an Affiliate of
the Company solely for the purpose and with the sole effect of reincorporating
the Company in another jurisdiction.
For purposes of this Section 5.01, the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, and the predecessor Company, except in the
case of a lease, shall be released from the obligation to pay the principal of
and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:
(1) except in the case of a Subsidiary Guarantor (x) that has been
disposed of in its entirety to another Person (other than to the Company or
an Affiliate of the Company), whether through a merger, consolidation or
sale of Capital Stock or assets or (y) that, as a result of the disposition
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of all or a portion of its Capital Stock, ceases to be a Subsidiary of the
Company, in both cases, if in connection therewith the Company provides an
Officers' Certificate to the Trustee to the effect that the Company will
comply with its obligations under Section 4.06 in respect of such
disposition, the resulting, surviving or transferee Person (if not such
Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was organized or under the laws of
the United States of America, or any State thereof or the District of
Columbia, and such Person shall expressly assume, by a Guaranty Agreement,
in a form satisfactory to the Trustee, all the obligations of such
Subsidiary, if any, under its Subsidiary Guaranty;
(2) immediately after giving effect to such transaction or transactions
on a pro forma basis (and treating any Indebtedness which becomes an
obligation of the resulting, surviving or transferee Person as a result of
such transaction as having been issued by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and
(3) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such Guaranty Agreement, if any, complies with this Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company (A) defaults in the payment of principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon declaration of acceleration or otherwise or (B)
fails to purchase Securities when required pursuant to this Indenture or the
Securities;
(3) the Company fails to comply with Section 5.01;
(4) the Company or any Subsidiary Guarantor fails to comply with any of
its agreements contained in the Securities or this Indenture (other than
those referred to in (1), (2) or (3) above) and such failure continues for
60 days after the notice from the Trustee or the Holders specified below;
(5) Indebtedness of the Company, any Subsidiary Guarantor or any
Significant Subsidiary is not paid within any applicable grace period after
final maturity or is accelerated by the holders thereof because of a default
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and the total amount of such Indebtedness unpaid or accelerated exceeds
$50,000,000 or its foreign currency equivalent at the time;
(6) the Company, any Subsidiary Guarantor or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company, any Subsidiary Guarantor or
any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company, any Subsidiary Guarantor
or any Significant Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the Company, any
Subsidiary Guarantor or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(8) any judgment or decree for the payment of money in excess of
$50,000,000 (or its foreign currency equivalent at the time) is entered
against the Company, any Subsidiary Guarantor or any Significant Subsidiary,
remains outstanding for a period of 60 consecutive days following the entry
of such judgment or decree and is not discharged, waived or effectively
stayed; or
(9) any Subsidiary Guaranty ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty) or any
Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guaranty.
The foregoing shall constitute Events of Default whatever the reason for any
such Event of Default and whether such Event of Default is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
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However, a default under clause (4) will not constitute an Event of
Default until the Trustee or the Holders of 25% in principal amount of the
outstanding Securities notify the Company of the default and the Company does
not cure such default within the time specified after receipt of such notice.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (5) or (9) and any event which with the giving
of notice or the lapse of time or both would become an Event of Default under
clause (4) or (8), its status and what action the Company is taking or proposes
to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 6.01(6) or (7) with respect to the Company)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities, by notice to the Company, may
declare the principal of and accrued but unpaid interest on all the Securities
to be due and payable. Upon such a declaration, such principal and interest
shall be due and payable immediately. If an Event of Default specified in
Section 6.01(6) or (7) with respect to the Company occurs, the principal of and
interest on all the Securities shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holders. The Holders of a majority in principal amount of the Securities by
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Securities pursuant to the
optional redemption provisions hereof, an equivalent premium shall also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the Securities.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
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waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (a) a Default in the payment of the
principal of or interest on a Security, (b) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(c) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Holder affected. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action under this Section, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no Holder
may pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the outstanding
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the outstanding
Securities do not give the Trustee a direction inconsistent with the request
during such 60-day period.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder. In the event
that the Definitive Securities are not issued to any beneficial owner promptly
after the Registrar has received a request from the Holder of a Global Security
to issue such Definitive Securities to such beneficial owner or its nominee, the
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Company expressly agrees and acknowledges, with respect to the right of any
Holder to pursue a remedy pursuant to this Indenture, the right of such
beneficial holder of Securities to pursue such remedy with respect to the
portion of the Global Security that represents such beneficial holder's
Securities as if such Definitive Securities had been issued.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount then due and
owing (together with interest on overdue principal and (to the extent lawful) on
any unpaid interest at the rate provided for in the Securities) and the amounts
provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section. At least 15 days before such record date, the
Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
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SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company nor
any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Subsidiary Guarantor (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
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(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall be
fully protected and shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents, attorneys, custodians or
nominees and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
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(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture, or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and if the Trustee shall determine in good faith to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the
Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.
(g) In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
such investment prior to its Stated Maturity or the failure of the party
directing such investment to provide timely written investment direction. The
Trustee shall have no obligation to invest or reinvest any amounts held
hereunder in the absence of specific written investment direction.
(h) The rights, privileges, immunities and protections afforded to the
Trustee in such capacity pursuant to this Indenture (including, without
limitation, the right to be indemnified) shall also be afforded to the Trustee
in each of its other capacities hereunder.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.
(j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company or any Subsidiary Guarantor in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs, is continuing
and is known to the Trustee, the Trustee shall mail to each Holder notice of the
Default within 90 days after it occurs. Except in the case of a Default in
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payment of principal of or interest on any Security, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as practicable
after each June 1 beginning with the June 1 following the date of this
Indenture, and in any event prior to June 15 in each year, the Trustee shall
mail to each Holder a brief report dated as of such June 1 that complies with
Section 313(a) of the TIA. The Trustee shall also comply with Section 313(b) of
the TIA.
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange (if any) on which the Securities are
listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants,
custodians, nominees and experts. The Company and each Subsidiary Guarantor,
jointly and severally, shall indemnify the Trustee and its officers, directors,
employees and agents and any predecessor Trustee and its officers, directors,
employees and agents for, and hold it or them harmless against, any and all
loss, liability or expense (including reasonable attorneys' fees) incurred by it
in connection with the administration of this trust and the performance of its
duties under this Indenture and any other documents and transactions in
connection therewith including the reasonable costs and expenses of defending
itself against any claim (whether asserted by the Company, any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its or their powers or duties hereunder (including, without limitation,
settlement costs, provided any settlement with respect to which indemnification
is sought shall have been consented to by the Company), except to the extent any
such loss, liability or expenses may be attributable to its own negligence, bad
faith or willful misconduct. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company or any Subsidiary Guarantor of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
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The Company's payment obligations pursuant to this Section shall
survive the resignation or removal of the Trustee and the discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(6) or (7) with respect to the Company, the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
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further act shall be the successor Trustee if such successor corporation is
eligible and qualified under Section 7.10.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of Section 310(a) of the TIA. The Trustee,
together with its parent entity, shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with Section 310(b) of the TIA; provided,
however, that there shall be excluded from the operation of Section 310(b)(1) of
the TIA any indenture or indentures under which other securities or certificates
of interest or participation in other securities of the Company are outstanding
if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA
are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (1) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof and the Company irrevocably deposits with the Trustee funds in
an amount sufficient, or U.S. Government Obligations the principal of and
interest on which will be sufficient, or a combination thereof sufficient, to
pay at maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than Securities
replaced pursuant to Section 2.07), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent set forth herein relating to the satisfaction and
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discharge of this Indenture have been satisfied, and at the cost and expense of
the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and the operation of Sections
6.01(5), 6.01(6), 6.01(7) and 6.01(8) (but, in the case of Sections 6.01(6) and
(7), with respect to Subsidiary Guarantors and Significant Subsidiaries only)
and the limitations contained in Section 5.01(a)(3) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.01(5), 6.01(6), 6.01(7) or 6.01(8) (but, in the case of Sections
6.01(6) and (7), with respect to Subsidiary Guarantors and Significant
Subsidiaries only) or because of the failure of the Company to comply with
Section 5.01(a)(3). If the Company exercises its legal defeasance option or its
covenant defeasance option, each Subsidiary Guarantor, if any, shall be released
from all of its obligations with respect to its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money or
U.S. Government Obligations, or a combination thereof, for the payment of
the principal of and interest on the Securities to redemption or maturity,
as the case may be;
(2) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal of and interest when due on all the Securities
to maturity or redemption, as the case may be;
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(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(6) or (7) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other agreement
binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (B) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article 8
have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
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Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's and each Subsidiary
Guarantor's obligations under this Indenture, each Subsidiary Guarantee and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of principal of or interest on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in place
of certificated Securities; provided, however, that the uncertificated
Securities are issued in registered form for purposes of Section 163(f) of
the Code or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities, including any
Subsidiary Guaranties, or to secure the Securities;
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(5) to add to the covenants of the Company or a Subsidiary Guarantor
for the benefit of the Holders or to surrender any right or power herein
conferred upon the Company or a Subsidiary Guarantor;
(6) to make any change that does not adversely affect the rights of any
Holder;
(7) to conform the text of this Indenture or the Securities to any
provision of the "Description of the Notes" section of the Offering
Memorandum to the extent that such provision of the "Description of the
Notes" section of the Offering Memorandum was intended to be a verbatim
recitation of a provision of this Indenture or the Securities;
(8) to comply with any requirement of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(9) to make any amendment to the provisions of this Indenture relating
to the transfer and legending of Securities; provided, however, that (A)
compliance with this Indenture as so amended would not result in Securities
being transferred in violation of the Securities Act or any other applicable
securities law and (B) such amendment does not materially and adversely
affect the rights of Holders to transfer Securities.
After an amendment under this Section 9.01 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.01.
SECTION 9.02. With Consent of Holders. (a) The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in connection with a
purchase of, or tender offer or exchange for, the Securities) and any past
Default or compliance with any provisions may also be waived with the consent of
the Holders of at least a majority in principal amount of the Securities then
outstanding. Notwithstanding the foregoing, without the consent of each Holder
affected thereby, an amendment or waiver may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or change the Stated Maturity of any
Security;
(4) (i) reduce the amount payable upon the redemption of any Security
or (ii) change the time at which any Security may be redeemed, in each case
in accordance with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
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(6) impair the right of any Holder of the Securities to receive payment
of principal of and interest on such Holder's Securities on or after the due
dates therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder's Securities;
(7) make any change in the amendment provisions that require each
Holder's consent or in the waiver provisions;
(8) make any change in the ranking or priority of any Security that
would adversely affect the Securityholders; or
(9) make any change in, or release other than in accordance with this
Indenture, any Subsidiary Guaranty that would adversely affect the
Securityholders.
(b) It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date on which the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Holder. An amendment
or waiver becomes effective upon execution of such amendment or waiver by the
Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
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SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to all Holders and is paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
ARTICLE 10
Subsidiary Guaranties
SECTION 10.01. Guaranties. (a) Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Guaranteed
Obligations"). Each Subsidiary Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under this Article 10 notwithstanding any extension or renewal
of any Obligation.
(b) Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Guaranteed Obligations and
also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Guaranteed Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by (1)
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the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person (including
any Subsidiary Guarantor) under this Indenture, the Securities or any other
agreement or otherwise; (2) any extension or renewal of any thereof; (3) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Securities or any other agreement; (4) the release of any
security held by any Holder or the Trustee for the Guaranteed Obligations or any
of them; (5) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations; or (6) except
as set forth in Section 10.06, any change in the ownership of such Subsidiary
Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.
(c) Except as expressly set forth in Sections 8.01(b), 10.02, 10.05 and
10.06, the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
(d) Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein shall continue to be effective or be reinstated, as the case may
be, if at any time payment, or any part thereof, of principal of or interest on
any Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
(e) In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (A) the unpaid amount of such Guaranteed Obligations, (B) accrued
and unpaid interest on such Guaranteed Obligations (but only to the extent not
prohibited by law) and (C) all other monetary Guaranteed Obligations of the
Company to the Holders and the Trustee.
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(f) Each Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in respect of any Obligations guaranteed hereby until
payment in full of all Obligations. Each Subsidiary Guarantor further agrees
that, as between it, on the one hand, and the Holders and the Trustee, on the
other hand, (A) the maturity of the Guaranteed Obligations guaranteed hereby may
be accelerated as provided in Article 6 for the purposes of any Subsidiary
Guaranty herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Guaranteed Obligations guaranteed
hereby, and (B) in the event of any declaration of acceleration of such
Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Subsidiary Guarantor for the purposes of this Section 10.01.
(g) Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section 10.01.
SECTION 10.02. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 10.03. Successors and Assigns. This Article 10 shall be binding
upon each Subsidiary Guarantor and its successors and assigns and shall inure to
the benefit of the successors and assigns of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 10 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 10 at law,
in equity, by statute or otherwise.
SECTION 10.05. Modification. No modification, amendment or waiver of
any provision of this Article 10, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
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SECTION 10.06. Release of Subsidiary Guarantor. A Subsidiary Guarantor
will be released from its obligations under this Article 10 (other than any
obligation that may have arisen under Section 10.08)
(1) upon the sale or other disposition (including by way of
consolidation or merger) of such Subsidiary Guarantor, including the sale or
disposition of Capital Stock of such Subsidiary Guarantor, following which
such Subsidiary Guarantor is no longer a Subsidiary of the Company; or
(2) upon the sale or disposition of all or substantially all of the
assets of such Subsidiary Guarantor;
in each case other than to the Company or an Affiliate of the Company and as
permitted by this Indenture and if in connection therewith the Company provides
an Officers' Certificate to the Trustee to the effect that the Company will
comply with its obligations under Section 4.06 in respect of such disposition.
Upon any sale or disposition described in clause (1) or (2) above, the obligor
on the related Subsidiary Guaranty will be released from its obligations
thereunder. The Subsidiary Guaranty of a Subsidiary Guarantor also shall be
released:
(3) upon the designation of such Subsidiary Guarantor as an
Unrestricted Subsidiary in accordance with the terms of this Indenture;
(4) at such time as (A) any Guarantee by such Subsidiary Guarantor of
the obligations under the Credit Agreement and any other Guarantee that
resulted in (or would by itself require) the creation of such Subsidiary
Guaranty under this Indenture has been released and discharged, except a
discharge or release by or as a result of payment under such Guarantee, or
(B) such Subsidiary Guarantor does not have any Indebtedness outstanding
that resulted in (or would by itself require) the creation of such
Subsidiary Guaranty under this Indenture; or
(5) if the Company exercises its legal defeasance option or its
covenant defeasance option as described in Article 8 or if the Company's
obligations under this Indenture are discharged in accordance with the terms
of this Indenture.
At the request of the Company, the Trustee shall execute and deliver an
appropriate instrument evidencing such release.
SECTION 10.07. Contribution. Each Subsidiary Guarantor that makes a
payment under its Subsidiary Guaranty shall be entitled upon payment in full of
all Guaranteed Obligations under this Indenture to a contribution from each
other Subsidiary Guarantor in an amount equal to such other Subsidiary
Guarantor's pro rata portion of such payment based on the respective net assets
of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.
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ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.02. Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:
if to the Company or any Subsidiary Guarantor, to it at:
Xxx XxxxxxXxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Fax: (000) 000-0000
if to the Trustee:
The Bank of Nova Scotia Trust Company of New York
Xxx Xxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention of: Corporate Trust Office
Fax: (000) 000-0000
The Company, any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed,
first-class mail, to the Holder at the Holder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders. Holders may
communicate pursuant to Section 312(b) of the TIA with other Holders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of Section
312(c) of the TIA.
SECTION 11.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
78
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(a) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or any Subsidiary
Guarantor or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any Subsidiary
Guarantor shall be disregarded and deemed not to be outstanding, except that,
for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which the Trustee
knows are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 11.08. Legal Holidays. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
79
SECTION 11.09. Governing Law. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the state of New
York.
SECTION 11.10. No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Company or any Subsidiary Guarantor
shall have any liability for any obligations of the Company or any Subsidiary
Guarantor under the Securities, any Subsidiary Guaranty or this Indenture or for
any claim based on, in respect of, or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 11.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
80
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
HEALTHSOUTH CORPORATION,
By: /s/ XXX XXXXXXX
-----------------------------------
Name: Xxx Xxxxxxx
Title: President and Chief Executive
Officer
EACH CORPORATION SET FORTH ON
ANNEX I HERETO
By: /s/ XXX XXXXXXX
------------------------------------
Name: Xxx Xxxxxxx
Title: President
Annex I
-------
--------------------------------------------------------------------------------
Advantage Health Corporation
Advantage Health Harmarville Rehabilitation Corporation
ASC Network Corporation
Baton Rouge Rehab, Inc.
CMS Development and Management Company, Inc.
CMS Jonesboro Rehabilitation, Inc
Continental Medical of Arizona, Inc.
Continental Medical Systems, Inc.
Continental Rehabilitation Hospital of Arizona, Inc.
Diagnostic Health Corporation
HEALTHSOUTH Holdings, Inc.
HEALTHSOUTH LTAC of Sarasota, Inc.
HEALTHSOUTH Medical Center, Inc.
HEALTHSOUTH of Altoona, Inc.
HEALTHSOUTH of Austin, Inc.
HEALTHSOUTH of Charleston, Inc.
HEALTHSOUTH of Dothan, Inc.
HEALTHSOUTH of East Tennessee, Inc.
HEALTHSOUTH of Erie, Inc.
HEALTHSOUTH of Fort Xxxxx, Inc.
HEALTHSOUTH of Xxxxxxxxx, Inc.
HEALTHSOUTH of Houston, Inc.
HEALTHSOUTH of Mechanicsburg, Inc.
HEALTHSOUTH of Midland, Inc.
HEALTHSOUTH of Xxxxxxxxxx, Inc.
HEALTHSOUTH of Nittany Valley, Inc.
HEALTHSOUTH of Pittsburgh, Inc.
HEALTHSOUTH of Reading, Inc.
HEALTHSOUTH of San Antonio, Inc.
HEALTHSOUTH of South Carolina, Inc.
HEALTHSOUTH of Spring Hill, Inc.
HEALTH SOUTH of Texarkana, Inc.
HEALTH SOUTH of Texas, Inc.
HEALTH SOUTH of Toms River, Inc.
HEALTHSOUTH of Treasure Coast, Inc.
HEALTH SOUTH of Utah, Inc.
HEALTH SOUTH of York, Inc.
HEALTHSOUTH of Yuma, Inc.
HEALTHSOUTH Properties Corporation
HEALTHSOUTH Real Property Holding Corporation
HEALTHSOUTH Rehabilitation Center, Inc.
HEALTHSOUTH S.C. of Scottsdale-Xxxx Road, Inc.
HEALTHSOUTH Specialty Hospital, Inc.
HEALTHSOUTH Sub-Acute Center of Mechanicsburg, Inc.
HEALTHSOUTH Surgery Centers-West, Inc.
HEALTHSOUTH Surgery Center of Fairfield, Inc.
HEALTHSOUTH Surgical Center of Tuscaloosa, Inc.
Kansas Rehabilitation Hospital, Inc.
National Imaging Affiliates, Inc.
National Surgery Centers, Inc.
New England Rehabilitation Management Co., Inc.
North Louisiana Rehabilitation Center, Inc.
NSC Houston, Inc.
Pacific Rehabilitation & Sports Medicine, Inc.
Rebound, Inc.
Rehab Concepts Corp.
Rehabilitation Hospital Corporation of America, Inc.
Rehabilitation Hospital of Colorado Springs, Inc.
Rehabilitation Hospital of Nevada - Las Vegas, Inc.
Rehabilitation Hospital of Plano, Inc.
SelectRehab, Inc.
Sherwood Rehabilitation Hospital, Inc.
Surgery Center Holding Corporation
Surgical Care Affiliates, Inc.
Surgical Health Corporation
Surgicare of Huntsville, Inc.
Tarrant County Rehabilitation Hospital, Inc.
Terre Haute Rehabilitation Hospital, Inc.
Tyler Rehabilitation Hospital, Inc.
Western Neuro Care, Inc.
Chiron, Inc.
HEALTHSOUTH Diagnostic Centers, Inc.
HEALTHSOUTH of New Mexico, Inc.
HEALTHSOUTH S.C. of Portland, Inc.
HSC of Beaumont, Inc.
HVPG of California, Inc.
Lakeland Physicians Medical Building, Inc.
Lakeshore System Services of Florida, Inc.
Little Rock-SC, Inc.
National Imaging Affiliates of Fayetteville, Inc.
Neuro Imaging Institute, Inc.
New England Rehabilitation Hospital, Inc.
NSC Connecticut, Inc.
NSC Seattle, Inc.
SCA-Roseland, Inc.
SCA-Shelby Development Corp.
Surgicare of Laguna Hills, Inc.
Collin County Rehab Associates Limited
Partnership
By: Rehabilitation Hospital of Plano,
Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Bakersfield Rehabilitation
Hospital Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Diagnostic Center of
Colorado Springs Limited Partnership
By: Diagnostic Health Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Diagnostic Centers of
Tennessee Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Diagnostic Centers of Texas
Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Meridian Point
Rehabilitation Hospital Limited
Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Northern Kentucky
Rehabilitation Hospital Limited
Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Largo Limited Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Fort Lauderdale Limited
Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Ohio Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Sarasota Limited
Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH of Tallahassee Limited
Partnership
By: HEALTHSOUTH Real Property Holding
Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Rehabilitation Center of
New Hampshire, Ltd.
By: HEALTHSOUTH Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Rehabilitation Hospital of
Arlington Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Rehabilitation Institute of
Tucson Limited Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
HEALTHSOUTH Valley of the Sun
Rehabilitation Hospital Limited
Partnership
By: HEALTHSOUTH Properties Corporation
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
Rehabilitation Hospital of Nevada-Las
Vegas, L.P.
By: Rehabilitation Hospital of Nevada-
Las Vegas, Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
Sarasota LTAC Properties, LLC
By: HEALTHSOUTH Corporation
Its: Member
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
Southern Arizona Regional
Rehabilitation Hospital, L.P.
By: Continental Rehabilitation Hospital
of Arizona, Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
Terre Haute Regional Rehabilitation
Hospital, L.P.
By: Terre Haute Rehabilitation
Hospital, Inc.
Its: General Partner
By: /s/ XXX XXXXXXX
-------------------------------
Xxx Xxxxxxx, its President
THE BANK OF NOVA SCOTIA TRUST COMPANY OF
NEW YORK, as Trustee
by /s/ XXXX X. XXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Trust Officer
RULE 144A/REGULATION S APPENDIX
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
------------------------------------------
PRIVATE EXCHANGE SECURITIES
---------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository for such a
Temporary Regulation S Global Security, to the extent applicable to such
transaction and as in effect from time to time.
"Definitive Security" means a certificated Initial Security or
Exchange Security or Private Exchange Security bearing, if required, the
appropriate restricted securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Distribution Compliance Period", with respect to any
Securities, means the period of 40 consecutive days beginning on and including
the later of (i) the day on which such Securities are first offered to Persons
other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the issue date with respect to such
Securities.
"Exchange Securities" means (1) the Floating Rate Senior Notes
Due 2014 issued pursuant to the Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration statement filed with the
SEC under the Securities Act.
"IAI" means an institutional "accredited investor", as defined
in Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act.
"Initial Purchasers" means Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, Citigroup Global Markets Inc., X.X. Xxxxxx Securities Inc.,
Deutsche Bank Securities Inc., Xxxxxxx, Xxxxx & Co. and Wachovia Capital
Markets, LLC.
"Initial Securities" means (1) $375,000,000 aggregate
principal amount of Floating Rate Senior Notes Due 2014 issued on the Issue Date
and (2) Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
2
"Private Exchange" means the offer by the Company, pursuant to
a Registration Rights Agreement, to the Initial Purchasers to issue and deliver
to each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any Floating Rate Senior
Notes Due 2014 issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated June 9, 2006,
among the Company and the Initial Purchasers, and (2) with respect to each
issuance of Additional Securities, the purchase agreement or underwriting
agreement among the Company and the Persons purchasing such Additional
Securities.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated June 14, 2006, among the Company and the Initial Purchasers and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Rule 144A Securities" means all Securities offered and sold
to QIBs in reliance on Rule 144A.
"Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend relating to restrictions on transfer relating to
the Securities Act set forth in Section 2.3(e) hereto.
3
1.2 Other Definitions
DEFINED IN
TERM SECTION:
---- --------
"Agent Members".................................................... 2.1(b)
"Global Securities"................................................ 2.1(a)
"IAI Global Security".............................................. 2.1(a)
"Permanent Regulation S Global Security"........................... 2.1(a)
"Regulation S"..................................................... 2.1(a)
"Regulation S Global Security"..................................... 2.1(a)
"Rule 144A"........................................................ 2.1(a)
"Rule 144A Global Security"........................................ 2.1(a)
"Temporary Regulation S Global Security"........................... 2.1(a)
2. The Securities
2.1. (a) Form and Dating. The Initial Securities will be offered
and sold by the Company pursuant to a Purchase Agreement. The Initial Securities
will be resold initially only to (i) QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the
restrictions on transfer set forth herein. Initial Securities initially resold
pursuant to Rule 144A shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form (collectively,
the "Rule 144A Global Security"); and Initial Securities initially resold
pursuant to Regulation S shall be issued initially in the form of one or more
temporary global securities in fully registered form (collectively, the
"Temporary Regulation S Global Security"), in each case without interest coupons
and with the global securities legend and the applicable restricted securities
legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the
purchasers of the Initial Securities represented thereby with the Securities
Custodian and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
provided in this Indenture. One or more global securities in definitive, fully
registered form without interest coupons and with the global securities legend
and the applicable restricted securities legend set forth in Exhibit 1 hereto
(collectively, the "IAI Global Security") shall also be issued on the Issue
Date, deposited with the Securities Custodian, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as provided in this Indenture to accommodate
transfers of beneficial interests in the Securities to IAIs subsequent to the
4
initial distribution. Except as set forth in this Section 2.1(a), beneficial
ownership interests in the Temporary Regulation S Global Security will not be
exchangeable for interests in the Rule 144A Global Security, the IAI Global
Security, a permanent global security (the "Permanent Regulation S Global
Security", and together with the Temporary Regulation S Global Security, the
"Regulation S Global Security") or any other Security prior to the expiration of
the Distribution Compliance Period and then, after the expiration of the
Distribution Compliance Period, may be exchanged for interests in a Rule 144A
Global Security, an IAI Global Security or the Permanent Regulation S Global
Security only upon certification in form reasonably satisfactory to the Trustee
that (i) beneficial ownership interests in such Temporary Regulation S Global
Security are owned either by non-U.S. persons or U.S. persons who purchased such
interests in a transaction that did not require registration under the
Securities Act and (ii) in the case of an exchange for an IAI Global Security,
certification that the interest in the Temporary Regulation S Global Security is
being transferred to an institutional "accredited investor" under the Securities
Act that is an institutional accredited investor acquiring the securities for
its own account or for the account of an institutional accredited investor.
Beneficial interests in Temporary Regulation S Global
Securities or IAI Global Securities may be exchanged for interests in Rule 144A
Global Securities if (1) such exchange occurs in connection with a transfer of
Securities in compliance with Rule 144A and (2) the transferor of the beneficial
interest in the Temporary Regulation S Global Security or the IAI Global
Security, as applicable, first delivers to the Trustee a written certificate (in
a form satisfactory to the Trustee) to the effect that the beneficial interest
in the Temporary Regulation S Global Security or the IAI Global Security, as
applicable, is being transferred to a Person (a) who the transferor reasonably
believes to be a QIB, (b) purchasing for its own account or the account of a QIB
in a transaction meeting the requirements of Rule 144A, and (c) in accordance
with all applicable securities laws of the States of the United States and other
jurisdictions.
Beneficial interests in Temporary Regulation S Global
Securities and Rule 144A Global Securities may be exchanged for an interest in
IAI Global Securities if (1) such exchange occurs in connection with a transfer
of the securities in compliance with an exemption under the Securities Act and
(2) the transferor of the Regulation S Global Security or Rule 144A Global
Security, as applicable, first delivers to the trustee a written certificate
(substantially in the form of Exhibit 2) to the effect that (A) the Regulation S
Global Security or Rule 144A Global Security, as applicable, is being
transferred (a) to an "accredited investor" within the meaning of
501(a)(1),(2),(3) and (7) under the Securities Act that is an institutional
investor acquiring the securities for its own account or for the account of such
an institutional accredited investor, in each case in a minimum principal amount
of the securities of $250,000, for investment purposes and not with a view to or
for offer or sale in connection with any distribution in violation of the
Securities Act and (B) in accordance with all applicable securities laws of the
States of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Security or an IAI
Global Security may be transferred to a Person who takes delivery in the form of
an interest in a Regulation S Global Security, whether before or after the
5
expiration of the Distribution Compliance Period, only if the transferor first
delivers to the Trustee a written certificate (in the form provided in the
Indenture) to the effect that such transfer is being made in accordance with
Rule 903 or 904 of Regulation S or Rule 144 (if applicable).
The Rule 144A Global Security, the IAI Global Security, the
Temporary Regulation S Global Security and the Permanent Regulation S Global
Security are collectively referred to herein as "Global Securities". The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, and the Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat
the Depository as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Definitive Securities. Except as provided in this Section
2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Securities
shall not be entitled to receive physical delivery of Definitive Securities.
2.2. Authentication. The Trustee shall authenticate and deliver:
(1) on the Issue Date, an aggregate principal amount of $375,000,000 Floating
Rate Senior Notes Due 2014, (2) any Additional Securities for an original issue
in an aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or Private
Exchange Securities for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
6
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and, in the case of any issuance of
Additional Securities pursuant to Section 2.13 of the Indenture, shall certify
that such issuance is in compliance with Section 4.03 of the Indenture.
2.3. Transfer and Exchange.
(a)Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar, duly executed by the Holder thereof or its attorney
duly authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or exchanged
pursuant to an effective registration statement under the Securities
Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C)
below, and are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred (x)
pursuant to an exemption from registration in accordance with Rule
144A, Regulation S or Rule 144 under the Securities Act; or (y) in
reliance upon another exemption from the requirements of the Securities
Act: (i) a certification to that effect (in the form set forth on the
reverse of the Security) and (ii) if the Company so requests, an
opinion of counsel or other evidence reasonably satisfactory to it as
to the compliance with the restrictions set forth in the legend set
forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Rule 144A Global Security, an IAI
7
Global Security or a Permanent Regulation S Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is either (A) being transferred
to a QIB in accordance with Rule 144A, (B) being transferred to an IAI
that has furnished to the Trustee a signed letter in the form of
Exhibit 2 hereto or (C) being transferred after expiration of the
Distribution Compliance Period by a Person who initially purchased such
Security in reliance on Regulation S to a buyer who elects to hold its
interest in such Security in the form of a beneficial interest in the
Permanent Regulation S Global Security; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Rule 144A Global Security (in the case of
a transfer pursuant to clause (b)(i)(A)), IAI Global Security (in the
case of a transfer pursuant to clause (b)(1)(B)) or Permanent
Regulation S Global Security (in the case of a transfer pursuant to
clause (b)(i)(B)) to reflect an increase in the aggregate principal
amount of the Securities represented by the Rule 144A Global Security,
IAI Global Security or Permanent Regulation S Global Security, as
applicable, such instructions to contain information regarding the
Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security, IAI Global Security or Permanent Regulation S Global Security, as
applicable, to be increased by the aggregate principal amount of the Definitive
Security to be exchanged and shall credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in the Rule
144A Global Security, IAI Global Security or Permanent Regulation S Global
Security, as applicable, equal to the principal amount of the Definitive
Security so canceled. If no Rule 144A Global Securities, IAI Global Securities
or Permanent Regulation S Global Securities, as applicable, are then
outstanding, the Company shall issue and the Trustee shall authenticate, upon
written order of the Company in the form of an Officers' Certificate of the
Company, a new Rule 144A Global Security, IAI Global Security or Permanent
Regulation S Global Security, as applicable, in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository,
in accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Depository
8
therefor. A transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in accordance with
the Depository's procedures containing information regarding the
participant account of the Depository to be credited with a beneficial
interest in the Global Security. The Registrar shall, in accordance
with such instructions instruct the Depository to credit to the account
of the Person specified in such instructions a beneficial interest in
the Global Security and to debit the account of the Person making the
transfer the beneficial interest in the Global Security being
transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Security
to which such interest is being transferred in an amount equal to the
principal amount of the interest to be so transferred, and the
Registrar shall reflect on its books and records the date and a
corresponding decrease in the principal amount of the Global Security
from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
(iv) In the event that Global Security is exchanged for
Definitive Securities to Section 2.4 of this Appendix, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Securities intended to ensure that such transfers comply
with Rule 144A, Regulation S or another applicable exemption under the
Securities Act, as the case may be) and such other procedures as may
from time to time be adopted by the Company.
(d) Restrictions on Transfer of Temporary Regulation S Global
Securities. During the Distribution Compliance Period, beneficial ownership
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred in accordance with the Applicable Procedures and only (i) to the
Company, (ii) in an offshore transaction in accordance with Regulation S (other
than a transaction resulting in an exchange for an interest in a Permanent
Regulation S Global Security), (iii) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any State of the United States.
(e) Legend.
9
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or in substitution thereof), in the case of
Securities offered otherwise than in reliance on Regulation S shall
bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY
IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO
THE COMPANY, (II) IN THE UNITED STATES TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) TO AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE
501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (IV) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (V) PURSUANT TO EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
10
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
Each certificate evidencing a Security offered in reliance on
Regulation S shall, in addition to the foregoing, bear a legend in
substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED
ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S
UNDER THE SECURITIES ACT.
Each Definitive Security shall also bear the following
additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the transferor thereof certifies
in writing to the Registrar that such sale or transfer was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the
effectiveness of a Shelf Registration Statement with respect to such
Initial Securities or Private Exchange Securities, as the case may be,
11
all requirements pertaining to legends on such Initial Security or such
Private Exchange Security will cease to apply and the requirements
requiring any such Initial Security or such Private Exchange Security
issued to certain Holders be issued in global form will continue to
apply.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities be issued in global form
will continue to apply, and Exchange Securities in global form without
the restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities be issued in global form will
continue to apply, and Private Exchange Securities in global form with
the global securities legend and the applicable restricted securities
legend set forth in Exhibit 1 hereto will be available to Holders that
exchange such Initial Securities in such Private Exchange.
(f) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities, redeemed, purchased
or canceled, the principal amount of Securities represented by such Global
Security shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Securities Custodian for such Global
Security) with respect to such Global Security, by the Trustee or the Securities
Custodian, to reflect such reduction.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the
accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depository) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the
12
Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
2.4 Definitive Securities.
(a) A Global Security deposited with the Depository or with
the Trustee as Securities Custodian for the Depository pursuant to Section 2.1
shall be transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 hereof and (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security and the Depository fails to appoint a successor depository or if at any
time such Depository ceases to be a "clearing agency" registered under the
Exchange Act, in either case, and a successor depository is not appointed by the
Company within 90 days of such notice, or (ii) an Event of Default has occurred
and is continuing or (iii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive Securities
under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Global Security, an
equal aggregate principal amount of Definitive Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section 2.4 shall be executed, authenticated and delivered only in denominations
of $1,000 principal amount and any integral multiple thereof and registered in
such names as the Depository shall direct. Any Definitive Security delivered in
exchange for an interest in the Transfer Restricted Security shall, except as
otherwise provided by Section 2.3(e) hereof, bear the applicable restricted
securities legend and definitive securities legend set forth in Exhibit 1
hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
13
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(d) In the event of the occurrence of one of the events
specified in Section 2.4(a) hereof, the Company shall promptly make available to
the Trustee a reasonable supply of Definitive Securities in definitive, fully
registered form without interest coupons. In the event that such Definitive
Securities are not issued, the Company expressly acknowledges, with respect to
the right of any Holder to pursue a remedy pursuant to Section 6.06 of this
Indenture, the right of any beneficial owner of Securities to pursue such remedy
with respect to the portion of the Global Security that represents such
beneficial owner's Securities as if such Definitive Securities had been issued.
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER
THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF
SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES
ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH
OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Restricted Securities Legend for Securities offered otherwise than in
Reliance on Regulation S]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
2
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) WITHIN THE UNITED STATES TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (IV) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (V) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
[Restricted Securities Legend for Securities Offered in
Reliance on Regulation S.]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR
INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
3
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT
CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE
UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOTIFY ANY
PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN
APPLICABLE.
AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE
EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE
OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE
144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST DELIVERS
TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE)
TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO
A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS
OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE
EXCHANGED FOR INTERESTS IN AN IAI GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE
OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH AN
EXEMPTION UNDER THE SECURITIES ACT AND (2) THE TRANSFEROR OF THE REGULATION S
GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
4
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
SECURITY IS BEING TRANSFERRED (A) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY OR AN IAI
GLOBAL SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF
AN INTEREST IN THE REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE
EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR
FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO
THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE
WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
5
No. $
------------- ----
Floating Rate Senior Notes Due 2014
HealthSouth Corporation, a Delaware corporation, promises to
pay to ____________, or registered assigns, the principal sum of _____________
Dollars on June 15, 2014.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
HEALTHSOUTH CORPORATION,
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
------------------------------------
Authorized Signatory
6
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
Floating Rate Senior Note Due 2014
1. Interest
HealthSouth Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum, reset semiannually,
equal to LIBOR plus 6.0%, as determined by the Calculation Agent (as defined in
the Indenture); provided, however, that if a Registration Default (as defined in
the Registration Rights Agreement) occurs, additional interest will accrue on
this Security at a rate of 0.25% per annum (increasing by an additional 0.25%
per annum after each consecutive 90-day period that occurs after the date on
which such Registration default occurs up to a maximum additional interest rate
of 1.00%) from and including the date on which any such Registration Default
shall occur to but excluding the date on which all Registration Defaults have
been cured. The Company will pay interest semiannually on June 15 and December
15 of each year, commencing December 15, 2006. Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from __________. The amount of interest for each day
that the Securities are outstanding (the "Daily Interest Amount") will be
calculated by dividing the interest rate in effect for such day by 360 and
multiplying the result by the principal amount of the Securities. The amount of
interest to be paid on the Securities for each Interest Period will be
calculated by adding the Daily Interest Amounts for each day in the Interest
Period. All percentages resulting from any of the above calculations will be
rounded, if necessary, to the nearest one hundred thousandth of a percentage
point, with five one-millionths of a percentage point being rounded upwards
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculations will be rounded
to the nearest cent (with one-half cent being rounded upwards). The Company will
pay interest on overdue principal at the rate borne by this Security plus 1.0%
per annum, and it will pay interest on overdue installments of interest at the
same rate to the extent lawful.
The interest rate on the Securities will in no event be higher
than the maximum rate permitted by New York law as the same may be modified by
United States law of general application.
The Calculation Agent will, upon the request of any holder of
a Security, provide the interest rate then in effect with respect to the
Securities. All calculations made by the Calculation Agent in the absence of
manifest error will be conclusive for all purposes and binding on the Company,
the Subsidiary Guarantors and the holders of the Securities.
7
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the June 1 or December 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by the Depository. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar; Calculation Agent
Initially, The Bank of Nova Scotia Trust Company of New York,
a New York banking corporation (the "Trustee"), will act as Paying Agent,
Registrar and Calculation Agent. The Company may appoint and change any Paying
Agent, Registrar or co-registrar or Calculation Agent without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of June 14, 2006 ("Indenture"), among the Company, the Subsidiary Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. xx.xx. 77aaa-77bbbb) (the "Act"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its compliance with Section
4.03 of the Indenture, to issue Additional Securities pursuant to Section 2.13
of the Indenture. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor will be treated as a single class for all purposes
under the Indenture. The Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur additional indebtedness; pay dividends
or distributions on, or redeem or repurchase capital stock; make investments;
8
issue or sell capital stock of subsidiaries; engage in transactions with
affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; consolidate,
merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in sale/leaseback transactions. These covenants are
subject to important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled
to redeem the Securities.
On and after June 15, 2009, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on June 15 of the years
set forth below:
Redemption
Period Price
------ ----------
2009 103.000%
2010 102.000%
2011 101.000%
2012 and thereafter 100.000%
In addition, prior to June 15, 2009, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 100.00%, plus a premium equal
to the interest rate per annum on the Securities applicable on the date that
notice of redemption is given, plus accrued and unpaid interest to the
redemption date, with the net cash proceeds from one or more Equity Offerings;
provided, however, that (1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any) remains outstanding
immediately after the occurrence of each such redemption (other than Securities
held, directly or indirectly, by the Company or its Affiliates); and (2) each
such redemption occurs within 90 days after the date of the related Equity
Offering.
Prior to June 15, 2009, the Company shall be entitled at its
option to redeem all, but not less than all, of the Securities at a redemption
price equal to 100% of the principal amount of the Securities plus the
Applicable Premium as of, and accrued and unpaid interest to, the redemption
date (subject to the right of Holders on the relevant record date to receive
interest due on the relevant interest payment date). The Company shall cause
9
notice of such redemption to be mailed by first-class mail to each Holder's
registered address, not less than 30 nor more than 60 days prior to the
redemption date.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all or any part of the Securities
of such Holder at a repurchase price equal to 101% of the principal amount of
the Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Guaranty
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several senior basis by each of the Subsidiary Guarantors to the
extent set forth in the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
Except as provided in paragraph 2 hereof, the registered
Holder of this Security may be treated as the owner of it for all purposes.
11. Unclaimed Money
10
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company as general creditors and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (b) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities, including Subsidiary Guaranties, or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company or the Subsidiary Guarantors, or to conform the
text of the Indenture or the Securities to any provision of the "Description of
the Notes" section of the Offering Memorandum (as defined in the Indenture)
under certain circumstances, or to comply with any requirement of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder, or to make
amendments to provisions of the Indenture relating to the form, authentication,
transfer and legending of the Securities.
14. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for
30 days in payment of interest on the Securities; (b) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (c) failure by the Company or any
Subsidiary Guarantor to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (d) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $50 million; (e) certain events of bankruptcy or insolvency with
11
respect to the Company and the Significant Subsidiaries; (f) certain judgments
or decrees for the payment of money in excess of $50 million; and (g) certain
defaults with respect to Subsidiary Guaranties. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. CUSIP Numbers
12
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
21. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written
request and without charge to the Security holder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Xxx XxxxxxXxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
13
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
------------------------ -----------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
1. [ ] to the Company; or
2. [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
3. [ ] inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act
of 1933) that purchases for its own account or for the
account of a qualified institutional buyer to whom notice
is given that such transfer is being made in reliance on
Rule 144A, in each case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
14
4. [ ] outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933;
or
5. [ ] pursuant to the exemption from registration provided by
Rule 144 under the Securities Act of 1933; or
6. [ ] to an institutional "accredited investor" (as defined in
Rule 501(a)(1),(2),(3) or (7) under the Securities Act of
1933) that has furnished to the Trustee a signed letter
containing certain representations and agreements.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4) is checked, the Trustee shall be entitled to require,
prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
-----------------------------------
Signature
Signature Guarantee:
---------------------------------------- -----------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
--------------------------------------------------------------------------------
15
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
----------------------- ----------------------------------------
Notice: To be executed by
an executive officer
16
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal amount in Principal amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or increase) Securities Custodian
17
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture,
state the amount in principal amount: $
Dated: Your Signature:
---------------------- --------------------------------
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT 2 to APPENDIX A
Form of
Transferee Letter of Representation
[Company]
In care of
[ ]
[ ]
[ ]
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $ principal
amount of the Floating Rate Senior Notes due 2014 (the "Securities") of
HealthSouth Corporation (the "Company").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name:
----------------------------------
Address:
-------------------------------
Taxpayer ID Number:
--------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
2
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (i) to the Company,
(ii) in the United States to a person whom the seller reasonably believes is a
qualified institutional buyer in a transaction meeting the requirements of Rule
144A, (iii) to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional
accredited investor purchasing for its own account or for the account of an
institutional accredited investor, in each case in a minimum principal amount of
the Securities of $250,000, (iv) outside the United States in a transaction
complying with the provisions of Rule 904 under the Securities Act, (v) pursuant
to an exemption from registration under the Securities Act provided by Rule 144
(if available) or (vi) pursuant to an effective registration statement under the
Securities Act, in each of cases (i) through (vi) subject to any requirement of
law that the disposition of our property or the property of such investor
account or accounts be at all times within our or their control and in
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Securities is proposed to be made
pursuant to clause (iii) above prior to the Resale Restriction Termination Date,
the transferor shall deliver a letter from the transferee substantially in the
form of this letter to the Company and the Trustee, which shall provide, among
other things, that the transferee is an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
and that it is acquiring such Securities for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser acknowledges
that the Company and the Trustee reserve the right prior to the offer, sale or
other transfer prior to the Resale Restriction Termination Date of the
Securities pursuant to clause (iii), (iv) or (v) above to require the delivery
of an opinion of counsel, certifications or other information satisfactory to
the Company and the Trustee.
TRANSFEREE: ,
-------------------------
by:
----------------------------
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
---------------------------------
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]
**/.[If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.]
2
No. $
------------- ----
Floating Rate Senior Notes Due 2014
HealthSouth Corporation, a Delaware corporation, promises to pay to
____________________, or registered assigns, the principal sum of ______________
Dollars on June 15, 2014.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
HEALTHSOUTH CORPORATION,
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NOVA SCOTIA TRUST
COMPANY OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
----------------------------------
Authorized Signatory
3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
Floating Rate Senior Note Due 2014
1. Interest
HealthSouth Corporation, a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum, reset semiannually, equal to LIBOR plus
6.00%, as determined by the Calculation Agent (as defined in the Indenture);
[provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on this
Security at a rate of 0.25% per annum (increasing by an additional 0.25% per
annum after each consecutive 90-day period that occurs after the date on which
such Registration default occurs up to a maximum additional interest rate of
1.00%) from and including the date on which any such Registration Default shall
occur to but excluding the date on which all Registration Defaults have been
cured.](1) The Company will pay interest semiannually on June 15 and December 15
of each year, commencing December 15, 2006. Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from __________. The amount of interest for each day
that the Securities are outstanding (the "Daily Interest Amount") will be
calculated by dividing the interest rate in effect for such day by 360 and
multiplying the result by the principal amount of the Securities. The amount of
interest to be paid on the Securities for each Interest Period will be
calculated by adding the Daily Interest Amounts for each day in the Interest
Period. All percentages resulting from any of the above calculations will be
rounded, if necessary, to the nearest one hundred thousandth of a percentage
point, with five one-millionths of a percentage point being rounded upwards
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculations will be rounded
to the nearest cent (with one-half cent being rounded upwards). The Company will
pay interest on overdue principal at the rate borne by this Security plus 1.0%
per annum, and it will pay interest on overdue installments of interest at the
same rate to the extent lawful.
The interest rate on the Securities will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general application.
The Calculation Agent will, upon the request of any holder of a
Security, provide the interest rate then in effect with respect to the
Securities. All calculations made by the Calculation Agent in the absence of
manifest error will be conclusive for all purposes and binding on the Company,
the Subsidiary Guarantors and the holders of the Securities.
--------------------
(1) Insert if at the date of issuance of the Exchange Security or Private
Exchange Security (as the case may be) any Registration Default has occurred
with respect to the related Initial Securities during the interest period in
which such date of issuance occurs.
4
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the June 1 or December 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar; Calculation Agent
Initially, The Bank of Nova Scotia Trust Company of New York, a New
York banking corporation (the "Trustee"), will act as Paying Agent, Registrar
and Calculation Agent. The Company may appoint and change any Paying Agent,
Registrar or co-registrar or Calculation Agent without notice. The Company or
any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying
Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
14, 2006 ("Indenture"), among the Company, the Subsidiary Guarantors and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
5
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
create liens on assets; transfer or sell assets; guarantee indebtedness;
restrict dividends or other payments of subsidiaries; consolidate, merge or
transfer all or substantially all of its assets and the assets of its
subsidiaries; and engage in sale/leaseback transactions. These covenants are
subject to important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled to redeem
the Securities.
On and after June 15, 2009, the Company shall be entitled at its option
to redeem all or a portion of the Securities upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed in percentages of principal
amount, on the redemption date) plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on June 15 of the years set forth below:
Redemption
Period Price
------ ----------
2009 103.000%
2010 102.000%
2011 101.000%
2012 and thereafter 100.000%
In addition, prior to June 15, 2009, the Company shall be entitled at
its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount of 100.00%, plus a premium equal
to the interest rate per annum on the Securities applicable on the date that
notice of redemption is given, plus accrued and unpaid interest to the
redemption date, with the net cash proceeds from one or more Equity Offerings;
provided, however, that (1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any) remains outstanding
immediately after the occurrence of each such redemption (other than Securities
held, directly or indirectly, by the Company or its Affiliates); and (2) each
such redemption occurs within 90 days after the date of the related Equity
Offering.
Prior to June 15, 2009, the Company shall be entitled at its
option to redeem all, but not less than all, of the Securities at a redemption
price equal to 100% of the principal amount of the Securities plus the
Applicable Premium as of, and accrued and unpaid interest to, the redemption
date (subject to the right of Holders on the relevant record date to receive
6
interest due on the relevant interest payment date). The Company shall cause
notice of such redemption to be mailed by first-class mail to each Holder's
registered address, not less than 30 nor more than 60 days prior to the
redemption date.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Guaranty
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior basis by each of the Subsidiary Guarantors to the extent set
forth in the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
Except as provided in paragraph 2 hereto, the registered Holder of this
Security may be treated as the owner of it for all purposes.
11. Unclaimed Money
7
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company as
general creditors and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
13. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (1) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (2) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture, the
Security Documents or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add guarantees with respect to the Securities, including Subsidiary
Guaranties, or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company or the Subsidiary
Guarantors, or to conform the text of the Indenture or the Securities to any
provision of the "Description of the Notes" section of the Offering Memorandum
(as defined in the Indenture) under certain circumstances, or to comply with any
requirement of the SEC in connection with qualifying the Indenture under the
Act, or to make any change that does not adversely affect the rights of any
Securityholder, or to make amendments to provisions of the Indenture relating to
the form, authentication, transfer and legending of the Securities.
14. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon acceleration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (c) failure by the Company or any
Subsidiary Guarantor to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (d) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $50 million; (e) certain events of bankruptcy or insolvency with
8
respect to the Company and the Significant Subsidiaries; (f) certain judgments
or decrees for the payment of money in excess of $50 million; and (g) certain
defaults with respect to Subsidiary Guaranties. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. CUSIP Numbers
9
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
[20. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.](2)
21. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written
request and without charge to the Security holder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Xxx XxxxxxXxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
--------------------
(2) Delete if this Security is not being issued in exchange for an Initial
Security.
10
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
------------------------ -----------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box: ?
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture,
state the amount in principal amount: $
Dated: Your Signature:
------------------------ -----------------------------
(Sign Exactly As Your Name
Appears On The Other Side Of
This Security.)
Signature Guarantee:
-----------------------------------------------------------
(Signature Must Be Guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF GUARANTY AGREEMENT]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated
as of , among [GUARANTOR] (the "New Guarantor"), a subsidiary of
HEALTHSOUTH CORPORATION (or its successor), a Delaware corporation (the
"Company"), the subsidiary guarantors listed on the signature pages hereto (the
"Subsidiary Guarantors") and THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
a New York trust company, as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H :
WHEREAS the Company and the Subsidiary Guarantors (the
"Existing Guarantors") has heretofore executed and delivered to the Trustee an
Indenture (the "Indenture") dated as of June 14, 2006, providing for the
issuance of the Company's Floating Rate Senior Notes due 2014 (the
"Securities");
WHEREAS Section 4.11 of the Indenture provides that under
certain circumstances the Company is required to cause the New Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the New Guarantor shall unconditionally guarantee all the Company's obligations
under the Securities pursuant to a Subsidiary Guaranty on the terms and
conditions set forth herein; and
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the New Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Agreement to Guarantee. The New Guarantor hereby agrees,
jointly and severally with all Existing Guarantors, to unconditionally guarantee
the Company's obligations under the Securities on the terms and subject to the
conditions set forth in Articles 10 of the Indenture and to be bound by all
other applicable provisions of the Indenture and the Securities.
2. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
4. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
5. Counterparts. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
6. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR],
by
--------------------------------
Name:
Title:
HEALTHSOUTH CORPORATION,
by
--------------------------------
Name:
Title:
[EXISTING GUARANTORS],
by
--------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA TRUST COMPANY OF
NEW YORK, as Trustee,
by
--------------------------------
Name:
Title:
