EXHIBIT 4.3
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VANGUARD HEALTH HOLDING COMPANY I, LLC
VANGUARD HOLDING COMPANY I, INC.
and the Guarantor party hereto
11 1/4 % SENIOR DISCOUNT NOTES DUE 2015
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INDENTURE
Dated as of September 23, 2004
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U.S. Bank National Association
as Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
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310(a)(1).............................................................................. 7.10
(a)(2)............................................................................ 7.10
(a)(3)............................................................................ N.A.
(a)(4)............................................................................ N.A.
(a)(5)............................................................................ 7.10
(b)............................................................................... 7.10
(c)............................................................................... N.A.
311(a)................................................................................. 7.11
(b)............................................................................... 7.11
(c)............................................................................... N.A.
312(a)................................................................................. 2.05
(b)............................................................................... 13.03
(c)............................................................................... 13.03
313(a)................................................................................. 7.06
(b)(1)............................................................................ N.A.
(b)(2)............................................................................ 7.06; 7.07
(c)............................................................................... 7.06; 13.02
(d)............................................................................... 7.06
314(a)................................................................................. 4.04; 13.02, 13.05
(b)............................................................................... N.A.
(c)(1)............................................................................ 13.04
(c)(2)............................................................................ 13.04
(c)(3)............................................................................ N.A.
(d)............................................................................... N.A.
(e)............................................................................... 13.05
(f)............................................................................... N.A.
315(a)................................................................................. 7.01
(b)............................................................................... 7.05; 13.02
(c)............................................................................... 7.01
(d)............................................................................... 7.01
(e)............................................................................... 6.11
316(a)(last sentence).................................................................. 2.09
(a)(1)(A)......................................................................... 6.05
(a)(1)(B)......................................................................... 6.04
(a)(2)............................................................................ N.A.
(b)............................................................................... 6.07
(c)............................................................................... 2.12
317(a)(1).............................................................................. 6.08
(a)(2)............................................................................ 6.09
(b)............................................................................... 2.04
318(a)................................................................................. 13.01
(b)............................................................................... N.A.
(c)............................................................................... 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions......................................................................... 1
Section 1.02 Other Definitions................................................................... 35
Section 1.03 Incorporation by Reference of Trust Indenture Act................................... 36
Section 1.04 Rules of Construction............................................................... 36
ARTICLE II THE NOTES
Section 2.01 Form and Dating..................................................................... 36
Section 2.02 Execution and Authentication........................................................ 38
Section 2.03 Registrar and Paying Agent.......................................................... 39
Section 2.04 Paying Agent to Hold Money in Trust................................................. 39
Section 2.05 Holder Lists........................................................................ 39
Section 2.06 Transfer and Exchange............................................................... 39
Section 2.07 Replacement Notes................................................................... 55
Section 2.08 Outstanding Notes................................................................... 55
Section 2.09 Treasury Notes...................................................................... 55
Section 2.10 Temporary Notes..................................................................... 56
Section 2.11 Cancellation........................................................................ 56
Section 2.12 Defaulted Interest.................................................................. 56
Section 2.13 CUSIP Numbers....................................................................... 56
Section 2.14 Issuance of Additional Senior Discount Notes........................................ 56
ARTICLE III REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.................................................................. 57
Section 3.02 Selection of Notes to Be Redeemed or Purchased...................................... 57
Section 3.03 Notice of Redemption................................................................ 58
Section 3.04 Effect of Notice of Redemption...................................................... 59
Section 3.05 Deposit of Redemption or Purchase Price............................................. 59
Section 3.06 Notes Redeemed or Purchased in Part................................................. 60
Section 3.07 Optional Redemption................................................................. 60
Section 3.08 Mandatory Redemption................................................................ 61
Section 3.09 Offer to Purchase by Application of Excess Proceeds................................. 61
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ARTICLE IV COVENANTS
Section 4.01 Payment of Notes.................................................................... 63
Section 4.02 Maintenance of Office or Agency..................................................... 63
Section 4.03 Reports to Holders.................................................................. 64
Section 4.04 Compliance Certificate.............................................................. 64
Section 4.05 Intentionally Omitted............................................................... 65
Section 4.06 Intentionally Omitted............................................................... 65
Section 4.07 Restricted Payments................................................................. 65
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries........... 72
Section 4.09 Incurrence of Additional Indebtedness and Issuance of Preferred Stock............... 73
Section 4.10 Asset Sales......................................................................... 78
Section 4.11 Transactions with Affiliates........................................................ 81
Section 4.12 Liens............................................................................... 83
Section 4.13 Conduct of Business................................................................. 83
Section 4.14 Offer to Repurchase Upon Change of Control.......................................... 84
Section 4.15 Payments for Consent................................................................ 86
Section 4.16 Intentionally Omitted............................................................... 86
Section 4.17 Intentionally Omitted............................................................... 86
Section 4.18 Intentionally Omitted............................................................... 86
Section 4.19 Existence of Corporate Co-Issuer.................................................... 86
ARTICLE V SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of All or Substantially All Assets.................... 86
Section 5.02 Successor Corporation Substituted................................................... 87
ARTICLE VI DEFAULTS AND REMEDIES
Section 6.01 Events of Default................................................................... 88
Section 6.02 Acceleration........................................................................ 89
Section 6.03 Other Remedies...................................................................... 90
Section 6.04 Waiver of Past Defaults............................................................. 90
Section 6.05 Control by Majority................................................................. 91
Section 6.06 Limitation on Suits................................................................. 91
Section 6.07 Rights of Holders of Notes to Receive Payment....................................... 92
Section 6.08 Collection Suit by Trustee.......................................................... 92
Section 6.09 Trustee May File Proofs of Claim.................................................... 92
Section 6.10 Priorities.......................................................................... 92
Section 6.11 Undertaking for Costs............................................................... 93
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ARTICLE VII TRUSTEE
Section 7.01 Duties of Trustee................................................................... 93
Section 7.02 Rights of Trustee................................................................... 94
Section 7.03 Individual Rights of Trustee........................................................ 95
Section 7.04 Trustee's Disclaimer................................................................ 95
Section 7.05 Notice of Defaults.................................................................. 96
Section 7.06 Reports by Trustee to Holders of the Notes.......................................... 96
Section 7.07 Compensation and Indemnity.......................................................... 96
Section 7.08 Replacement of Trustee.............................................................. 97
Section 7.09 Successor Trustee by Merger, etc.................................................... 98
Section 7.10 Eligibility; Disqualification....................................................... 98
Section 7.11 Preferential Collection of Claims Against the Issuers............................... 98
ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance........................... 99
Section 8.02 Legal Defeasance and Discharge..................................................... 99
Section 8.03 Covenant Defeasance................................................................. 99
Section 8.04 Conditions to Legal or Covenant Defeasance......................................... 100
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions......................................................... 101
Section 8.06 Repayment to Issuers............................................................... 102
Section 8.07 Reinstatement...................................................................... 102
ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes................................................ 102
Section 9.02 With Consent of Holders of Notes................................................... 103
Section 9.03 Compliance with Trust Indenture Act................................................ 105
Section 9.04 Revocation and Effect of Consents.................................................. 105
Section 9.05 Notation on or Exchange of Notes................................................... 105
Section 9.06 Trustee to Sign Amendments, etc.................................................... 105
ARTICLE X INTENTIONALLY OMITTED
ARTICLE XI SENIOR DISCOUNT NOTE GUARANTEE
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Section 11.01 Senior Discount Note Guarantee..................................................... 106
Section 11.02 Limitation on Liability............................................................ 108
Section 11.03 Intentionally Omitted.............................................................. 108
Section 11.04 Successors and Assigns............................................................. 108
Section 11.05 No Waiver.......................................................................... 108
Section 11.06 Modification....................................................................... 109
ARTICLE XII SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge......................................................... 109
Section 12.02 Application of Trust Money......................................................... 110
ARTICLE XIII MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls....................................................... 110
Section 13.02 Notices............................................................................ 110
Section 13.03 Communication by Holders of Notes with Other Holders of Notes...................... 111
Section 13.04 Certificate and Opinion as to Conditions Precedent................................. 112
Section 13.05 Statements Required in Certificate or Opinion...................................... 112
Section 13.06 Rules by Trustee and Agents........................................................ 112
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders........... 112
Section 13.08 Governing Law...................................................................... 113
Section 13.09 Successors......................................................................... 113
Section 13.10 Severability....................................................................... 113
Section 13.11 Counterpart Originals.............................................................. 113
Section 13.12 Table of Contents, Headings, etc................................................... 113
EXHIBITS
Exhibit A1 FORM OF SENIOR DISCOUNT NOTE
Exhibit A2 FORM OF REGULATION S TEMPORARY SENIOR DISCOUNT GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit E FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
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INDENTURE dated as of September 23, 2004 among Vanguard Health
Holding Company I, LLC, a Delaware limited liability company, ("VHS Holdco I"),
Vanguard Holding Company I, Inc., a Delaware corporation and a Wholly-Owned
Subsidiary (as defined) of VHS Holdco I (the "Discount Notes Co-Issuer," and
together with VHS Holdco I, the "Issuers"), Vanguard Health Systems, Inc.
("Vanguard" or the "Guarantor") and U.S. Bank National Association, a national
banking association, as trustee (the "Trustee").
The Issuers, Vanguard and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of (a) the $216,000,000 aggregate principal amount at maturity of the
Issuers' 11 1/4 % Senior Discount Notes due 2015 (the "Initial Senior Discount
Notes"), (b) any Additional Senior Discount Notes (as defined) that may be
issued after the date hereof and (c) if and when issued pursuant to the Senior
Discount Registration Rights Agreement (as defined herein), the Issuers' Senior
Discount Exchange Notes (as defined herein) issued in the Senior Discount
Registered Exchange Offer (as defined herein) in exchange for any outstanding
Initial Senior Discount Notes or Additional Senior Discount Notes (all such
securities in clauses (a), (b) and (c) being referred to collectively as the
"Senior Discount Notes"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Accreted Value" means, as of any date (the "Specified Date"), the
amount provided below for each $1,000 principal amount at maturity of Senior
Discount Notes:
(1) if the Specified Date occurs on one of the following dates
(each a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for each Semi-Annual Accrual Date:
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE
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April 1, 2005.................................................................. $ 611.08
October 1, 2005................................................................ 645.46
April 1, 2006.................................................................. 681.76
October 1, 2006................................................................ 720.11
April 1, 2007.................................................................. 760.62
October 1, 2007................................................................ 803.40
April 1, 2008.................................................................. 848.59
October 1, 2008................................................................ 896.33
April 1, 2009.................................................................. 946.75
October 1, 2009................................................................ $1,000.00
The foregoing Accreted Values shall be increased, if necessary, to reflect any
accretion of Additional Interest payable pursuant to the Senior Discount
Registration Rights Agreement. As
a result, in the event that Additional Interest accrues on the Senior Discount
Notes, the principal amount at maturity of the Senior Discount Notes will be in
excess of $1,000.
(2) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (A) the original
issue price of a Senior Discount Note and (B) an amount equal to the
product of (i) the Accreted Value for the first Semi-Annual Accrual Date
less such original issue price multiplied by (ii) a fraction, the
numerator of which is the number of days from the Issue Date to the
Specified Date, using a 360-day year of twelve 30-day months, and the
denominator of which is the number of days elapsed from the Issue Date to
the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day
months;
(3) if the Specified Date occurs between Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (A) the Accreted Value for
the Semi-Annual Accrual Date immediately preceding such Specified Date and
(B) an amount equal to the product of (i) the Accreted Value for the
immediately following Semi-Annual Accrual Date less the Accreted Value for
the Semi-Annual Accrual Date immediately preceding such Specified Date
multiplied by (ii) a fraction, the numerator of which is the number of
days from the immediately preceding Semi-Annual Accrual Date to the
Specified Date, using a 360-day year of twelve 30-day months, and the
denominator of which is 180; or
(4) if the Specified Date occurs on or after the Full
Accretion Date, the Accreted Value will equal $1,000 (increased, if
necessary, to reflect any accretion of Additional Interest payable
pursuant to the Senior Discount Registration Rights Agreement.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Restricted Subsidiary of
such specified Person;
(2) Indebtedness secured by an existing Lien encumbering any
asset acquired by such specified Person; and
(3) Indebtedness of any other Person assumed in connection
with, and existing at the time of, an acquisition by a Restricted
Subsidiary of the property or assets that constitute substantially all of
a division or line of business of such Person.
but excluding in any event Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Restricted Subsidiary of, or such assets or property being acquired by, such
specified Person.
"Additional Interest" means any additional interest then owing in
respect of the Senior Discount Notes pursuant to the provisions of the Senior
Discount Registration Rights Agreement.
"Additional Senior Discount Notes" means additional Senior Discount
Notes (other than the Initial Senior Discount Notes) issued under this Senior
Discount Indenture in
2
accordance with Sections 2.14 and 4.09 hereof, as part of the same series as the
Initial Senior Discount Notes.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or
additional paying agent.
"Applicable Premium" means, with respect to any Senior Discount Note
on the applicable redemption date, the greater of:
(1) 1.0% of the then outstanding Accreted Value of the Senior
Discount Note; and
(2) the excess of: (A) the present value at the redemption
date of (i) the redemption price of the Senior Discount Note at October 1,
2009, (such redemption price being set forth in the table appearing in
Section 3.07(c) hereof) plus (ii) all required interest payments due on
the Senior Discount Note through October 1, 2009, (excluding accrued but
unpaid interest), computed using a discount rate equal to the Treasury
Rate as of such redemption date plus 50 basis points; over (B) the then
outstanding Accreted Value of the Senior Discount Note.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Senior Discount Global Note, the
rules and procedures of the Depositary, Euroclear and Clearstream that apply to
such transfer or exchange.
"Asset Sale" means (a) the sale, conveyance, transfer or other
disposition (whether in a single transaction or a series of related
transactions) of property or assets of VHS Holdco I or any Restricted Subsidiary
(each referred to in this definition as a "disposition") or (b) the issuance or
sale of Equity Interests of any Restricted Subsidiary, other than directors'
qualifying Equity Interests or Equity Interests required by applicable law to be
held by a Person other than VHS Holdco I or a Restricted Subsidiary (whether in
a single transaction or a series of related transactions), in each case, other
than:
(1) a disposition of Cash Equivalents or obsolete or worn out
property or equipment in the ordinary course of business or inventory (or
other assets) held for sale in the ordinary course of business;
(2) the disposition of all or substantially all of the assets
of either of the Issuers in a manner permitted pursuant Article 5 hereof
or any disposition that constitutes a Change of Control pursuant to this
Senior Discount Indenture;
3
(3) the making of any Restricted Payment or Permitted
Investment that is permitted to be made, and is made, pursuant to Section
4.07 hereof;
(4) any disposition of assets or issuance or sale of Equity
Interests of any Restricted Subsidiary in any transaction or series of
related transactions with an aggregate fair market value of less than
$10.0 million;
(5) any disposition of property or assets or issuance of
securities by a Restricted Subsidiary to VHS Holdco I or by VHS Holdco I
or a Restricted Subsidiary to another Restricted Subsidiary;
(6) the lease, assignment, license or sublease of any real or
personal property in the ordinary course of business;
(7) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary;
(8) sales of assets received by VHS Holdco I or any Restricted
Subsidiary upon foreclosures on a Lien;
(9) sales of Securitization Assets and related assets of the
type specified in the definition of "Securitization Financing" to a
Securitization Subsidiary in connection with any Qualified Securitization
Financing;
(10) a transfer of Securitization Assets and related assets of
the type specified in the definition of "Securitization Financing" (or a
fractional undivided interest therein) by a Securitization Subsidiary in a
Qualified Securitization Financing;
(11) any exchange of assets for assets related to a Permitted
Business of comparable market value, as determined in good faith by VHS
Holdco I, which in the event of an exchange of assets with a fair market
value in excess of (A) $25.0 million shall be evidenced by a certificate
of a Responsible Officer of VHS Holdco I, and (B) $50.0 million shall be
set forth in a resolution approved in good faith by at least a majority of
the Board of Directors of VHS Holdco I;
(12) the substantially contemporaneous sale and leaseback of
an asset; provided that the sale and leaseback occurs within 180 days
after the date of the acquisition of the asset by VHS Holdco I or any
Restricted Subsidiary; and
(13) the sale or transfer, in the ordinary course of business
consistent with past practice, of receivables owing to VHS Holdco I or any
Restricted Subsidiary for the purpose of collection of outstanding
balances thereunder.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any
4
particular "person" (as that term is used in Section 13(d)(3) of the Exchange
Act), such "person" will be deemed to have beneficial ownership of all
securities that such "person" has the right to acquire by conversion or exercise
of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation or any committee thereof duly authorized to act on behalf
of such board;
(2) with respect to a limited liability company, the board of
directors or other governing body, and in the absence of same, the manager
or board of managers or the managing member or members or any controlling
committee thereof;
(3) with respect to a partnership, the board of directors of
the general partner or manager of the partnership; and
(4) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Senior Discount
Registration Rights Agreement.
"Business Day" means a day other than a Saturday, Sunday or other
day on which banking institutions are authorized or required by law to close in
New York State.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Capitalized Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized and reflected as a
liability on a balance sheet (excluding the footnotes thereto) in accordance
with GAAP.
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"Captive Insurance Subsidiary" means a Subsidiary of VHS Holdco I or
any Restricted Subsidiary established for the purpose of insuring the health
care businesses or facilities owned or operated by VHS Holdco I or any of its
Subsidiaries or any physician employed by or on the medical staff of any such
business or facility.
"Cash Contribution Amount" means the aggregate amount of cash
contributions made to the capital of the Issuers described in the definition of
"Contribution Indebtedness."
"Cash Equivalents" means:
(1) United States dollars or, in the case of any Foreign
Subsidiary, such local currencies held by it from time to time in the
ordinary course of business;
(2) direct obligations of the United States of America or any
agency thereof or obligations guaranteed by the United States of America
or any agency thereof in each case with maturities not exceeding two years
(3) certificates of deposit and time deposits with maturities
of 12 months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding 12 months and overnight bank deposits, in
each case, with any lender party to the Credit Agreement or with any
commercial bank having capital and surplus in excess of $500.0 million;
(4) repurchase obligations for underlying securities of the
types described in clauses (2) and (3) above entered into with any
financial institution meeting the qualifications specified in clause (3)
above;
(5) commercial paper maturing within 12 months after the date
of acquisition and having a rating of at least A-1 from Xxxxx'x or P-1
from S&P;
(6) securities with maturities of two years or less from the
date of acquisition issued or fully guaranteed by any state or
commonwealth of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least A by S&P or
A-2 by Xxxxx'x;
(7) investment funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through
(6) of this definition; and
(8) money market funds that (A) comply with the criteria set
forth in Rule 2a-7 under the Investment Company Act of 1940, (B) are rated
AAA by S&P and Aaa by Xxxxx'x and (C) have portfolio assets of at least
$500.0 million.
"Change of Control" means the occurrence of any of the following:
(1) the sale, lease, transfer or other conveyance, in one or a
series of related transactions, of all or substantially all of the assets
of VHS Holdco I and its Subsidiaries, taken as a whole, to any Person
other than a Permitted Holder;
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(2) Vanguard or either of the Issuers becomes aware of (by way
of a report or any other filing pursuant to Section 13(d) of the Exchange
Act, proxy, vote, written notice or otherwise) the acquisition by any
Person or group (within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Exchange Act, or any successor provision), including any
group acting for the purpose of acquiring, holding or disposing of
securities (within the meaning of Rule 13d-5(b)(1) under the Exchange
Act), other than the Permitted Holders, in a single transaction or in a
related series of transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act, or any successor provision),
of more than 50% of the total voting power of the Voting Stock of either
of the Issuers or any of their respective direct or indirect parent
corporations or entities; or
(3) (A) prior to the first public offering of common stock of
Vanguard, or either of the Issuers, the first day on which the Board of
Directors of Vanguard shall cease to consist of a majority of directors
who (i) were members of the Board of Directors of Vanguard on the Issue
Date or (ii) were either (x) nominated for election by the Board of
Directors of Vanguard, a majority of whom were directors on the Issue Date
or whose election or nomination for election was previously approved by a
majority of such directors, or (y) designated or appointed by a Permitted
Holder (each of the directors selected pursuant to clauses (A)(i) and
(A)(ii), "Continuing Directors") and (B) after the first public offering
of common stock of any of Vanguard or either of the Issuers, (i) if such
public offering is of common stock of Vanguard, the first day on which a
majority of the members of the Board of Directors of Vanguard are not
Continuing Directors, or (ii) if such public offering is of either of the
Issuers' common stock, the first day on which a majority of the members of
the Board of Directors of such Issuer are not Continuing Directors.
"Clearstream" means Clearstream Banking, S.A.
"Code" means the United States Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Consolidated Depreciation and Amortization Expense" means with
respect to any Person for any period, the total amount of depreciation and
amortization expense, including the amortization of deferred financing fees, of
such Person and its Restricted Subsidiaries for such period on a consolidated
basis and otherwise determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person
for any period, (a) the sum, without duplication, of: (1) consolidated interest
expense of such Person and its Restricted Subsidiaries for such period
(including amortization of original issue discount, the interest component of
Capitalized Lease Obligations and net payments (if any) pursuant to interest
rate Hedging Obligations, but excluding amortization of deferred financing fees,
expensing of any bridge or other financing fees and expenses and (2)
consolidated capitalized interest of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued (including, without limitation,
Securitization Fees), less (b) interest income of such Person and its Restricted
Subsidiaries (other than cash interest income of the Captive Insurance
Subsidiaries) for such period.
7
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) any net after-tax extraordinary, unusual or nonrecurring
gains or losses (less all fees and expenses relating thereto) or income or
expense or charge (including, without limitation, severance, relocation
and other restructuring costs) including, without limitation, any
severance expense, and fees, expenses or charges related to any offering
of Equity Interests of such Person, any Investment, acquisition or
Indebtedness permitted to be incurred hereunder (in each case, whether or
not successful), including all fees, expenses, charges and change in
control payments related to the Transactions, in each case shall be
excluded;
(2) the Net Income for such period shall not include the
cumulative effect of a change in accounting principles during such period;
(3) any net after-tax income or loss from discontinued
operations and any net after-tax gain or loss on disposal of discontinued
operations shall be excluded;
(4) any net after-tax gains or losses (less all fees and
expenses or charges relating thereto) attributable to business
dispositions or asset dispositions other than in the ordinary course of
business (as determined in good faith by the Board of Directors of VHS
Holdco I) shall be excluded;
(5) any net after-tax income or loss (less all fees and
expenses or charges relating thereto) attributable to the early
extinguishment of indebtedness shall be excluded;
(6) an amount equal to the amount of Tax Distributions under
Section 4.07(b)(9)(B) hereof actually made to Vanguard or VHS Holdings LLC
in respect of the net taxable income allocated by VHS Holdco I to Vanguard
or VHS Holdings LLC for such period shall be included as though such
amounts had been paid as income taxes directly by VHS Holdco I;
(7) (A) the Net Income for such period of any Person that is
not a Subsidiary, or that is an Unrestricted Subsidiary, or that is
accounted for by the equity method of accounting, shall be included only
to the extent of the amount of dividends or distributions or other
payments in respect of equity that are actually paid in cash (or to the
extent converted into cash) by the referent Person to VHS Holdco I or a
Restricted Subsidiary thereof in respect of such period and (B) without
duplication, the Net Income for such period shall include any dividend,
distribution or other payments in respect of equity paid in cash by such
Person to VHS Holdco I or a Restricted Subsidiary thereof in excess of the
amounts included in clause (A);
(8) any increase in amortization or depreciation or any
one-time non-cash charges resulting from purchase accounting in connection
with the Transactions or any acquisition that is consummated prior to or
after the Issue Date shall be excluded;
8
(9) accruals and reserves that are established within twelve
months after the Issue Date and that are so required to be established as
a result of the Transactions in accordance with GAAP shall be excluded;
(10) any non-cash impairment charges resulting from the
application of Statements of Financial Accounting Standards No. 142 and
No. 144 and the amortization of intangibles pursuant to Statement of
Financial Accounting Standards No. 141 shall be excluded;
(11) any non-cash compensation expense realized from grants of
stock appreciation or similar rights, stock options or other rights to
officers, directors and employees of such Person or any of its Restricted
Subsidiaries shall be excluded; and
(12) solely for the purpose of determining the amount
available for Restricted Payments under Section 4.07(a)(4)(C) hereof, the
Net Income for such period of any Restricted Subsidiary shall be excluded
if the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of its Net Income is not at the date of
determination permitted without any prior governmental approval (which has
not been obtained) or, directly or indirectly, by the operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule, or governmental regulation applicable to that
Restricted Subsidiary or its stockholders (other than as permitted by
Section 4.08), unless such restriction with respect to the payment of
dividends or in similar distributions has been legally waived; provided
that Consolidated Net Income of such Person shall be increased by the
amount of dividends or distributions or other payments that are actually
paid in cash (or to the extent converted into cash) by such Person to VHS
Holdco I or any Restricted Subsidiary thereof in respect of such period,
to the extent not already included therein.
Notwithstanding the foregoing, for the purpose of Section
4.07(a)(4)(C) only (other than clause (iv) thereof), there shall be excluded
from Consolidated Net Income any income arising from any sale or other
disposition of Restricted Investments made by VHS Holdco I and the Restricted
Subsidiaries, any repurchases and redemptions of Restricted Investments by VHS
Holdco I and the Restricted Subsidiaries, any repayments of loans and advances
which constitute Restricted Investments by VHS Holdco I and any Restricted
Subsidiary, any sale of the stock of an Unrestricted Subsidiary or any
distribution or dividend from an Unrestricted Subsidiary, in each case only to
the extent such amounts increase the amount of Restricted Payments permitted
under Section 4.07(a)(4)(C)(iv) hereof.
"Contingent Obligations" means, with respect to any Person, any
obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor; (b) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor; or (c)
to purchase property, securities or services primarily for the purpose of
assuring
9
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation against loss in respect thereof.
"Contribution Indebtedness" means Indebtedness of the Issuers in an
aggregate principal amount not greater than twice the aggregate amount of cash
contributions (other than Excluded Contributions) made to the capital of the
Issuers after the Issue Date; provided that:
(1) if the aggregate principal amount of such Contribution
Indebtedness is greater than the aggregate amount of such cash
contributions to the capital of the Issuers, the amount in excess shall be
Indebtedness (other than Secured Indebtedness) with a Stated Maturity
later than the Stated Maturity of the Senior Discount Notes, and
(2) such Contribution Indebtedness (A) is Incurred within 180
days after the making of such cash contribution and (B) is so designated
as Contribution Indebtedness pursuant to an Officers' Certificate on the
incurrence date thereof.
"Corporate Trust Office of the Trustee" will be at the address of
the Trustee specified in Section 13.02 hereof or such other address as to which
the Trustee may give notice to the Issuers.
"Credit Agreement" means that certain Credit Agreement, dated as of
September 23, 2004 among VHS Holdco I, Vanguard Health Holding Company II, LLC,
Vanguard Holding Company II, Inc., the Lenders party thereto, Bank of America,
N.A. as administrative agent, Citicorp North America, Inc., as syndication
agent, the other agents named therein, and Banc of America Securities LLC and
Citigroup Global Markets Inc., as joint lead arrangers and book runners,
together with all agreements, notes, instruments and documents executed or
delivered pursuant thereto and in connection therewith, including, without
limitation, all mortgages, other security documents and guaranties, in each case
as amended (including any amendment and restatement), supplemented, extended,
renewed, replaced (by one or more credit facilities, debt instruments,
indentures and/or related documentation) or otherwise modified from time to
time, including, without limitation, any agreement increasing the amount of,
extending the maturity of or refinancing in whole or in part (including, but not
limited to, by the inclusion of additional or different lenders or financial
institutions thereunder or additional borrowers or Guarantor thereof) all or any
portion of the Indebtedness under such agreement or any successor agreement or
agreements and whether by the same or any other agent, lender or group of
lenders or other financial institutions.
"Custodian" means the Trustee, as custodian with respect to the
Senior Discount Notes in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Senior Discount Note
registered in the name of the Holder thereof and issued in accordance with
Section 2.06 hereof, substantially in the form of Exhibit A1 hereto except that
such Senior Discount Note shall not bear the Senior
10
Discount Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Senior Discount Global Note" attached thereto.
"Delayed Draw Term Loan Portions" means (a) the $150.0 million
available under the Credit Agreement, which may be drawn within the period
specified (including any extensions thereof) after the Issue Date to finance the
acquisition of hospital properties and related properties, to fund working
capital and capital expenditures in connection therewith and, to the extent of
any excess availability, to fund the Issuers' working capital, capital
expenditures and general corporate needs, and (b) the $175.0 million available
under the Credit Agreement, which may be drawn at any time during the period
specified (including any extensions thereof) following the Issue Date for
working capital and general corporate requirements, including permitted
acquisitions.
"Depositary" means, with respect to the Senior Discount Notes
issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 hereof as the Depositary with respect to the Senior Discount Notes,
and any and all successors thereto appointed as depositary hereunder and having
become such pursuant to the applicable provision of this Senior Discount
Indenture.
"Designated Non-cash Consideration" means the fair market value of
non-cash consideration received by VHS Holdco I or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
"Designated Non-cash Consideration" pursuant to an Officers' Certificate setting
forth the basis of such valuation, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Non-cash
Consideration.
"Designated Preferred Stock" means Preferred Stock of the Issuers or
any direct or indirect parent company of the Issuers (other than Disqualified
Stock), that is issued for cash (other than to the Issuers or any of their
Subsidiaries or an employee stock ownership plan or trust established by the
Issuers or any of their Subsidiaries) and is so designated as Designated
Preferred Stock, pursuant to an Officers' Certificate, on the issuance date
thereof, the cash proceeds of which are excluded from the calculation set forth
in Section 4.07(a)(4)(C) hereof.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by the terms of any security into
which it is convertible or for which it is putable or exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable (other than as a
result of a change of control or asset sale), pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof
(other than as a result of a change of control or asset sale), in whole or in
part, in each case prior to the date 91 days after the earlier of the Final
Maturity Date of the Senior Discount Notes or the date the Senior Discount Notes
are no longer outstanding; provided (a) that if such Capital Stock is issued to
any plan for the benefit of employees of the Issuers or their Subsidiaries or by
any such plan to such employees, such Capital Stock shall not constitute
Disqualified Stock solely because it may be required to be repurchased by either
of the Issuers or their Subsidiaries in order to satisfy applicable statutory or
regulatory obligations and (b) any Capital Stock that would constitute
Disqualified Stock solely because the holders of the Capital Stock have the
right to require either of the Issuers or the Subsidiary that issued such
Capital Stock to repurchase such
11
Capital Stock upon the occurrence of a change of control or an asset sale, will
not constitute Disqualified Stock.
"Domestic Subsidiary" means any Restricted Subsidiary of VHS Holdco
I that was formed under the laws of the United States or any state of the United
States or the District of Columbia.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period
(a) plus, without duplication, and in each case to the extent
deducted in calculating Consolidated Net Income for such period:
(1) provision for taxes based on income, profits or capital of
such Person for such period, including, without limitation, state,
franchise and similar taxes (including any Tax Distribution taken into
account in calculating Consolidated Net Income), plus
(2) Consolidated Interest Expense of such Person for such
period, plus
(3) Consolidated Depreciation and Amortization Expense of such
Person for such period, plus
(4) any reasonable expenses or charges related to the
Transactions, any Equity Offering, Permitted Investment, acquisition,
recapitalization or Indebtedness permitted to be incurred under this
Senior Discount Indenture, plus
(5) the amount of any restructuring charges (which, for the
avoidance of doubt, shall include retention, severance, systems
establishment cost or excess pension charges), plus
(6) the minority interest expense consisting of subsidiary
income attributable to minority equity interests of third parties in any
non-Wholly-Owned Subsidiary in such period or any prior period, except to
the extent of dividends declared or paid on Equity Interests held by third
parties, plus
(7) the non-cash portion of "straight-line" rent expense, plus
(8) the amount of any expense to the extent a corresponding
amount is received in cash by VHS Holdco I and its Restricted Subsidiaries
from a Person other than VHS Holdco I or any Subsidiary of VHS Holdco I
under any agreement providing for reimbursement of any such expense;
provided such reimbursement payment has not been included in determining
Consolidated Net Income or EBITDA (it being understood that if the amounts
received in cash under any such agreement in any period exceed the amount
of expense in respect of such period, such excess amounts received may be
carried forward and applied against expense in future periods), plus
12
(9) the amount of management, consulting, monitoring and
advisory fees and related expenses paid to the Sponsors or any other
Permitted Holder (or any accruals related to such fees and related
expenses) during such period; provided that such amount shall not exceed
in any four quarter period the greater of (A) $6.0 million and (B) 2.0% of
EBITDA of VHS Holdco I and its Restricted Subsidiaries for each period,
plus
(10) without duplication, any other non-cash charges
(including any impairment charges and the impact of purchase accounting,
including, but not limited to, the amortization of inventory step-up)
(excluding any such charge that represents an accrual or reserve for a
cash expenditure for a future period), plus
(11) any net losses resulting from Hedging Obligations entered
into in the ordinary course of business relating to intercompany loans, to
the extent that the notional amount of the related Hedging Obligation does
not exceed the principal amount of the related intercompany loan,(b) less
the sum of, without duplication:
(1) non-cash items increasing Consolidated Net Income
for such period (excluding any items which represent the reversal of
any accrual of, or cash reserve for, anticipated cash charges or
asset valuation adjustments made in any prior period);
(2) the minority interest income consisting of
subsidiary losses attributable to the minority equity interests of
third parties in any non-Wholly-Owned Subsidiary,
(3) the cash portion of "straight-line" rent expense
which exceeds the amount expensed in respect of such rent expense
and
(4) any net gains resulting from Hedging Obligations
entered into in the ordinary course of business relating to
intercompany loans, to the extent that the notional amount of the
related Hedging Obligation does not exceed the principal amount of
the related intercompany loan.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private sale of common stock
or Preferred Stock of the Issuers or any of their direct or indirect parent
corporations (excluding Disqualified Stock), other than (a) public offerings
with respect to common stock of the Issuers or of any direct or indirect parent
corporation of the Issuers registered on Form S-8 (or any successor form that
provides for registration of securities offered to employees of the registrant)
and (b) any such public or private sale that constitutes an Excluded
Contribution.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
13
"Excluded Contribution" means net cash proceeds, marketable
securities or Qualified Proceeds, in each case received after the Issue Date by
VHS Holdco I and its Restricted Subsidiaries from:
(1) contributions to its common equity capital; and
(2) the sale (other than to a Subsidiary of VHS Holdco I or to
any management equity plan or stock option plan or any other management or
employee benefit plan or agreement of VHS Holdco I or any Subsidiary of
VHS Holdco I) of Capital Stock (other than Disqualified Stock),
in each case designated as Excluded Contributions pursuant to an Officers'
Certificate on the date such capital contributions are made or the date such
Equity Interests are sold, as the case may be, which are excluded from the
calculation set forth in Section 4.07(a)(4)(C) hereof.
"Existing Indebtedness" means Indebtedness of VHS Holdco I and its
Subsidiaries (after giving effect to the Transactions) in existence on the Issue
Date.
"Existing Vanguard Senior Subordinated Notes" means the 9 3/4 %
Senior Subordinated Notes due 2011 issued by Vanguard pursuant to an indenture
dated as of July 30, 2001 among Vanguard, the Guarantors (as defined therein)
and Bank One Trust Company, N.A., as supplemented.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period consisting of such Person's and its Restricted Subsidiaries' most
recently ended four fiscal quarters for which internal financial statements are
available, the ratio of EBITDA of such Person for such period to the Fixed
Charges of such Person for such period. In the event that VHS Holdco I or any
Restricted Subsidiary incurs, assumes, guarantees or repays any Indebtedness or
issues or repays Disqualified Stock or Preferred Stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or repayment of Indebtedness, or such issuance or
redemption of Disqualified Stock or Preferred Stock, as if the same had occurred
at the beginning of the applicable four-quarter period. For purposes of making
the computation referred to above, Investments, acquisitions, dispositions,
mergers or consolidations (as determined in accordance with GAAP) that have been
made by VHS Holdco I or any Restricted Subsidiary during the four-quarter
reference period or subsequent to such reference period and on or prior to or
simultaneously with the Calculation Date shall be calculated on a pro forma
basis assuming that all such Investments, acquisitions, dispositions, mergers,
consolidations (and the change in any associated fixed charge obligations and
the change in EBITDA resulting therefrom) had occurred on the first day of the
four-quarter reference period. If since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or into VHS
Holdco I or any Restricted Subsidiary since the beginning of such period) shall
have made any Investment, acquisition (including the Transactions), disposition,
merger, consolidation that would have required adjustment pursuant to this
definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect thereto for such period
14
as if such Investment, acquisition (including the Transactions), disposition,
merger or consolidation had occurred at the beginning of the applicable
four-quarter period. For purposes of this definition, whenever pro forma effect
is to be given to an acquisition (including the Transactions) or other
Investment and the amount of income or earnings relating thereto, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting Officer of VHS Holdco I and such pro forma calculations may include
operating expense reductions for such period resulting from the acquisition
which is being given pro forma effect that have been realized or for which the
steps necessary for realization have been taken or are reasonably expected to be
taken within six months following any such acquisition, including, but not
limited to, the execution or termination of any contracts, the termination of
any personnel or the closing (or approval by the Board of Directors of VHS
Holdco I of any closing) of any facility, as applicable; provided that, in
either case, such adjustments are set forth in an Officers' Certificate signed
by the chief financial officer of VHS Holdco I and another Officer which states
(a) the amount of such adjustment or adjustments, (b) that such adjustment or
adjustments are based on the reasonable good faith beliefs of the Officers
executing such Officers' Certificate at the time of such execution and (c) that
any related incurrence of Indebtedness is permitted pursuant to the Senior
Discount Indenture. If any Indebtedness bears a floating rate of interest and is
being given pro forma effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the Calculation Date had been the
applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness). Interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by a responsible financial or accounting officer of VHS Holdco I to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP. For purposes of making the computation referred to above, interest on any
Indebtedness under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period. Interest on Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rate, shall be deemed to have been
based upon the rate actually chosen, or, if none, then based upon such optional
rate chosen as VHS Holdco I may designate.
"Fixed Charges" means, with respect to any Person for any period,
the sum of, without duplication, (a) Consolidated Interest Expense of such
Person for such period, (b) all cash dividends paid, accrued and/or scheduled to
be paid or accrued during such period (excluding items eliminated in
consolidation) on any series of Preferred Stock of such Person and (c) all cash
dividends paid, accrued and/or scheduled to be paid or accrued during such
period (excluding items eliminated in consolidation) of any series of
Disqualified Stock.
"Foreign Subsidiary" means any Subsidiary of VHS Holdco I that is an
entity which is a controlled foreign corporation under Section 957 of the
Internal Revenue Code.
"GAAP" means generally accepted accounting principles in the United
States in effect on the Issue Date. For purposes of this Senior Discount
Indenture, the term "consolidated" with respect to any Person means such Person
consolidated with its Restricted Subsidiaries and does not include any
Unrestricted Subsidiary.
"Government Securities" means securities that are:
15
(1) direct obligations of the United States of America for the
timely payment of which its full faith and credit is pledged or
(2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option of the
issuers thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such Government Securities or a specific payment of principal of or
interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Securities or the specific payment
of principal of or interest on the Government Securities evidenced by such
depository receipt.
"guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner, including, without limitation, through letters of
credit or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness or other obligations.
"Guarantor" is defined in the preamble of this Senior Discount
Indenture.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under:
(1) currency exchange, interest rate or commodity swap
agreements, currency exchange, interest rate or commodity cap agreements
and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange, interest rates or
commodity prices.
"Holder" means a Person in whose name a Senior Discount Note is
registered on the Registrar's books.
"Indebtedness" means, with respect to any Person:
(a) any indebtedness (including principal and premium) of such
Person, whether or not contingent,
(1) in respect of borrowed money,
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or, without double counting,
reimbursement agreements in respect thereof),
16
(3) representing the balance deferred and unpaid of the
purchase price of any property (including Capitalized Lease
Obligations), except (A) any such balance that constitutes a trade
payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) reimbursement
obligations in respect of trade letters of credit obtained in the
ordinary course of business with expiration dates not in excess of
365 days from the date of issuance (i) to the extent undrawn or (ii)
if drawn, to the extent repaid in full within 20 business days of
any such drawing, or
(4) representing any Hedging Obligations,
if and to the extent that any of the foregoing Indebtedness (other than letters
of credit and Hedging Obligations) would appear as a liability upon a balance
sheet (excluding the footnotes thereto) of such Person prepared in accordance
with GAAP;
(b) Disqualified Stock of such Person;
(c) to the extent not otherwise included, any obligation by
such Person to be liable for, or to pay, as obligor, guarantor or
otherwise, on the Indebtedness of another Person (other than by
endorsement of negotiable instruments for collection in the ordinary
course of business);
(d) to the extent not otherwise included, Indebtedness of
another Person secured by a Lien on any asset owned by such Person
(whether or not such Indebtedness is assumed by such Person); and
(e) to the extent not otherwise included, the amount then
outstanding (i.e., advanced, and received by, and available for use by,
VHS Holdco I or any of its Restricted Subsidiaries) under any
Securitization Financing (as set forth in the books and records of VHS
Holdco I or any Restricted Subsidiary and confirmed by the agent, trustee
or other representative of the institution or group providing such
Securitization Financing);
provided that Contingent Obligations incurred in the ordinary course of business
and not in respect of borrowed money shall be deemed not to constitute
Indebtedness.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm or consultant to Persons engaged in a Permitted Business
of nationally recognized standing that is, in the good faith judgment of VHS
Holdco I, qualified to perform the task for which it has been engaged.
"Indirect Participant" means a Person who holds a beneficial
interest in a Senior Discount Global Note through a Participant.
"Initial Purchasers" means Citigroup Global Markets Inc., Banc of
America Securities LLC, Bear, Xxxxxxx & Co. Inc., X.X. Xxxxxx Securities Inc.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, ABN AMRO Incorporated and
Wachovia Capital Markets, LLC.
17
"Initial Senior Discount Notes" has the meaning assigned to it in
the preamble to this Senior Discount Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investment Grade Securities" means:
(1) securities issued by the U.S. government or by any agency
or instrumentality thereof and directly and fully guaranteed or insured by
the U.S. government (other than Cash Equivalents) and in each case with
maturities not exceeding two years from the date of acquisition;
(2) investments in any fund that invests exclusively in
investments of the type described in clause (1) which fund may also hold
immaterial amounts of cash pending investment and/or distribution; and
(3) corresponding instruments in countries other than the
United States customarily utilized for high quality investments and in
each case with maturities not exceeding two years from the date of
acquisition.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including guarantees or other obligations), advances or
capital contributions (excluding accounts receivable, trade credit, advances to
customers or suppliers, commission, travel and similar advances to officers and
employees, and, to the extent recorded in conformity with GAAP on the balance
sheet of VHS Holdco I as accounts receivable, prepaid expenses or deposits,
endorsements for collections or deposits, in each case to the extent arising in
the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities issued by
any other Person and investments that are required by GAAP to be classified on
the balance sheet (excluding the footnotes) of such Person in the same manner as
the other investments included in this definition to the extent such
transactions involve the transfer of cash or other property. If VHS Holdco I or
any Subsidiary of VHS Holdco I sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of VHS Holdco I such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of VHS Holdco I, VHS Holdco I will be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in Section 4.07(c) hereof.
For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.07 hereof, (a) "Investments" shall include the portion (proportionate
to VHS Holdco I's equity interest in such Subsidiary) of the fair market value
of the net assets of a Subsidiary of VHS Holdco I at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, VHS Holdco I shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an
18
amount (if positive) equal to (1) VHS Holdco I's "Investment" in such Subsidiary
at the time of such redesignation less (2) the portion (proportionate to VHS
Holdco I's equity interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such redesignation; (b) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by VHS Holdco I; and (c) any transfer of Capital Stock that
results in an entity which became a Restricted Subsidiary after the Issue Date
ceasing to be a Restricted Subsidiary shall be deemed to be an Investment in an
amount equal to the fair market value (as determined by the Board of Directors
of VHS Holdco I in good faith as of the date of initial acquisition) of the
Capital Stock of such entity owned by the VHS Holdco I and the Restricted
Subsidiaries immediately after such transfer.
"Issue Date" means September 23, 2004, the date on which the Senior
Discount Notes are originally issued.
"Issuers" means Vanguard Health Holding Company I, LLC, a Delaware
limited liability company, and Vanguard Holding Company I, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of Vanguard Health Holding Company I,
LLC, and any and all successors thereto.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Issuers and sent to all Holders of the Senior Discount Notes for
use by such Holders in connection with the Senior Discount Registered Exchange
Offer.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, hypothecation, pledge, encumbrance, charge or security interest in
or on such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities (other than securities
representing an interest in a joint venture that is not a Subsidiary), any
purchase option, call or similar right of a third party with respect to such
securities.
"LLC Agreement" means the LLC Agreement among certain of the
Sponsors and VHS Holdings LLC.
"Management Group" means the group consisting of the directors,
executive officers and other management personnel of Vanguard and the Issuers,
as the case may be, on the Issue Date together with (a) any new directors whose
election by such boards of directors or whose nomination for election by the
shareholders of Vanguard or the Issuers, as the case may be, was approved by a
vote of a majority of the directors of Vanguard or the Issuers, as the case may
be, then still in office who were either directors on the Issue Date or whose
election or nomination was previously so approved and (b) executive officers and
other management personnel of Vanguard or the Issuers, as the case may be, hired
at a time when the directors on the Issue Date together with the directors so
approved constituted a majority of the directors of Vanguard or the Issuers, as
the case may be.
"Moody's" means Xxxxx'x Investors Service, Inc.
19
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends or accretion of any Preferred
Stock.
"Net Proceeds" means the aggregate cash proceeds received by VHS
Holdco I or any Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received in respect of or upon the sale or other
disposition of any Designated Non-cash Consideration received in any Asset Sale
and any cash payments received by way of deferred payment of principal pursuant
to a note or installment receivable or otherwise, but only as and when received,
but excluding the assumption by the acquiring Person of Indebtedness relating to
the disposed assets or other consideration received in any other non-cash form),
net of the direct costs relating to such Asset Sale and the sale or disposition
of such Designated Non-cash Consideration (including, without limitation, legal,
accounting and investment banking fees, and brokerage and sales commissions),
and any relocation expenses Incurred as a result thereof, taxes paid or payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements related thereto), payments required
to be made to holders of minority interests in Restricted Subsidiaries as a
result of such Asset Sale, amounts required to be applied to the repayment of
principal, premium (if any) and interest on Indebtedness required (other than
pursuant to Section 4.10(b) hereof) to be paid as a result of such transaction,
and any deduction of appropriate amounts to be provided by VHS Holdco I as a
reserve in accordance with GAAP against any liabilities associated with the
asset disposed of in such transaction and retained by VHS Holdco I after such
sale or other disposition thereof, including, without limitation, pension and
other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
such transaction; provided that any net proceeds of an Asset Sale by a
non-guarantor Subsidiary that are subject to restrictions on repatriation to VHS
Holdco I will not be considered Net Proceeds for so long as such proceeds are
subject to such restrictions.
"Obligations" means any principal, interest, penalties, fees,
expenses, indemnifications, reimbursements (including, without limitation,
reimbursement obligations with respect to letters of credit), damages and other
liabilities, and guarantees of payment of such principal, interest, penalties,
fees, expenses, indemnifications, reimbursements, damages and other liabilities,
payable under the documentation governing any Indebtedness.
"Offer" means the cash offer to purchase any and all of the Existing
Vanguard Senior Subordinated Notes and related solicitation of consents of the
holders of the Existing Vanguard Senior Subordinated Notes to eliminate
substantially all of the restrictive covenants contained in the indenture, on
the terms and conditions set forth in the Offer to Purchase and Consent
Solicitation Statement dated July 27, 2004.
"Offering Memorandum" means that certain offering memorandum, dated
September 17, 2004, relating to the initial offering of the Senior Discount
Notes and the Senior Subordinated Notes.
"Officer" means the Chairman of the Board, the Vice Chairman (if
any), the Chief Executive Officer, the President, any Executive Vice President,
Senior Vice President or Vice President, the Treasurer or the Secretary of the
Issuers.
20
"Officers' Certificate" means a certificate signed on behalf of the
Issuers by two Officers of the Issuers, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Issuers, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel that meets
the requirements of Section 13.05 hereof. The counsel may be an employee of or
counsel to the Issuers or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear, a
Person who has an account with the Depositary, Euroclear or Clearstream,
respectively (and, with respect to DTC, shall include Euroclear or Clearstream).
"Permitted Business" means any business in the healthcare industry,
including, without limitation, the business of owning and operating acute care
hospitals and other related health care services and any services, activities or
businesses incidental or directly related or reasonably similar thereto and any
line of business engaged in by the Issuers or any of their direct or indirect
Subsidiaries on the Issue Date or any business activity that is a reasonable
extension, development or expansion thereof or ancillary thereto.
"Permitted Debt" is defined in Section 4.09 hereof.
"Permitted Holders" means, at any time, each of (a) the Sponsors and
their Affiliates (not including, however, any portfolio companies of any of the
Sponsors), (b) one or more of the executive officers of Vanguard as of the Issue
Date as listed in the Offering Memorandum under the caption "Management"
(excluding any representatives of the Sponsors and their Affiliates) and (c) the
Management Group, excluding those persons included in clause (b) hereof, with
respect to not more than 5.0% of the total voting power of the Equity Interests
of Vanguard, the Issuers or any direct or indirect parent company of any of such
Persons. Any person or group whose acquisition of beneficial ownership
constitutes a Change of Control in respect of which a Change of Control Offer is
made in accordance with the requirements of this Senior Discount Indenture will
thereafter, together with its Affiliates, constitute an additional Permitted
Holder.
"Permitted Investments" means:
(1) any Investment by VHS Holdco I in any Restricted
Subsidiary or by a Restricted Subsidiary in another Restricted Subsidiary;
(2) any Investment in cash and Cash Equivalents or Investment
Grade Securities;
(3) any Investment by VHS Holdco I or any Restricted
Subsidiary in a Person that is engaged in a Permitted Business if as a
result of such Investment (A) such Person becomes a Restricted Subsidiary
or (B) such Person, in one transaction or a series of related
transactions, is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, VHS Holdco I or a Restricted Subsidiary;
21
(4) any Investment in securities or other assets not
constituting cash or Cash Equivalents and received in connection with an
Asset Sale made pursuant to the provisions described in Section 4.10
hereof or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on the Issue Date or made pursuant
to binding commitments in effect on the Issue Date or an Investment
consisting of any extension, modification or renewal of any Investment
existing on the Issue Date (excluding any such extension, modification or
renewal involving additional advances, contributions or other investments
of cash or property or other increases thereof unless it is a result of
the accrual or accretion of interest or original issue discount or
payment-in-kind pursuant to the terms, as of the Issue Date, of the
original Investment so extended, modified or renewed);
(6) (A) loans and advances to officers, directors and
employees, not in excess of $10.0 million in the aggregate outstanding at
any one time and (B) loans and advances of payroll payments and expenses
to officers, directors and employees in each case incurred in the ordinary
course of business;
(7) any Investment acquired by VHS Holdco I or any Restricted
Subsidiary (A) in exchange for any other Investment or accounts receivable
held by VHS Holdco I or any such Restricted Subsidiary in connection with
or as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other Investment or accounts
receivable or (B) in satisfaction of a judgment or as a result of a
foreclosure by VHS Holdco I or any Restricted Subsidiary with respect to
any secured Investment or other transfer of title with respect to any
secured Investment in default;
(8) Hedging Obligations permitted under clause (10) of the
definition of "Permitted Debt";
(9) any Investment by VHS Holdco I or a Restricted Subsidiary
in a Permitted Business having an aggregate fair market value, taken
together with all other Investments made pursuant to this clause (9) that
are at that time outstanding (without giving effect to the sale of an
Unrestricted Subsidiary to the extent the proceeds of such sale do not
consist of cash and/or marketable securities), not to exceed 3.0% of Total
Assets (with the fair market value of each Investment being measured at
the time made and without giving effect to subsequent changes in value);
provided that if any Investment pursuant to this clause (9) is made in any
Person that is not a Restricted Subsidiary at the date of the making of
such Investment and such Person becomes a Restricted Subsidiary after such
date, such Investment shall thereafter be deemed to have been made
pursuant to clause (1) above and shall cease to have been made pursuant to
this clause (9) for so long as such Person continues to be a Restricted
Subsidiary;
(10) Investments resulting from the receipt of non-cash
consideration in an Asset Sale received in compliance with Section 4.10
hereof;
22
(11) Investments the payment for which consists of Equity
Interests of the Issuers or any direct or indirect parent companies of the
Issuers (exclusive of Disqualified Stock);
(12) guarantees of Indebtedness permitted under Section 4.09
hereof and performance guarantees consistent with past practice;
(13) any transaction to the extent it constitutes an
Investment that is permitted by and made in accordance with the provisions
of Section 4.11 (except transactions described in clauses (b)(2), (6), (7)
and (11) thereof;
(14) Investments of a Restricted Subsidiary acquired after the
Issue Date or of an entity merged into the Issuers or merged into or
consolidated with a Restricted Subsidiary in accordance with Section 5.01
hereof after the Issue Date to the extent that such Investments were not
made in contemplation of or in connection with such acquisition, merger or
consolidation and were in existence on the date of such acquisition,
merger or consolidation;
(15) guarantees by VHS Holdco I or any Restricted Subsidiary
of operating leases (other than Capitalized Lease Obligations) or of other
obligations that do not constitute Indebtedness, in each case entered into
by any Restricted Subsidiary in the ordinary course of business;
(16) Investments consisting of licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
(17) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment or purchases of contract
rights or licenses or leases of intellectual property, in each case in the
ordinary course of business;
(18) any Investment in a Securitization Subsidiary or any
Investment by a Securitization Subsidiary in any other Person in
connection with a Qualified Securitization Financing, including
Investments of funds held in accounts permitted or required by the
arrangements governing such Qualified Securitization Financing or any
related Indebtedness; provided that any Investment in a Securitization
Subsidiary is in the form of a Purchase Money Note, contribution of
additional Securitization Assets or an equity interest;
(19) additional Investments in joint ventures of VHS Holdco I
or any Restricted Subsidiary existing on the Issue Date in an aggregate
amount not to exceed $25.0 million;
(20) Physician Support Obligations made by VHS Holdco I or any
Restricted Subsidiary;
(21) Investments in a Captive Insurance Subsidiary in an
amount that does not exceed the minimum amount of capital required under
the laws of the jurisdiction in which such Captive Insurance Subsidiary is
formed plus the amount of any
23
reasonable general corporate and overhead expenses of such Captive
Insurance Subsidiary, and any Investment by a Captive Insurance Subsidiary
that is a legal investment for an insurance company under the laws of the
jurisdiction in which such Captive Insurance Subsidiary is formed and made
in the ordinary course of its business and rated in one of the four
highest rating categories;
(22) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility and workers compensation,
performance and similar deposits entered into as a result of the
operations of the business in the ordinary course of business; and
(23) additional Investments by VHS Holdco I or any Restricted
Subsidiaries having an aggregate fair market value, taken together with
all other Investments made pursuant to this clause (23), not to exceed
3.0% of Total Assets at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without
giving effect to subsequent changes in value).
"Permitted Liens" means the following types of Liens:
(1) deposits of cash or government bonds made in the ordinary
course of business to secure surety or appeal bonds to which such Person
is a party;
(2) Liens in favor of issuers of performance, surety bid,
indemnity, warranty, release, appeal or similar bonds or with respect to
other regulatory requirements or letters of credit or bankers' acceptances
issued, and completion guarantees provided for, in each case pursuant to
the request of and for the account of such Person in the ordinary course
of its business or consistent with past practice;
(3) Liens on property or shares of stock of a Person at the
time such Person becomes a Subsidiary of VHS Holdco I; provided that such
Liens are not created or incurred in connection with, or in contemplation
of, such other Person becoming such a Subsidiary; provided, further, that
such Liens may not extend to any other property owned by VHS Holdco I or
any Restricted Subsidiary;
(4) Liens on property at the time VHS Holdco I or a Restricted
Subsidiary acquired the property, including any acquisition by means of a
merger or consolidation with or into VHS Holdco I or any Restricted
Subsidiary; provided that such Liens are not created or incurred in
connection with, or in contemplation of, such acquisition; provided,
further, that such Liens may not extend to any other property owned by VHS
Holdco I or any Restricted Subsidiary;
(5) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to VHS Holdco I or another Restricted
Subsidiary permitted to be incurred in accordance with Section 4.09
hereof;
(6) Liens securing Hedging Obligations so long as the related
Indebtedness is permitted to be incurred under this Senior Discount
Indenture and is secured by a Lien on the same property securing such
Hedging Obligation;
24
(7) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(8) Liens in favor of VHS Holdco I or any Restricted
Subsidiary;
(9) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Liens referred to in clauses (3), (4), (25)
and (26) of this definition; provided that (A) such new Lien shall be
limited to all or part of the same property that secured the original
Liens (plus improvements on such property), and (B) the Indebtedness
secured by such Lien at such time is not increased to any amount greater
than the sum of (i) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under clauses (3), (4),
(25) and (26) at the time the original Lien became a Permitted Lien under
this Senior Discount Indenture and (ii) an amount necessary to pay any
fees and expenses, including premiums, related to such refinancing,
refunding, extension, renewal or replacement;
(10) Liens on Securitization Assets and related assets of the
type specified in the definition of "Securitization Financing" incurred in
connection with any Qualified Securitization Financing;
(11) Liens for taxes, assessments or other governmental
charges or levies of or against VHS Holdco I or one of its Subsidiaries
not yet delinquent, or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted or
pursuant to a closing agreement to be entered into under Section 7121 of
the Code between Vanguard Health Financial Company, Inc. and the
Commissioner of Internal Revenue with respect to the election under
Section 953(d) made (or to be made) by Volunteer Insurance, Ltd. or for
property taxes on property that VHS Holdco I or one of its Subsidiaries
has determined to abandon if the sole recourse for such tax, assessment,
charge, levy or claim is to such property;
(12) judgment Liens not giving rise to an Event of Default so
long as any appropriate legal proceedings that may have been duly
initiated for the review of such judgment shall not have been finally
terminated or the period within which such legal proceedings may be
initiated shall not have expired;
(13) (A) pledges and deposits made in the ordinary course of
business in compliance with the Federal Employers Liability Act or any
other workers' compensation, unemployment insurance and other social
security laws or regulations and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements in respect of such
obligations and (B) pledges and deposits securing liability for
reimbursement or indemnification obligations of (including obligations in
respect of letters of credit or bank guarantees for the benefit of)
insurance carriers providing property, casualty or liability insurance to
Vanguard, VHS Holdco I, VHS Holdco I or any Restricted Subsidiary;
25
(14) landlord's, carriers', warehousemen's, mechanics',
materialmen's, repairmen's, construction or other like Liens arising in
the ordinary course of business and securing obligations that are not
overdue by more than 30 days or that are being contested in good faith by
appropriate proceedings and in respect of which, if applicable, VHS Holdco
I or any Restricted Subsidiary shall have set aside on its books reserves
in accordance with GAAP;
(15) zoning restrictions, easements, trackage rights, leases
(other than Capitalized Lease Obligations), licenses, special assessments,
rights-of-way, restrictions on use of real property and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, do not interfere in any material respect with the ordinary
conduct of the business of VHS Holdco I or any Restricted Subsidiary;
(16) Liens that are contractual rights of set-off (A) relating
to the establishment of depository relations with banks not given in
connection with the issuance of Indebtedness, (B) relating to pooled
deposit or sweep accounts of VHS Holdco I or any Restricted Subsidiary to
permit satisfaction of overdraft or similar obligations incurred in the
ordinary course of business of VHS Holdco I and the Restricted
Subsidiaries or (C) relating to purchase orders and other agreements
entered into with customers of VHS Holdco I or any Restricted Subsidiary
in the ordinary course of business;
(17) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar
rights;
(18) Liens securing obligations in respect of trade-related
letters of credit permitted under Section 4.09 hereof and covering the
goods (or the documents of title in respect of such goods) financed by
such letters of credit and the proceeds and products thereof;
(19) any interest or title of a lessor under any lease or
sublease entered into by VHS Holdco I or any Restricted Subsidiary in the
ordinary course of business;
(20) licenses of intellectual property granted in a manner
consistent with past practice;
(21) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with
the importation of goods;
(22) Liens solely on any xxxx xxxxxxx money deposits made by
VHS Holdco I or any Restricted Subsidiary in connection with any letter of
intent or purchase agreement permitted hereunder;
(23) Liens with respect to obligations of VHS Holdco I or a
Restricted Subsidiary with an aggregate fair market value (valued at the
time of creation thereof) of not more than $25.0 million at any time;
26
(24) deposits or pledges in connection with bids, tenders,
leases and contracts (other than contracts for the payment of money)
entered into in the ordinary course of business;
(25) Liens securing Capitalized Lease Obligations permitted to
be incurred pursuant to Section 4.09 hereof and Indebtedness permitted to
be incurred under Section 4.09(b)(5); provided, however, that such Liens
securing Capitalized Lease Obligations or Indebtedness incurred Section
4.09(b)(5) hereof may not extend to property owned by VHS Holdco I or any
Restricted Subsidiary other than the property being leased or acquired
pursuant to such Section 4.09(b)(5); and
(26) Liens existing on the Issue Date after giving effect to
the consummation of the Transactions.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Physician Support Obligation" means a loan to or on behalf of, or a
guarantee of indebtedness of, (a) a physician or healthcare professional
providing service to patients in the service area of a hospital or other health
care facility operated by VHS Holdco I or any of its Subsidiaries or (b) any
independent practice association or other entity majority-owned by any Person
described in clause (a) made or given by VHS Holdco I or any Subsidiary of VHS
Holdco I, in each case:
(1) in the ordinary course of its business; and
(2) pursuant to a written agreement having a period not to
exceed five years.
"Preferred Stock" means any Equity Interest with preferential rights
of payment of dividends upon liquidation, dissolution or winding up.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) hereof to be placed on all Senior Discount Notes issued under this
Senior Discount Indenture except where otherwise permitted by the provisions of
this Senior Discount Indenture.
"Purchase Money Note" means a promissory note of a Securitization
Subsidiary evidencing a line of credit, which may be irrevocable, from Vanguard
or any Subsidiary of Vanguard to a Securitization Subsidiary in connection with
a Qualified Securitization Financing, which note is intended to finance that
portion of the purchase price that is not paid in cash or a contribution of
equity and which (a) shall be repaid from cash available to the Securitization
Subsidiary, other than (1) amounts required to be established as reserves, (2)
amounts paid to investors in respect of interest, (3) principal and other
amounts owing to such investors and (4) amounts paid in connection with the
purchase of newly generated receivables and (b) may be subordinated to the
payments described in clause (a) of this definition.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
27
"Qualified Proceeds" means assets that are used or useful in, or
Capital Stock of any Person engaged in, a Permitted Business; provided that the
fair market value of any such assets or Capital Stock shall be determined by the
Board of Directors of VHS Holdco I in good faith, except that in the event the
value of any such assets or Capital Stock exceeds $25.0 million or more, the
fair market value shall be determined by an Independent Financial Advisor.
"Qualified Securitization Financing" means any Securitization
Financing of a Securitization Subsidiary that meets the following conditions:
(a) the Board of Directors of VHS Holdco I shall have determined in good faith
that such Qualified Securitization Financing (including financing terms,
covenants, termination events and other provisions) is in the aggregate
economically fair and reasonable to the Issuers and the Securitization
Subsidiary, (b) all sales of Securitization Assets and related assets to the
Securitization Subsidiary are made at fair market value (as determined in good
faith by VHS Holdco I) and (c) the financing terms, covenants, termination
events and other provisions thereof shall be market terms (as determined in good
faith by VHS Holdco I) and may include Standard Securitization Undertakings. The
grant of a security interest in any Securitization Assets of VHS Holdco I or any
Restricted Subsidiaries (other than a Securitization Subsidiary) to secure
Indebtedness under the Credit Agreement and any Refinancing Indebtedness with
respect thereto shall not be deemed a Qualified Securitization Financing.
"Rating Agency" means each of S&P and Xxxxx'x, or if S&P or Xxxxx'x
or both shall not make a rating on the Senior Discount Notes publicly available,
a nationally recognized statistical rating organization or organizations, within
the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by VHS
Holdco I as a replacement agency or agencies for S&P or Xxxxx'x, or both, as the
case may be.
"Registration Rights Agreements" means the Senior Discount
Registration Rights Agreement and the Senior Subordinated Registration Rights
Agreement.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Permanent Senior Discount Global Note" means a
permanent Senior Discount Global Note in the form of Exhibit A1 hereto bearing
the Senior Discount Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
at maturity of the Regulation S Temporary Senior Discount Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Senior Discount Global Note" means a
temporary Senior Discount Global Note in the form of Exhibit A2 hereto deposited
with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount at
maturity of the Senior Discount Notes initially sold in reliance on Rule 903 of
Regulation S.
"Representative" means the trustee, agent or representative (if any)
for the Credit Agreement.
28
"Responsible Officer" of any Person means any executive officer or
financial officer of such Person and any other officer or similar official
thereof responsible for the administration of the obligations of such Person in
respect of the Senior Discount Indenture.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period
as defined in Regulation S.
"Restricted Senior Discount Global Note" means a Senior Discount
Global Note bearing the Private Placement Legend.
"Restricted Subsidiary" means, at any time, any direct or indirect
Subsidiary of VHS Holdco I that is not then an Unrestricted Subsidiary; provided
that upon the occurrence of an Unrestricted Subsidiary ceasing to be an
Unrestricted Subsidiary, such Subsidiary shall be included in the definition of
Restricted Subsidiary. Unless otherwise indicated, all references to Restricted
Subsidiaries shall mean Restricted Subsidiaries of VHS Holdco I, including the
Discount Notes Co-Issuer. References herein to "Restricted Subsidiaries of VHS
Holdco II" shall mean the Restricted Subsidiaries of VHS Holdco II under the
terms of the Senior Subordinated Indenture.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Securitization Assets" means any accounts receivable, inventory,
royalty or revenue streams from sales of inventory subject to a Qualified
Securitization Financing.
"Securitization Fees" means reasonable distributions or payments
made directly or by means of discounts with respect to any participation
interest issued or sold in connection with, and other fees paid to a Person that
is not a Securitization Subsidiary in connection with any Qualified
Securitization Financing.
29
"Securitization Financing" means any transaction or series of
transactions that may be entered into by Vanguard or any of its Subsidiaries
pursuant to which Vanguard or any of its Subsidiaries may sell, convey or
otherwise transfer to (a) a Securitization Subsidiary (in the case of a transfer
by Vanguard or any of its Subsidiaries) and (b) any other Person (in the case of
a transfer by a Securitization Subsidiary), or may grant a security interest in,
any Securitization Assets (whether now existing or arising in the future) of
Vanguard or any of its Subsidiaries, and any assets related thereto, including,
without limitation, all collateral securing such Securitization Assets, all
contracts and all guarantees or other obligations in respect of such
Securitization Assets, proceeds of such Securitization Assets and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving Securitization Assets and any Hedging Obligations entered into by
Vanguard or any of its Subsidiaries in connection with such Securitization
Assets.
"Securitization Repurchase Obligation" means any obligation of a
seller of Securitization Assets in a Qualified Securitization Financing to
repurchase Securitization Assets arising as a result of a breach of a
representation, warranty or covenant or otherwise, including as a result of a
receivable or portion thereof becoming subject to any asserted defense, dispute,
off-set or counterclaim of any kind as a result of any action taken by, any
failure to take action by or any other event relating to the seller.
"Securitization Subsidiary" means a Wholly-Owned Subsidiary of
Vanguard (or another Person formed for the purposes of engaging in a Qualified
Securitization Financing in which Vanguard or any of its Subsidiaries makes an
Investment and to which Vanguard or any of its Subsidiaries transfers
Securitization Assets and related assets) which engages in no activities other
than in connection with the financing of Securitization Assets of Vanguard or
its Subsidiaries, all proceeds thereof and all rights (contractual and other),
collateral and other assets relating thereto, and any business or activities
incidental or related to such business, and which is designated by the Board of
Directors of Vanguard or such other Person (as provided below) as a
Securitization Subsidiary and (a) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (1) is guaranteed by Vanguard or
any of its Subsidiaries (excluding guarantees of obligations (other than the
principal of, and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (2) is recourse to or obligates Vanguard or any of its
Subsidiaries in any way other than pursuant to Standard Securitization
Undertakings or (3) subjects any property or asset of Vanguard or any of its
Subsidiaries, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (b) with which neither Vanguard or any of its Subsidiaries has any
material contract, agreement, arrangement or understanding other than on terms
which Vanguard reasonably believes to be no less favorable to Vanguard or any of
its Subsidiaries than those that might be obtained at the time from Persons that
are not Affiliates of Vanguard and (c) to which neither Vanguard nor any of its
Subsidiaries has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of Vanguard or such other Person
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the resolution of the Board of Directors of Vanguard or such other Person giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
30
"Senior Discount 144A Global Note" means a Senior Discount Global
Note substantially in the form of Exhibit A1 hereto bearing the Senior Discount
Global Note Legend and the Private Placement Legend and deposited with or on
behalf of, and registered in the name of, the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount at
maturity of the Senior Discount Notes sold in reliance on Rule 144A.
"Senior Discount Exchange Notes" means the Senior Discount Notes
issued in the Senior Discount Registered Exchange Offer pursuant to Section
2.06(f) hereof.
"Senior Discount Exchange Offer Registration Statement" has the
meaning set forth in the Senior Discount Registration Rights Agreement.
"Senior Discount Global Note Legend" means the legend set forth in
Section 2.06(g)(2) hereof, which is required to be placed on all Senior Discount
Global Notes issued under this Senior Discount Indenture.
"Senior Discount Global Notes" means, individually and collectively,
each of the Restricted Senior Discount Global Notes and the Unrestricted Senior
Discount Global Notes deposited with or on behalf of and registered in the name
of the Depository or its nominee, substantially in the form of Exhibit A1 hereto
and that bears the Senior Discount Global Note Legend and that has the "Schedule
of Exchanges of Interests in the Senior Discount Global Note" attached thereto,
issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(1),
2.06(d)(2) or 2.06(f) hereof.
"Senior Discount IAI Global Note" means a Senior Discount Global
Note substantially in the form of Exhibit A1 hereto bearing the Senior Discount
Global Note Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee that will
be issued in a denomination equal to the outstanding principal amount at
maturity of the Senior Discount Notes sold to Institutional Accredited
Investors.
"Senior Discount Indenture" means this Senior Discount Indenture, as
amended or supplemented from time to time.
"Senior Discount Note Guarantee" means the guarantee by the
Guarantor of the Issuers' obligations under this Senior Discount Indenture and
the Senior Discount Notes, executed pursuant to the provisions of this Senior
Discount Indenture.
"Senior Discount Notes" has the meaning assigned to it in the
preamble to this Senior Discount Indenture. The Initial Senior Discount Notes,
any Additional Senior Discount Notes and any Senior Discount Exchange Notes
shall be treated as a single class for all purposes under this Senior Discount
Indenture, and unless the context otherwise requires, all references to the
Senior Discount Notes shall include the Initial Senior Discount Notes, any
Additional Senior Discount Notes and any Senior Discount Exchange Notes.
"Senior Discount Registered Exchange Offer" has the meaning set
forth in the Senior Discount Registration Rights Agreement.
31
"Senior Discount Registration Rights Agreement" means the Senior
Discount Registration Rights Agreement, dated as of September 23, 2004, among
the Issuers, the Guarantor and the Initial Purchasers named therein, as such
agreement may be amended, modified or supplemented from time to time and, with
respect to any Additional Senior Discount Notes, one or more registration rights
agreements among the Issuers, the Guarantor and the other parties thereto, as
such agreement(s) may be amended, modified or supplemented from time to time,
relating to rights given by the Issuers to the purchasers of Additional Senior
Discount Notes to register such Additional Senior Discount Notes under the
Securities Act.
"Senior Discount Regulation S Global Note" means a Regulation S
Temporary Senior Discount Global Note or Regulation S Permanent Senior Discount
Global Note, as appropriate.
"Senior Subordinated Indenture" means the indenture, dated September
September 23, 2004 by and among VHS Holdco II, Vanguard Holding Company II,
Inc., the Guarantor (as defined therein) and U.S. Bank National Association as
trustee.
"Senior Subordinated Notes" means the $575.0 million aggregate
principal amount of the 9% Senior Subordinated Notes due 2014 of VHS Holdco II
and Vanguard Holding Company II, Inc. issued under the Senior Subordinated
Indenture.
"Senior Subordinated Registration Rights Agreement" shall have the
meaning ascribed to such term in the Senior Subordinated Indenture.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Senior Discount Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "significant subsidiary" of VHS Holdco I as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act, as such
Regulation is in effect on the Issue Date.
"Sponsors" means one or more investment funds controlled by The
Blackstone Group and its Affiliates and one or more investment funds controlled
by Xxxxxx Xxxxxxx Capital Partners and its Affiliates.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Vanguard or any of its
Subsidiaries which Vanguard has determined in good faith to be customary in a
Securitization Financing, including, without limitation, those relating to the
servicing of the assets of a Securitization Subsidiary, it being understood that
any Securitization Repurchase Obligation shall be deemed to be a Standard
Securitization Undertaking.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the day on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
32
"Subordinated Indebtedness" means any Indebtedness of either of the
Issuers that is by its terms subordinated in right of payment to the Senior
Discount Notes.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity, of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and
(2) any partnership, joint venture, limited liability company or
similar entity of which (A) more than 50% of the capital accounts, distribution
rights, total equity and voting interests or general or limited partnership
interests, as applicable, are owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof whether in the form of membership, general, special or
limited partnership or otherwise and (B) such Person or any Restricted
Subsidiary of such Person is a controlling general partner or otherwise controls
such entity.
"Tax Distribution" means any distribution pursuant to Section
4.07(b)(9) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb).
"Total Assets" means the total consolidated assets of VHS Holdco I
and its Restricted Subsidiaries, as shown on the most recent balance sheet of
VHS Holdco I.
"Transactions" means the transactions contemplated by the Agreement
and Plan of Merger by and among VHS Holdings LLC, a Delaware limited liability
company, Health Systems Acquisition Corp., a Delaware corporation and
Wholly-Owned Subsidiary of VHS Holdings LLC, and Vanguard, including the related
equity contributions, borrowings under the Credit Agreement, the offering of the
Senior Subordinated Notes and the Offer and the repayment of other indebtedness
of Vanguard and its Subsidiaries, in each case as described in the Offering
Memorandum under the caption "The Transactions."
"Treasury Rate" means, as of the applicable redemption date, the
yield to maturity as of such redemption date of United States Treasury
securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15 (519) that has become publicly
available at least two Business Days prior to such redemption date (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the period from such redemption date
to October 1, 2009; provided, that if the period from such redemption date
October 1, 2009, is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year will be used.
"Trustee" means U.S. Bank National Association until a successor
replaces it in accordance with the applicable provisions of this Senior Discount
Indenture and thereafter means the successor serving hereunder.
33
"Unrestricted Definitive Note" means a Definitive Note that does not
bear and is not required to bear the Private Placement Legend.
"Unrestricted Senior Discount Global Note" means a Senior Discount
Global Note that does not bear and is not required to bear the Private Placement
Legend.
"Unrestricted Subsidiary" means (a) any Subsidiary of VHS Holdco I
that at the time of determination is an Unrestricted Subsidiary (as designated
by the Board of Directors of VHS Holdco I, as provided below) and (b) any
Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of VHS Holdco I may designate any Subsidiary
of VHS Holdco I (including any existing Subsidiary and any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary
or any of its Subsidiaries owns any Equity Interests or Indebtedness (other than
Indebtedness represented by short-term, open account working capital rates
entered into in the ordinary course of business for cash management purposes and
consistent with past practice) of, or owns or holds any Lien on, any property
of, VHS Holdco I or any Subsidiary of VHS Holdco I (other than any Subsidiary of
the Subsidiary to be so designated); provided that:
(1) any Unrestricted Subsidiary must be an entity of which
shares of the Capital Stock or other equity interests (including
partnership interests) entitled to cast at least a majority of the votes
that may be cast by all shares or equity interests having ordinary voting
power for the election of directors or other governing body are owned,
directly or indirectly, by VHS Holdco I;
(2) such designation complies with Section 4.07 hereof; and
(3) each of (A) the Subsidiary to be so designated and (B) its
Subsidiaries has not at the time of designation, and does not thereafter,
create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Indebtedness pursuant to which the
lender has recourse to any of the assets of VHS Holdco I or any Restricted
Subsidiary.
The Board of Directors of VHS Holdco I may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that, immediately after
giving effect to such designation:
(i) no Default or Event of Default shall have occurred
and be continuing. and
(ii) either (x) the Fixed Charge Coverage Ratio would be
at least 2.00 to 1.00 or (y) the Fixed Charge Coverage Ratio would
be greater than such ratio immediately prior to such designation, in
each case on a pro forma basis taking into account such designation.
Any such designation by the Board of Directors of VHS Holdco I shall be
notified by the Issuers to the Trustee by promptly filing with the Trustee a
copy of the board resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
34
"U.S. Person" means a U.S. Person as defined in Rule 902(k)
promulgated under the Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (A) the
amount of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final
maturity, in respect of the Indebtedness, by (B) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
Person, 100% of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares or nominee or other similar
shares required pursuant to applicable law) shall at the time be owned by such
Person or by one or more Wholly-Owned Subsidiaries of such Person or by such
Person and one or more Wholly-Owned Subsidiaries of such Person.
Section 1.02 Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction"............................................................... 4.11
"Asset Sale Offer".................................................................... 3.09
"Authentication Order"................................................................ 2.02
"Change of Control Offer"............................................................. 4.14
"Change of Control Payment"........................................................... 4.14
"Change of Control Payment Date"...................................................... 4.14
"Covenant Defeasance"................................................................. 8.03
"Discount Note Payments" ............................................................. 10.01
"DTC"................................................................................. 2.03
"Event of Default".................................................................... 6.01
"Excess Proceeds"..................................................................... 4.10
"incur"............................................................................... 4.09
"Legal Defeasance".................................................................... 8.02
"Offer Period"........................................................................ 3.09
"Paying Agent"........................................................................ 2.03
"Payment Blockage Notice" ............................................................ 10.03
"Permitted Debt"...................................................................... 4.09
"Registrar"........................................................................... 2.03
"Restricted Payments"................................................................. 4.07
35
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Senior Discount Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Senior
Discount Indenture.
The following TIA terms used in this Senior Discount Indenture have
the following meanings:
"indenture securities" means the Senior Discount Notes;
"indenture security Holder" means a Holder of a Senior Discount
Note;
"indenture to be qualified" means this Senior Discount Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and "obligor" on the Senior Discount Notes and the Senior Discount Note
Guarantees means the Issuers and the Guarantor, respectively, and any successor
obligor upon the Senior Discount Notes and the Senior Discount Note Guarantees,
respectively.
All other terms used in this Senior Discount Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
and
(7) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE II
THE NOTES
Section 2.01 Form and Dating. (a) General. The Senior Discount
Notes and the Trustee's certificate of authentication will be substantially in
the form of Exhibits A1 and A2
36
hereto. The Senior Discount Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage (provided that any such notation,
legend or endorsement required by usage is in a form reasonably acceptable to
the Issuers). Each Senior Discount Note will be dated the date of its
authentication. The Senior Discount Notes shall be in denominations of $1,000
principal amount at maturity and integral multiples of $1,000 principal amount
at maturity in excess thereof.
The terms and provisions contained in the Senior Discount Notes will
constitute, and are hereby expressly made, a part of this Senior Discount
Indenture and the Issuers, the Guarantor and the Trustee, by their execution and
delivery of this Senior Discount Indenture, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of any
Senior Discount Note conflicts with the express provisions of this Senior
Discount Indenture, the provisions of this Senior Discount Indenture shall
govern and be controlling.
(b) Senior Discount Global Notes. Senior Discount Notes issued in
global form will be substantially in the form of Exhibits A1 or A2 hereto
(including the Senior Discount Global Note Legend thereon and the "Schedule of
Exchanges of Interests in the Senior Discount Global Note" attached thereto).
Senior Discount Notes issued in definitive form will be substantially in the
form of Exhibit A1 hereto (but without the Senior Discount Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Senior
Discount Global Note" attached thereto). Each Senior Discount Global Note will
represent such of the outstanding Senior Discount Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
at maturity of outstanding Senior Discount Notes from time to time endorsed
thereon and that the aggregate principal amount at maturity of outstanding
Senior Discount Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Senior Discount Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount at maturity of outstanding Senior
Discount Notes represented thereby will be made by the Trustee or the Custodian,
at the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06 hereof and shall be made on the
records of the Trustee and the Depositary.
(c) Temporary Senior Discount Global Notes. Senior Discount Notes
offered and sold in reliance on Regulation S will be issued initially in the
form of the Regulation S Temporary Senior Discount Global Note, which will be
deposited on behalf of the purchasers of the Senior Discount Notes represented
thereby with the Trustee, at its New York office, as custodian for the
Depositary, and registered in the name of the Depositary or the nominee of the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Issuers and authenticated by the Trustee as
hereinafter provided. The Restricted Period will be terminated upon the receipt
by the Trustee of:
(1) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream certifying that they
have received certification of non-United States beneficial ownership of
100% of the aggregate principal amount at maturity of the Regulation S
Temporary Senior Discount Global Note (except to the extent of any
Beneficial Owners thereof who acquired an interest therein
37
during the Restricted Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a
beneficial ownership interest in a Senior Discount 144A Global Note or an
IAI Senior Discount Global Note bearing a Private Placement Legend, all as
contemplated by Section 2.06(b) hereof); and
(2) an Officers' Certificate from the Issuers.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Senior Discount Global Note will be
exchanged for beneficial interests in the Regulation S Permanent Senior Discount
Global Note pursuant to the Applicable Procedures. Simultaneously with the
authentication of the Regulation S Permanent Senior Discount Global Note, the
Trustee will cancel the Regulation S Temporary Senior Discount Global Note. The
aggregate principal amount at maturity of the Regulation S Temporary Senior
Discount Global Note and the Regulation S Permanent Senior Discount Global Note
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(d) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Temporary Senior Discount Global
Note and the Regulation S Permanent Senior Discount Global Note that are held by
Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication. At least one Officer must
sign the Senior Discount Notes for the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Senior Discount Note no longer
holds that office at the time a Senior Discount Note is authenticated, the
Senior Discount Note will nevertheless be valid.
A Senior Discount Note will not be valid until authenticated by the
manual signature of the Trustee. The signature will be conclusive evidence that
the Senior Discount Note has been authenticated under this Senior Discount
Indenture.
The Trustee will, upon receipt of a written order of the Issuers
signed by two Officers of the Issuers (an "Authentication Order"), authenticate
Senior Discount Notes for original issue that may be validly issued under this
Senior Discount Indenture, including any Additional Senior Discount Notes and
any Senior Discount Exchange Notes. The aggregate principal amount at maturity
of Senior Discount Notes outstanding at any time may not exceed the aggregate
principal amount at maturity of Senior Discount Notes authorized for issuance by
the Issuers pursuant to one or more Authentication Orders, except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Senior Discount Notes. An authenticating agent may
authenticate Senior Discount Notes whenever the Trustee may do so. Each
reference in this Senior Discount Indenture to
38
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Issuers.
Section 2.03 Registrar and Paying Agent. The Issuers will maintain
an office or agency where Senior Discount Notes may be presented for
registration of transfer or for exchange ("Registrar") and an office or agency
where Senior Discount Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register of the Senior Discount Notes and of their
transfer and exchange. The Issuers may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Issuers
may change any Paying Agent or Registrar without notice to any Holder. The
Issuers will notify the Trustee in writing of the name and address of any Agent
not a party to this Senior Discount Indenture. If the Issuers fail to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Issuers or any of their Subsidiaries may act as Paying Agent or
Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC")
to act as Depositary with respect to the Senior Discount Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Senior Discount
Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust. The Issuers will
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment Accreted Value or principal of,
or interest, or premium, or Additional Interest, if any, or interest on the
Senior Discount Notes, and will notify the Trustee of any default by the Issuers
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Issuers
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Issuers or a Subsidiary) will have no further liability for the money. If the
Issuers or a Subsidiary acts as Paying Agent, it will segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Issuers, the Trustee will serve as Paying Agent for the Senior Discount Notes.
Section 2.05 Holder Lists. The Trustee will preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA Section
312(a). If the Trustee is not the Registrar, the Issuers will furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Senior Discount Notes and the Issuers shall otherwise comply
with TIA Section 312(a).
Section 2.06 Transfer and Exchange. (a) Transfer and Exchange of
Senior Discount Global Notes. A Senior Discount Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to
39
a successor Depositary or a nominee of such successor Depositary. All Senior
Discount Global Notes will be exchanged by the Issuers for Certificated Notes
if:
(1) the Issuers deliver in writing to the Trustee notice that
the Depositary is unwilling or unable to continue to act as Depositary or
that it is no longer a clearing agency registered under the Exchange Act
and, in either case, a successor Depositary is not appointed by the
Issuers within 90 days after the date of such notice or cessation;
(2) the Issuers in their sole discretion determine that the
Senior Discount Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and deliver a written notice to such effect
to the Trustee; provided that in no event shall the Regulation S Temporary
Senior Discount Global Note be exchanged by the Issuers for Definitive
Notes prior to (A) the expiration of the Restricted Period and (B) the
receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act; or
(3) there has occurred and is continuing an Event of Default
and the registry has received a request from the Depositary to issue the
Certificated Notes.
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Senior Discount Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Senior
Discount Note authenticated and delivered in exchange for, or in lieu of, a
Senior Discount Global Note or any portion thereof, pursuant to this Section
2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the
form of, and shall be, a Senior Discount Global Note. A Senior Discount Global
Note may not be exchanged for another Senior Discount Note other than as
provided in this Section 2.06(a), however, beneficial interests in a Senior
Discount Global Note may be transferred and exchanged as provided in Section
2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Senior
Discount Global Notes. The transfer and exchange of beneficial interests in the
Senior Discount Global Notes will be effected through the Depositary, in
accordance with the provisions of this Senior Discount Indenture and the
Applicable Procedures. Beneficial interests in the Restricted Senior Discount
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Senior Discount Global Notes also will require
compliance with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Senior
Discount Global Note. Beneficial interests in any Restricted Senior
Discount Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same Restricted Senior
Discount Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that prior to
the expiration of the Restricted Period, transfers of beneficial interests
in the Regulation S Temporary Senior Discount Global Note may not be made
to a U.S. Person or for the account or
40
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Senior Discount Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Senior Discount Global Note. No
written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests
in Senior Discount Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(1) above, the transferor of such beneficial interest must deliver
to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to
be credited a beneficial interest in another Senior Discount Global
Note in an amount equal to the beneficial interest to be transferred
or exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued
a Definitive Note in an amount equal to the beneficial interest to
be transferred or exchanged; and
(ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided, that in no event shall
Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Regulation S Temporary Senior Discount
Global Note prior to (A) the expiration of the Restricted Period and
(B) the receipt by the Registrar of any certificates required
pursuant to Rule 903 under the Securities Act.
Upon consummation of a Senior Discount Registered Exchange Offer by the Issuers
in accordance with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(2) shall be deemed to have been satisfied upon receipt by the Registrar
of the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Senior Discount Global
Notes. Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Senior Discount Global Notes contained in this Senior
Discount Indenture and the Senior Discount Notes or otherwise applicable under
the Securities Act, the Trustee shall
41
adjust the principal amount at maturity of the relevant Senior Discount Global
Note(s) pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted
Senior Discount Global Note. A beneficial interest in any Restricted
Senior Discount Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another
Restricted Senior Discount Global Note if the transfer complies with the
requirements of Section 2.06(b)(2) above and the Registrar receives the
following:
(A) if the transferee will take delivery in the form of
a beneficial interest in the Senior Discount 144A Global Note, then
the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Temporary Senior Discount
Global Note or the Regulation S Permanent Senior Discount Global
Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transferee will take delivery in the form of
a beneficial interest in the IAI Senior Discount Global Note, then
the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion of
Counsel required by item (3)(d) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Senior Discount Global Note for Beneficial Interests in an
Unrestricted Senior Discount Global Note. A beneficial interest in any
Restricted Senior Discount Global Note may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Senior Discount
Global Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Senior Discount Global
Note if the exchange or transfer complies with the requirements of Section
2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to
the Senior Discount Registered Exchange Offer in accordance with the
Senior Discount Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a Broker-Dealer,
(ii) a Person participating in the distribution of the Senior
Discount Exchange Notes or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Discount
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Discount Registration Rights Agreement; or
42
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Senior Discount Global Note proposes to exchange
such beneficial interest for a beneficial interest in an
Unrestricted Senior Discount Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in
a Restricted Senior Discount Global Note proposes to transfer
such beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Senior Discount Global Note, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Senior Discount Global Note has not yet
been issued, the Issuers shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one
or more Unrestricted Senior Discount Global Notes in an aggregate principal
amount at maturity equal to the aggregate principal amount at maturity of
beneficial interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Senior Discount Global Note
cannot be exchanged for, or transferred to Persons who take delivery thereof in
the form of, a beneficial interest in a Restricted Senior Discount Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(1) Beneficial Interests in Restricted Senior Discount Global
Notes to Restricted Definitive Notes. If any holder of a beneficial
interest in a Restricted Senior Discount Global Note proposes to exchange
such beneficial interest for a Restricted Definitive Note or to transfer
such beneficial interest to a Person who takes delivery thereof in the
form of a Restricted Definitive Note, then, upon receipt by the Registrar
of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Senior Discount Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
43
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than
those listed in subparagraphs (B) through (D) above, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3)(d) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Issuers or any of their Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of at maturity the
applicable Senior Discount Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount at maturity. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted Senior
Discount Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Trustee shall deliver such Definitive Notes to the Persons in whose names
such Senior Discount Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Senior Discount Global Note
pursuant to this Section 2.06(c)(1) shall bear the Private Placement Legend and
shall be subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Regulation S Temporary Senior
Discount Global Note to Definitive Notes. Notwithstanding Sections
2.06(c)(1)(A) and (C) hereof, a beneficial interest in the Regulation S
Temporary Senior Discount Global Note may not be exchanged for a
Definitive Note or transferred to a Person who takes delivery thereof
44
in the form of a Definitive Note prior to (A) the expiration of the
Restricted Period and (B) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act,
except in the case of a transfer pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 903 or
Rule 904.
(3) Beneficial Interests in Restricted Senior Discount Global
Notes to Unrestricted Definitive Notes. A holder of a beneficial interest
in a Restricted Senior Discount Global Note may exchange such beneficial
interest for an Unrestricted Definitive Note or may transfer such
beneficial interest to a Person who takes delivery thereof in the form of
an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Senior Discount Registered Exchange Offer in accordance with the
Senior Discount Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the transferee,
in the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Senior Discount Exchange
Notes or (iii) a Person who is an affiliate (as defined in Rule 144)
of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Discount
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Discount Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Senior Discount Global Note proposes to exchange
such beneficial interest for an Unrestricted Definitive Note,
a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof;
or
(ii) if the holder of such beneficial interest in
a Restricted Senior Discount Global Note proposes to transfer
such beneficial interest to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.
45
(4) Beneficial Interests in Unrestricted Senior Discount
Global Notes to Unrestricted Definitive Notes. If any holder of a
beneficial interest in an Unrestricted Senior Discount Global Note
proposes to exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
the aggregate principal amount at maturity of the applicable Senior
Discount Global Note to be reduced accordingly pursuant to Section 2.06(h)
hereof, and the Issuers will execute and the Trustee will authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount at maturity. Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.06(c)(4)
will be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
requests through instructions to the Registrar from or through the
Depositary and the Participant or Indirect Participant. The Trustee will
deliver such Definitive Notes to the Persons in whose names such Senior
Discount Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(4) will not
bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Senior Discount Global Notes. If any Holder of a Restricted
Definitive Note proposes to exchange such note for a beneficial interest
in a Restricted Senior Discount Global Note or to transfer such Restricted
Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Senior Discount Global Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such note for a beneficial interest in a
Restricted Senior Discount Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications
in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;
46
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance on
an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D) above,
a certificate to the effect set forth in Exhibit B hereto, including
the certifications, certificates and Opinion of Counsel required by
item (3)(d) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Issuers or any of their Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount at maturity of, in the case of clause
(A) above, the appropriate Restricted Senior Discount Global Note, in the case
of clause (B) above, the Senior Discount 144A Global Note, in the case of clause
(C) above, the Senior Discount Regulation S Global Note, and in all other cases,
the IAI Senior Discount Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Senior Discount Global Notes. A Holder of a Restricted
Definitive Note may exchange such note for a beneficial interest in an
Unrestricted Senior Discount Global Note or transfer such Restricted
Definitive Note to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Senior Discount Global Note only
if:
(A) such exchange or transfer is effected pursuant to
the Senior Discount Registered Exchange Offer in accordance with the
Senior Discount Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i)
a Broker-Dealer, (ii) a Person participating in the distribution of
the Senior Discount Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Discount
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Discount Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes
proposes to exchange such notes for a beneficial interest in
the Unrestricted Senior
47
Discount Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(ii) if the Holder of such Definitive Notes
proposes to transfer such notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Senior Discount Global Note, a certificate from
such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount at maturity of
the Unrestricted Senior Discount Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Senior Discount Global Notes. A Holder of an Unrestricted
Definitive Note may exchange such note for a beneficial interest in an
Unrestricted Senior Discount Global Note or transfer such Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Senior Discount Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee will
cancel the applicable Unrestricted Definitive Note and increase or cause
to be increased the aggregate principal amount at maturity of one of the
Unrestricted Senior Discount Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or (3)
above at a time when an Unrestricted Senior Discount Global Note has not yet
been issued, the Issuers will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate one or
more Unrestricted Senior Discount Global Notes in an aggregate principal amount
at maturity equal to the principal amount at maturity of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
48
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and registered
in the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Senior Discount Registered Exchange Offer in accordance with the
Senior Discount Registration Rights Agreement and the Holder, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i)
a Broker-Dealer, (ii) a Person participating in the distribution of
the Senior Discount Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Senior Discount
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Senior Discount Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive
Notes proposes to exchange such notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(d)
thereof; or
(ii) if the Holder of such Restricted Definitive
Notes proposes to transfer such notes to a Person who shall
take delivery thereof
49
in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain compliance
with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Senior Discount Registered Exchange Offer. Upon the occurrence
of the Senior Discount Registered Exchange Offer in accordance with the Senior
Discount Registration Rights Agreement, the Issuers will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
will authenticate:
(1) one or more Unrestricted Senior Discount Global Notes in
an aggregate principal amount equal at maturity to the principal amount at
maturity of the beneficial interests in the Restricted Senior Discount
Global Notes accepted for exchange in the Senior Discount Registered
Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that they are not Broker-Dealers, (B) they are not
participating in a distribution of the Senior Discount Exchange Notes and
(C) they are not affiliates (as defined in Rule 144) of the Issuers; and
(2) Unrestricted Definitive Notes in an aggregate principal
amount at maturity equal to the principal amount at maturity of the
Restricted Definitive Notes accepted for exchange in the Senior Discount
Registered Exchange Offer by Persons that certify in the applicable
Letters of Transmittal that (A) they are not Broker-Dealers, (B) they are
not participating in a distribution of the Senior Discount Exchange Notes
and (C) they are not affiliates (as defined in Rule 144) of the Issuers.
Concurrently with the issuance of such notes, the Trustee will cause
the aggregate principal amount at maturity of the applicable Restricted Senior
Discount Global Notes to be reduced accordingly, and the Issuers will execute
and the Trustee will authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Unrestricted Definitive Notes in the
appropriate principal amount at maturity.
(g) Legends. The following legends will appear on the face of all
Senior Discount Global Notes and Definitive Notes issued under this Senior
Discount Indenture unless specifically stated otherwise in the applicable
provisions of this Senior Discount Indenture.
50
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Senior Discount Global Note and each Definitive Note (and all Senior
Discount Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
FOLLOWING SENTENCE, BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER: (1) REPRESENTS THAT: (A) IT AND ANY
ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED INSTITUTIONAL BUYER"
(WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT
IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
ACCOUNT, (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN
THE MEANING OF RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), OR (C) IT IS NOT A
U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT), AND (2) AGREES FOR THE BENEFIT OF THE ISSUERS THAT IT WILL NOT
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY
BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES
ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND ONLY: (A) TO THE ISSUERS, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, (C)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 901 OF REGULATION S UNDER THE SECURITIES ACT,
(E) IN A PRINCIPAL AMOUNT AT MATURITY OF NOT LESS THAN $100,000, TO
AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
DELIVERS TO THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE
FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE, OR (F) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF
WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE
TRUSTEE. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE
WITH (2)(E) OR (F) ABOVE, THE ISSUERS RESERVE THE RIGHT TO REQUIRE
THE DELIVERY OF SUCH LEGAL OPINIONS,
51
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN
ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN
COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE
144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT."
(B) Notwithstanding the foregoing, any Senior Discount
Global Note or Definitive Note issued pursuant to subparagraphs
(b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of
this Section 2.06 (and all Senior Discount Notes issued in exchange
therefor or substitution thereof) will not bear the Private
Placement Legend.
(2) Senior Discount Global Note Legend. Each Senior Discount
Global Note will bear a legend in substantially the following form:
"THIS SENIOR DISCOUNT GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE SENIOR DISCOUNT INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.01 AND SECTION 2.06 OF THE SENIOR
DISCOUNT INDENTURE, (2) THIS SENIOR DISCOUNT GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE INDENTURE, (3) THIS SENIOR DISCOUNT GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (4) THIS SENIOR DISCOUNT GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX)
("XXX"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME
52
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Regulation S Temporary Senior Discount Global Note Legend.
The Regulation S Temporary Senior Discount Global Note will bear a Legend
in substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY SENIOR DISCOUNT
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE SENIOR
DISCOUNT INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY SENIOR DISCOUNT
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST
HEREON."
(h) Cancellation and/or Adjustment of Senior Discount Global Notes.
At such time as all beneficial interests in a particular Senior Discount Global
Note have been exchanged for Definitive Notes or a particular Senior Discount
Global Note has been redeemed, repurchased or canceled in whole and not in part,
each such Senior Discount Global Note will be returned to or retained and
canceled by the Trustee in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in a Senior Discount
Global Note is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Senior Discount Global
Note or for Definitive Notes, the principal amount at maturity of Senior
Discount Notes represented by such Senior Discount Global Note will be reduced
accordingly and an endorsement will be made on such Senior Discount Global Note
by the Trustee or by the Depositary at the direction of the Trustee to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Senior Discount Global Note, such other Senior
Discount Global Note will be increased accordingly and an endorsement will be
made on such Senior Discount Global Note by the Trustee or by the Depositary at
the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the
Issuers will execute and the Trustee will authenticate Senior Discount
Global Notes and Definitive Notes upon receipt of an Authentication Order
in accordance with Section 2.02 hereof or at the Registrar's request.
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(2) No service charge will be made to a Holder of a beneficial
interest in a Senior Discount Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Issuers may
require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.10, 4.14 and 9.05 hereof).
(3) The Registrar will not be required to register the
transfer of or exchange of any Senior Discount Note selected for
redemption in whole or in part, except the unredeemed portion of any
Senior Discount Note being redeemed in part.
(4) All Senior Discount Global Notes and Definitive Notes
issued upon any registration of transfer or exchange of Senior Discount
Global Notes or Definitive Notes will be the valid obligations of the
Issuers, evidencing the same debt, and entitled to the same benefits under
this Senior Discount Indenture, as the Senior Discount Global Notes or
Definitive Notes surrendered upon such registration of transfer or
exchange.
(5) The Issuers will not be required:
(A) to issue, to register the transfer of or to exchange
any Senior Discount Notes during a period beginning at the opening
of business 15 days before the day of any selection of Senior
Discount Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection;
(B) to register the transfer of or to exchange any
Senior Discount Note selected for redemption in whole or in part,
except the unredeemed portion of any Senior Discount Note being
redeemed in part; or
(C) to register the transfer of or to exchange a Senior
Discount Note between a record date and the next succeeding interest
payment date.
(6) Prior to due presentment for the registration of a
transfer of any Senior Discount Note, the Trustee, any Agent and the
Issuers may deem and treat the Person in whose name any Senior Discount
Note is registered as the absolute owner of such Senior Discount Note for
the purpose of receiving payment of principal of and interest on such
Senior Discount Notes and for all other purposes, and none of the Trustee,
any Agent or the Issuers shall be affected by notice to the contrary.
(7) The Trustee will authenticate Senior Discount Global Notes
and Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
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Section 2.07 Replacement Notes. If any mutilated Senior Discount
Note is surrendered to the Trustee or the Issuers and the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Senior
Discount Note, the Issuers will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Senior Discount Note if
the Trustee's requirements are met. If required by the Trustee or the Issuers,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Senior Discount Note is replaced. The Issuers may charge for their expenses in
replacing a Senior Discount Note.
Every replacement Senior Discount Note is an additional obligation
of the Issuers and will be entitled to all of the benefits of this Senior
Discount Indenture equally and proportionately with all other Senior Discount
Notes duly issued hereunder.
Section 2.08 Outstanding Notes. The Senior Discount Notes
outstanding at any time are all the Senior Discount Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Senior Discount Global Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section 2.08 as not outstanding. Except as set forth in Section 2.09
hereof, a Senior Discount Note does not cease to be outstanding because the
Issuers or an Affiliate of the Issuers holds the Senior Discount Note; however,
Senior Discount Notes held by the Issuers or a Subsidiary of the Issuers shall
not be deemed to be outstanding for purposes of Section 3.07(a) hereof.
If a Senior Discount Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Senior Discount Note is held by a protected
purchaser.
If all Accreted Value or premium, if any and interest then due any
Senior Discount Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuers, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay all Accreted Value or premium, if any or interest then due on
the Senior Discount Notes payable on that date, then on and after that date such
Senior Discount Notes will be deemed to be no longer outstanding and will cease
to accrue interest.
Section 2.09 Treasury Notes. In determining whether the Holders of
the required principal amount at maturity of Senior Discount Notes have
concurred in any direction, waiver or consent, Senior Discount Notes owned by
the Issuers or any Guarantor, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuers or any Guarantor, will be considered as though not outstanding, except
that for the purposes of determining whether the Trustee will be protected in
relying on any such direction, waiver or consent, only Senior Discount Notes
that a Responsible Officer of the Trustee knows are so owned will be so
disregarded.
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Section 2.10 Temporary Notes. Until certificates representing Senior
Discount Notes are ready for delivery, the Issuers may prepare and the Trustee,
upon receipt of an Authentication Order, will authenticate temporary Senior
Discount Notes. Temporary Senior Discount Notes will be substantially in the
form of certificated Senior Discount Notes but may have variations that the
Issuers consider appropriate for temporary Senior Discount Notes and as may be
reasonably acceptable to the Trustee. Without unreasonable delay, the Issuers
will prepare and the Trustee will authenticate definitive Senior Discount Notes
in exchange for temporary Senior Discount Notes.
Holders of temporary Senior Discount Notes will be entitled to all
of the benefits of this Senior Discount Indenture.
Section 2.11 Cancellation. The Issuers at any time may deliver
Senior Discount Notes to the Trustee for cancellation. The Registrar and Paying
Agent will forward to the Trustee any Senior Discount Notes surrendered to them
for registration of transfer, exchange or payment. The Trustee and no one else
will cancel all Senior Discount Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and will dispose of such canceled
Senior Discount Notes in its customary manner (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
canceled Senior Discount Notes will be delivered to the Issuers. The Issuers may
not issue new Senior Discount Notes to replace Senior Discount Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest. If the Issuers default in a payment
of interest on the Senior Discount Notes, they will pay the defaulted interest
in any lawful manner plus, to the extent lawful, interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date, in each case at the rate provided in the Senior Discount Notes and
in Section 4.01 hereof. The Issuers will notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Senior Discount Note
and the date of the proposed payment. The Issuers will fix or cause to be fixed
each such special record date and payment date; provided that no such special
record date may be less than 10 days prior to the related payment date for such
defaulted interest. At least 15 days before the special record date, the Issuers
(or, upon the written request of the Issuers, the Trustee in the name and at the
expense of the Issuers) will mail or cause to be mailed to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13 CUSIP Numbers. The Issuers in issuing the Senior
Discount Notes may use "CUSIP" numbers (if then generally in use), and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience
to Holders; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Senior
Discount Notes or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the Senior
Discount Notes, and any such redemption shall not be affected by any defect in
or omission of such numbers. The Issuers will promptly notify the Trustee in
writing of any change in the "CUSIP" numbers.
Section 2.14 Issuance of Additional Senior Discount Notes. The
Issuers will be entitled, from time to time, subject to its compliance with
Section 4.09 hereof, without consent of
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the Holders, to issue Additional Senior Discount Notes under this Senior
Discount Indenture with identical terms as the Initial Senior Discount Notes
issued on the Issue Date other than with respect to (a) the date of issuance,
(b) the issue price, (c) the amount of interest payable on the first cash
interest payment date and (d) any adjustments in order to conform to and ensure
compliance with the Securities Act (or other applicable securities laws). The
Initial Senior Discount Notes issued on the Issue Date, any Additional Senior
Discount Notes and all Senior Discount Exchange Notes issued in exchange
therefor will be treated as a single class for all purposes under this Senior
Discount Indenture.
With respect to any Additional Senior Discount Notes, the Issuers
will set forth in an Officer's Certificate pursuant to a resolution of the Board
of Directors of the Issuers, copies of which will be delivered to the Trustee,
the following information:
(1) the aggregate principal amount at maturity of such
Additional Senior Discount Notes to be authenticated and delivered
pursuant to this Senior Discount Indenture;
(2) the issue price, the issue date and the CUSIP number of
such Additional Senior Discount Notes; and
(3) whether such Additional Senior Discount Notes will be
subject to transfer restrictions or will be issued in the form of Senior
Discount Exchange Notes.
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee. If the Issuers elect to redeem
Senior Discount Notes pursuant to the optional redemption provisions of Section
3.07 hereof, it must furnish to the Trustee, at least 30 days but not more than
60 days before a redemption date, an Officers' Certificate setting forth:
(1) the clause of this Senior Discount Indenture pursuant to
which the redemption shall occur;
(2) the redemption date;
(3) the aggregate principal amount at maturity of Senior
Discount Notes to be redeemed;
(4) the redemption price; and
(5) applicable CUSIP Numbers.
Section 3.02 Selection of Notes to Be Redeemed or Purchased. If less
than all of the Senior Discount Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Senior Discount Notes for
redemption or purchase as follows:
57
(1) if the Senior Discount Notes are listed on any national
securities exchange, in compliance with the requirements of the principal
national securities exchange on which the Senior Discount Notes are
listed; or
(2) if the Senior Discount Notes are not listed on any
national securities exchange, on a pro rata basis, by lot or by such
method as the Trustee deems fair and appropriate.
In the event of partial redemption or purchase by lot, the
particular Senior Discount Notes to be redeemed or purchased will be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days prior
to the redemption or purchase date by the Trustee from the outstanding Senior
Discount Notes not previously called for redemption or purchase.
The Trustee will promptly notify the Company in writing of the
Senior Discount Notes selected for redemption or purchase and, in the case of
any Senior Discount Note selected for partial redemption or purchase, the
principal amount at maturity thereof to be redeemed or purchased. Senior
Discount Notes and portions of Senior Discount Notes selected will be in amounts
of $1,000 principal amount at maturity or whole multiples of $1,000 principal
amount at maturity; provided that no Senior Discount Notes of $1,000 principal
amount at maturity or less shall be redeemed or purchased in part. Except as
provided in the preceding sentence, provisions of this Senior Discount Indenture
that apply to Senior Discount Notes called for redemption or purchase also apply
to portions of Senior Discount Notes called for redemption.
Section 3.03 Notice of Redemption(a) . (a) At least 30 days but not
more than 60 days before a redemption date, the Issuers will mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Senior
Discount Notes are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of the Senior Discount
Notes or a satisfaction and discharge of this Senior Discount Indenture pursuant
to Articles 8 or 12 hereof.
(b) The notice will identify the Senior Discount Notes (including
CUSIP Numbers) to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Senior Discount Note is being redeemed in part, the
portion of the principal amount at maturity of such Senior Discount Note
to be redeemed and that, after the redemption date upon surrender of such
Senior Discount Note, a new Senior Discount Note or Senior Discount Notes
in principal amount at maturity equal to the unredeemed portion of the
original Senior Discount Note will be issued upon cancellation of the
original Senior Discount Note;
(4) the name and address of the Paying Agent;
58
(5) that Senior Discount Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest on Senior Discount Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Senior Discount Notes and/or Section
of this Senior Discount Indenture pursuant to which the Senior Discount
Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Senior Discount Notes.
At the Issuers' request, the Trustee will give the notice of
redemption in the Issuers' name and at their expense; provided, however, that
the Issuers have delivered to the Trustee, at least 45 days prior to the
redemption date (unless a shorter notice shall be satisfactory to the Trustee),
an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Senior Discount
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price. On or before
the relevant redemption or purchase date, the Issuers will deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption or
purchase price of and accrued interest and Additional Interest, if any, on all
Senior Discount Notes to be redeemed or purchased on that date. The Trustee or
the Paying Agent will promptly return to the Issuers any money deposited with
the Trustee or the Paying Agent by the Issuers in excess of the amounts
necessary to pay the redemption or purchase price of, and accrued interest and
Additional Interest, if any, on, all Senior Discount Notes to be redeemed or
purchased.
If the Issuers comply with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest will cease to
accrue on the Senior Discount Notes or the portions of Senior Discount Notes
called for redemption or purchase. If a Senior Discount Note is redeemed or
purchased on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Senior Discount Note was registered at the close of
business on such record date. If any Senior Discount Note called for redemption
or purchase is not so paid upon surrender for redemption or purchase because of
the failure of the Issuers to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption or purchase date
until such principal is paid, and to the extent lawful on any interest not paid
on such unpaid principal, in each case at the rate provided in the Senior
Discount Notes and in Section 4.01 hereof.
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Section 3.06 Notes Redeemed or Purchased in Part. Upon surrender of
a Senior Discount Note that is redeemed or purchased in part, the Issuers will
issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Issuers a new Senior Discount
Note equal in principal amount at maturity to the unredeemed or unpurchased
portion of the Senior Discount Note surrendered.
Section 3.07 Optional Redemption. (a) At any time prior to
October 1, 2007, the Issuers may on any one or more occasions redeem up to 35%
of the aggregate principal amount at maturity of Senior Discount Notes issued
under this Senior Discount Indenture (including additional notes issued after
Issue Date) at a redemption price of 111.25% of Accreted Value thereof, plus
accrued and unpaid interest and Additional Interest, if any, to, but not
including, the redemption date, in each case, with the net cash proceeds of one
or more Equity Offerings (1) by the Issuers or (2) by any direct or indirect
parent of VHS Holdco I, in each case, to the extent the net cash proceeds
thereof are contributed to the common equity capital of VHS Holdco I or used to
purchase Capital Stock (other than Disqualified Stock) of VHS Holdco I from it;
provided that:
(1) at least 65% of the aggregate principal amount at maturity
of Senior Discount Notes issued under this Senior Discount Indenture
(excluding Senior Discount Notes held by the Issuers and their
Subsidiaries) remains outstanding immediately after the occurrence of such
redemption; and
(2) the redemption occurs within 90 days of the date of the
closing of such Equity Offering.
(b) Except pursuant to the preceding paragraph or as otherwise set
forth below, the Senior Discount Notes will not be redeemable at the Issuers'
option prior to October 1, 2009; provided, however, the Issuers may acquire the
Senior Discount Notes by means other than a redemption, whether by tender offer,
open market purchases, negotiated transactions or otherwise, in accordance with
applicable securities laws, so long as such acquisition does not violate the
terms of this Senior Discount Indenture.
(c) On or after October 1, 2009, the Issuers may redeem all or a
part of the Senior Discount Notes upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount
at maturity) set forth below plus accrued and unpaid interest and Additional
Interest, if any, on the Senior Discount Notes redeemed to the applicable
redemption date, if redeemed during the twelve-month period beginning on October
1 of the years indicated below, subject to the rights of Holders on the relevant
record date to receive interest on the relevant interest payment date:
Year Percentage
---- ----------
2009..................................................................................... 105.625%
2010..................................................................................... 103.750%
2011..................................................................................... 101.875%
2012 and thereafter...................................................................... 100.000%
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Unless the Issuers default in the payment of the redemption price,
interest will cease to accrue on the Senior Discount Notes or portions thereof
called for redemption on the applicable redemption date.
(d) At any time prior to October 1, 2009, the Issuers may also
redeem all or a part of the Senior Discount Notes, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the Accreted Value of
Senior Discount Notes redeemed plus the Applicable Premium as of, and accrued
and unpaid interest and Additional Interest, if any, to, but not including, the
date of redemption (subject to the rights of Holders of Senior Discount Notes on
the relevant record date to receive interest due on the relevant interest
payment date).
(e) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption. The Issuers are not required to
make mandatory redemption or sinking fund payments with respect to the Senior
Discount Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds. In
the event that, pursuant to Section 4.10 hereof, the Issuers are required to
commence an offer to all holders to purchase Senior Discount Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below.
(a) The Asset Sale Offer shall be made to all holders and if the
Issuers elect (or are required by the terms of other pari passu indebtedness),
all holders of other Indebtedness that is pari passu with the Senior Discount
Notes. The Asset Sale Offer shall remain open for a period of at least 20
Business Days following its commencement, and not more than 30 Business Days
except to the extent that a longer period is required by applicable law (the
"Offer Period"). No later than five Business Days after the termination of the
Offer Period (the "Purchase Date"), the Issuers shall apply all Excess Proceeds
(the "Offer Amount") to the purchase of Senior Discount Notes and such other
pari passu Indebtedness, if any, (on a pro rata basis, if applicable) or, if
less than the Offer Amount has been tendered, all Senior Discount Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for any
Senior Discount Notes so purchased shall be made pursuant to Section 4.01
hereof.
(b) If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
and Special Interest, if any, shall be paid to the Person in whose name a Senior
Discount Note is registered at the close of business on such record date, and no
additional interest shall be payable to holders who tender Senior Discount Notes
pursuant to the Asset Sale Offer.
(c) Upon the commencement of an Asset Sale Offer, the Issuers shall
send, by first class mail, a notice to the Trustee and each of the holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such holders to tender Senior Discount Notes pursuant to the
Asset Sale Offer. The notice, which shall govern the terms of the Asset Sale
Offer, shall state:
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(1) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Senior Discount Note not tendered or accepted for
payment shall continue to accrue interest;
(4) that, unless the Issuers default in making such payment,
any Senior Discount Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Purchase Date;
(5) that holders electing to have a Senior Discount Note
purchased pursuant to an Asset Sale Offer may elect to have Senior
Discount Notes purchased in integral multiples of $1,000 principal amount
at maturity only;
(6) that holders electing to have Senior Discount Notes
purchased pursuant to any Asset Sale Offer shall be required to surrender
the Senior Discount Note, with the form entitled "Option of Holder to
Elect Purchase" attached to the Senior Discount Notes completed, or
transfer by book-entry transfer, to the Issuers, a Depositary, if
appointed by the Issuers, or a Paying Agent at the address specified in
the notice at least three days before the Purchase Date;
(7) that holders shall be entitled to withdraw their election
if the Issuers, the Depositary or the Paying Agent, as the case may be,
receives, not later than on the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Senior Discount Note the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Senior Discount Note purchased;
(8) that, if the aggregate principal amount of Senior Discount
Notes and other pari passu Indebtedness surrendered by holders thereof
exceeds the Offer Amount, the Issuers shall select the Senior Discount
Notes and other pari passu Indebtedness to be purchased on a pro rata
basis based on the principal amount of Senior Discount Notes and such
other pari passu Indebtedness surrendered (with such adjustments as may be
deemed appropriate by the Issuers so that only Senior Discount Notes in
denominations of $1,000 principal amount at maturity, or integral
multiples of $1,000 principal amount at maturity, shall be purchased); and
(9) that holders whose Senior Discount Notes were purchased
only in part shall be issued new Senior Discount Notes equal in principal
amount to the unpurchased portion of the Senior Discount Notes surrendered
(or transferred by book-entry transfer).
(d) On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Senior Discount Notes or portions thereof tendered pursuant to
the Asset Sale Offer, or if less than the
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Offer Amount has been tendered, all Senior Discount Notes tendered, and shall
deliver or cause to be delivered to the Trustee the Senior Discount Notes
properly accepted together with an Officer's Certificate stating that such
Senior Discount Notes or portions thereof were accepted for payment by the
Issuers in accordance with the terms of this Section 3.09. The Issuers, the
Depositary or the Paying Agent, as the case may be, shall promptly (but in any
case not later than two days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Senior Discount
Notes tendered by such Holder and accepted by the Issuers for purchase, and the
Issuers, shall promptly issue a new Senior Discount Note, and the Trustee, upon
written request from the Issuers shall authenticate and mail or deliver (or
cause to be transferred by book entry) such new Senior Discount Note to such
Holder, in a principal amount equal to any unpurchased portion of the Senior
Discount Note surrendered. Any Senior Discount Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Notes. The Issuers will pay or cause to be
paid the Accreted Value of, premium, if any, and interest and Additional
Interest, if any, on, the Senior Discount Notes on the dates and in the manner
provided in the Senior Discount Notes. Accreted Value, premium, if any, and
interest and Additional Interest, if any will be considered paid on the date due
if the Paying Agent, if other than the Issuers or a Subsidiary thereof, holds as
of 10:00 a.m. Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
Accreted Value of, premium, if any, and interest and Additional Interest, if
any, then due. The Issuers will pay all Additional Interest, if any, in the same
manner on the dates and in the amounts set forth in the Senior Discount
Registration Rights Agreement.
The Issuers will pay interest on overdue principal at the rate
specified therefor in the Senior Discount Notes, and it shall pay interest on
overdue installments of interest at the same rate borne by the Senior Discount
Notes to the extent lawful.
Section 4.02 Maintenance of Office or Agency. The Issuers will
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Senior Discount Notes may be surrendered for registration
of transfer or for exchange and where notices and demands to or upon the Issuers
in respect of the Senior Discount Notes and this Senior Discount Indenture may
be served. The Issuers will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Issuers fail to maintain any such required office or agency or fails to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
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The Issuers may also from time to time designate one or more other
offices or agencies where the Senior Discount Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission will in
any manner relieve the Issuers of their obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for such purposes. The
Issuers will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Issuers hereby designate the Corporate Trust Office of the
Trustee as one such office or agency of the Issuers in accordance with Section
2.03 hereof.
Section 4.03 Reports to Holders(a) . (a) Whether or not required by
the SEC, so long as any Senior Discount Notes are outstanding, VHS Holdco I will
furnish to the Holders of Senior Discount Notes, within 45 days after the end of
each of the first three fiscal quarters of each fiscal year commencing with the
fiscal quarter ended September 30, 2004 or (in the case of annual financial
information) within 90 days after the end of each fiscal year, all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if VHS Holdco I were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations"; and with respect to the annual information only, a
report on the annual financial statements by VHS Holdco I's certified
independent accountants. In addition, whether or not required by the SEC, VHS
Holdco I will file a copy of all of the information and reports referred to
above (unless the SEC will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request.
(b) So long as any Senior Discount Notes remain outstanding, VHS
Holdco I will furnish to the Holders of the Senior Discount Notes and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(c) For so long as Vanguard is a guarantor of the Issuers'
obligations pursuant to the Senior Discount Notes (there being no obligation of
Vanguard to do so), holds no material assets other than cash, Cash Equivalents
and the Capital Stock of VHS Holdco I or the Discount Notes Co-Issuer (and
performs the related incidental activities associated with such ownership) and
complies with the requirements of Rule 3-10 of Regulation S-X promulgated by the
SEC (or any successor provision), the reports, information and other documents
required to be filed and furnished to holders of the Senior Discount Notes
pursuant to this covenant may, at the option of VHS Holdco I, be filed by and be
those of Vanguard rather than VHS Holdco I.
(d) Notwithstanding the foregoing, such requirements shall be deemed
satisfied prior to the commencement of the Senior Discount Registered Exchange
Offer or the effectiveness of the Shelf Registration Statement by the filing
with the SEC of the Exchange Offer Registration Statement and/or Shelf
Registration Statement, and any amendments thereto, with such financial
information that satisfies Regulation S-X of the Securities Act.
Section 4.04 Compliance Certificate(a) . (a) The Issuers shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Issuers an Officers' Certificate
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stating that in the course of the performance by the signers of their duties as
Officers of the Issuers they would normally have knowledge of any Default and
whether or not the signers know of any Default that occurred during such period.
If they do, the certificate shall describe the Default, its status and what
action the Issuers are taking or proposes to take with respect thereto. The
Issuers also shall comply with Section 314(a)(4) of the TIA.
(b) So long as any of the Senior Discount Notes are outstanding, the
Issuers will deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Issuers are taking or propose to
take with respect thereto.
Section 4.05 Intentionally Omitted.
Section 4.06 Intentionally Omitted.
Section 4.07 Restricted Payments(a) . (a) VHS Holdco I will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of VHS Holdco I's or any of its Restricted
Subsidiaries' Equity Interests, including, any dividend or distribution
payable in connection with any merger or consolidation (other than (A)
dividends or distributions by VHS Holdco I payable in Equity Interests
(other than Disqualified Stock) of VHS Holdco I or in options, warrants or
other rights to purchase such Equity Interests (other than Disqualified
Stock) or (B) dividends or distributions by a Restricted Subsidiary to VHS
Holdco I or any other Restricted Subsidiary so long as, in the case of any
dividend or distribution payable on or in respect of any class or series
of securities issued by a Restricted Subsidiary other than a Wholly-Owned
Subsidiary, VHS Holdco I or a Restricted Subsidiary receives at least its
pro rata share of such dividend or distribution in accordance with its
Equity Interests in such class or series of securities);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving either of the Issuers or any direct or indirect
parent entity of either of the Issuers) any Equity Interests of either of
the Issuers or any such parent entity;
(3) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, in each case prior to
any scheduled repayment, sinking fund payment or maturity, any
Subordinated Indebtedness of VHS Holdco I (other than (A) Indebtedness
permitted under clauses (8) and (9) of the definition of "Permitted Debt"
or (B) the purchase, repurchase or other acquisition of Subordinated
Indebtedness, as the case may be, purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of purchase, repurchase or
acquisition); or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) being
collectively referred to as
65
"Restricted Payments"), unless, at the time of and after giving effect to
such Restricted Payment:
(A) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted
Payment;
(B) VHS Holdco I would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09(a) hereto; and
(C) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by VHS Holdco I and the
Restricted Subsidiaries after the Issue Date (excluding Restricted
Payments permitted by clauses (2), (3), (4), (6), (8), (9), (10),
(11), (12), (14), (15), (17) and (19) of Section 4.07(b)), is less
than the sum, without duplication, of
(i) 50% of the Consolidated Net Income of VHS
Holdco I for the period (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the
Issue Date, to the end of VHS Holdco I's most recently ended
fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, in the
case such Consolidated Net Income for such period is a
deficit, minus 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds and
the fair market value, as determined in good faith by the
Board of Directors of VHS Holdco I, of property and marketable
securities received by the Issuers since immediately after the
Issue Date from the issue or sale of (x) Equity Interests of
VHS Holdco I (including Retired Capital Stock (as defined
below)) (other than (a) Excluded Contributions, (b) Designated
Preferred Stock and (c) cash proceeds and marketable
securities received from the sale of Equity Interests to
members of management, directors or consultants of VHS Holdco
I, any direct or indirect parent entities of VHS Holdco I and
its Subsidiaries following the Issue Date to the extent such
amounts have been applied to Restricted Payments made in
accordance with clause (4) of the next succeeding paragraph)
and, to the extent actually contributed to VHS Holdco I,
Equity Interests of any direct or indirect parent entities of
VHS Holdco I and (y) debt securities of VHS Holdco I that have
been converted into such Equity Interests of VHS Holdco I
(other than Refunding Capital Stock (as defined below) or
Equity Interests or convertible debt securities of VHS Holdco
I sold to a Restricted Subsidiary or VHS Holdco I, as the case
may be, and other than Disqualified Stock or debt securities
that have been converted into Disqualified Stock), plus
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(iii) 100% of the aggregate amount of cash and the
fair market value, as determined in good faith by the Board of
Directors of VHS Holdco I, of property and marketable
securities contributed to the capital of VHS Holdco I
following the Issue Date (other than (x) Excluded
Contributions, (y) the Cash Contribution Amount and (z)
contributions by a Restricted Subsidiary), plus
(iv) 100% of the aggregate amount received in cash
and the fair market value, as determined in good faith by the
Board of Directors of VHS Holdco I, of property and marketable
securities received after the Issue Date by means of (x) the
sale or other disposition (other than to VHS Holdco I or a
Restricted Subsidiary) of Restricted Investments made by VHS
Holdco I or its Restricted Subsidiaries and repurchases and
redemptions of such Restricted Investments from VHS Holdco I
or its Restricted Subsidiaries and repayments of loans or
advances which constitute Restricted Investments by VHS Holdco
I or its Restricted Subsidiaries or (y) the sale (other than
to VHS Holdco I or a Restricted Subsidiary) of the Capital
Stock of an Unrestricted Subsidiary or a distribution from an
Unrestricted Subsidiary (other than in each case to the extent
the Investment in such Unrestricted Subsidiary was made by a
Restricted Subsidiary pursuant to clause (5) or (14) of the
next succeeding paragraph or to the extent such Investment
constituted a Permitted Investment) or a dividend from an
Unrestricted Subsidiary, plus
(v) in the case of the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary or the
merger or consolidation of an Unrestricted Subsidiary into VHS
Holdco I or a Restricted Subsidiary or the transfer of assets
of an Unrestricted Subsidiary to VHS Holdco I or a Restricted
Subsidiary, the fair market value of the Investment in such
Unrestricted Subsidiary, as determined by the Board of
Directors of VHS Holdco I in good faith at the time of the
redesignation of such Unrestricted Subsidiary as a Restricted
Subsidiary or at the time of such merger, consolidation or
transfer of assets (other than an Unrestricted Subsidiary to
the extent the Investment in such Unrestricted Subsidiary was
made by a Restricted Subsidiary pursuant to clause (5) or (14)
of the next succeeding paragraph or to the extent such
Investment constituted a Permitted Investment).
(b) The provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or other distribution or the
consummation of any irrevocable redemption within 60 days after the date
of declaration of the dividend or distribution or giving of the
irrevocable redemption notice, as the case may be, if, at the date of
declaration or notice, such dividend, distribution or redemption payment,
as the case may be, would have complied with the provisions of this Senior
Discount Indenture;
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(2) (A) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Issuers or any direct or
indirect parent corporation of the Issuers ("Retired Capital Stock") or
Subordinated Indebtedness, as the case may be, in exchange for or out of
the proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary or the Issuers) of Equity Interests of the Issuers
or any direct or indirect parent of the Issuers or contributions to the
equity capital of the Issuers (in each case, other than Disqualified
Stock) ("Refunding Capital Stock") and (B) the declaration and payment of
accrued dividends on the Retired Capital Stock out of the proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary or
the Issuers) of Refunding Capital Stock;
(3) the redemption, repurchase or other acquisition or
retirement for value of Subordinated Indebtedness of VHS Holdco I made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, new Indebtedness of VHS Holdco I, which is incurred in compliance with
Section 4.09 hereof so long as (A) the principal amount of such new
Indebtedness does not exceed the principal amount of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired for value
plus the amount of any reasonable premium required to be paid under the
terms of the instrument governing the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value, (B) such new
Indebtedness is subordinated to the Senior Discount Notes at least to the
same extent as such Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired for value, (C) such new Indebtedness has
a final scheduled maturity date equal to or later than the final scheduled
maturity date of the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired for value and (D) such new Indebtedness
has a Weighted Average Life to Maturity equal to or greater than the
remaining Weighted Average Life to Maturity of the Subordinated
Indebtedness being so redeemed, repurchased, acquired or retired for
value;
(4) a Restricted Payment to pay for the repurchase, retirement
or other acquisition or retirement for value of common Equity Interests of
the Issuers or any of their direct or indirect parent entities held by any
future, present or former employee, director or consultant of VHS Holdco
I, any of its Subsidiaries or (to the extent such person renders services
to the businesses of VHS Holdco I and its Subsidiaries) VHS Holdco I's
direct or indirect parent entities, pursuant to any management equity plan
or stock option plan or any other management or employee benefit plan or
agreement or arrangement; provided that the aggregate amount of all such
Restricted Payments made under this clause (4) does not exceed in any
calendar year $5.0 million (with unused amounts in any calendar year being
carried over to the next two succeeding calendar years); and provided,
further, that such amount in any calendar year may be increased by an
amount not to exceed (A) the cash proceeds from the sale of Equity
Interests of VHS Holdco I and, to the extent contributed to VHS Holdco I,
Equity Interests of any of its direct or indirect parent entities, in each
case to members of management, directors or consultants of VHS Holdco I,
any of its Subsidiaries or (to the extent such person renders services to
the businesses of VHS Holdco I and its Subsidiaries) VHS Holdco I's direct
or indirect parent entities, that occurs after the Issue Date plus (B) the
cash proceeds of key man life insurance policies received by VHS Holdco I
or its Restricted Subsidiaries, or by any direct or indirect parent entity
to the extent contributed to VHS Holdco I, after
68
the Issue Date (provided that VHS Holdco I may elect to apply all or any
portion of the aggregate increase contemplated by clauses (A) and (B)
above in any calendar year) less (C) the amount of any Restricted Payments
previously made pursuant to clauses (A) and (B) of this clause (4);
(5) Investments in Unrestricted Subsidiaries having an
aggregate fair market value, taken together with all other Investments
made pursuant to this clause (5) that are at the time outstanding, without
giving effect to the sale of an Unrestricted Subsidiary to the extent the
proceeds of such sale do not consist of cash and/or marketable securities,
not to exceed $25.0 million at the time of such Investment (with the fair
market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value);
(6) repurchases of Equity Interests deemed to occur upon
exercise of stock options or warrants if such Equity Interests represent a
portion of the exercise price of such options or warrants;
(7) the payment of dividends on the common equity interests of
the Issuers (or the payment of dividends to any direct or indirect parent
of the Issuers to fund a payment of dividends on such entity's common
stock) following the first public offering of the common stock of the
Issuers, or the common equity interests of any of their direct or indirect
parent entities after the Issue Date, of up to 6.0% per annum or the net
proceeds received by or contributed to the Issuers in any public offering,
other than public offerings with respect to common equity interests
registered on Form S-8 (or any successor form that provides for
registration of securities offered to employees of the registrant) and
other than any public sale constituting an Excluded Contribution;
(8) Investments that are made with Excluded Contributions;
(9) the declaration and payment of dividends to, or the making
of loans to, VHS Holdings LLC, a Delaware limited liability company, or
Vanguard in amounts required for VHS Holdings LLC, or Vanguard to pay:
(A) (i) overhead (including salaries and other
compensation expenses) and franchise or similar tax liabilities,
legal, accounting and other professional fees and expenses in
connection with, and to the extent attributable, to the maintenance
of VHS Holdings LLC's, or Vanguard's existence and its ownership of
VHS Holdco I, Vanguard, or any of their Subsidiaries, as applicable,
(ii) fees and expenses related to any equity offering, investment or
acquisition permitted hereunder (whether or not successful) and
(iii) other fees and expenses in connection with, and to the extent
attributable to, the maintenance of VHS Holdings LLC's, Vanguard's
existence and its ownership of VHS Holdco I, Vanguard, or any of
their Subsidiaries, as applicable; and
(B) with respect to each tax year (or portion thereof),
federal, state or local income taxes (as the case may be) imposed
directly on or allocated to VHS Holdings LLC, or Vanguard or which
are due and payable by VHS
69
Holdings LLC, or Vanguard as part of a consolidated group, to the
extent such income taxes are attributable to the income of the
Issuers or any of their Subsidiaries;
(10) Distributions or payments of Securitization Fees;
(11) cash dividends or other distributions on Capital Stock of
VHS Holdco I or any of its Restricted Subsidiaries used to, or the making
of loans, the proceeds of which will be used to, fund the payment of fees
and expenses incurred in connection with the Transactions, this offering
or owed to Affiliates, in each case to the extent permitted by Section
4.11 hereof;
(12) declaration and payment of dividends to holders of any
class or series of Disqualified Stock of VHS Holdco I or any Restricted
Subsidiary issued in accordance with Section 4.09 hereof to the extent
such dividends are included in the definition of Fixed Charges;
(13) other Restricted Payments in an aggregate amount not to
exceed $50.0 million;
(14) the declaration and payment of dividends or distributions
to holders of any class or series of Designated Preferred Stock issued
after the Issue Date and the declaration and payment of dividends to any
direct or indirect parent company of VHS Holdco I, the proceeds of which
will be used to fund the payment of dividends to holders of any class or
series of Designated Preferred Stock of any direct or indirect parent
company of VHS Holdco I issued after the Issue Date; provided that (A) for
the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of
issuance of such Designated Preferred Stock, after giving effect to such
issuance on the first day of such period (and the payment of dividends or
distributions) on a pro forma basis, VHS Holdco I would have had a Fixed
Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate
amount of dividends declared and paid pursuant to this clause (14) does
not exceed the net cash proceeds actually received by the Issuers from any
such sale of Designated Preferred Stock issued after the Issue Date;
(15) the distribution, as a dividend or otherwise, of shares
of Capital Stock of, or Indebtedness owed to VHS Holdco I or a Restricted
Subsidiary by, Unrestricted Subsidiaries;
(16) the repurchase, redemption or other acquisition or
retirement for value of any Subordinated Indebtedness pursuant to the
provisions similar to those described in Section 4.10 and Section 4.14
hereof; provided that all Senior Discount Notes tendered by holders of the
Senior Discount Notes in connection with the related Change of Control
Offer or Asset Sale Offer, as applicable, have been repurchased, redeemed
or acquired for value;
(17) payments to Vanguard to enable Vanguard to (A) purchase
Existing Vanguard Senior Subordinated Notes validly tendered, and not
validly
70
withdrawn, in the Offer in accordance with the terms thereof or (B) pay
when due accrued but unpaid interest on the Existing Vanguard Senior
Subordinated Notes (after giving effect to the consummation of the Offer);
provided that such amounts are used by Vanguard to purchase such Existing
Vanguard Senior Subordinated Notes or pay such interest, as the case may
be, in accordance with this clause (17) promptly after receipt of such
payment;
(18) payments or distributions to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of all or substantially all of the
assets of VHS Holdco I or any direct or indirect parent entity of VHS
Holdco I that complies with the provisions of the Senior Discount
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the property and assets of VHS Holdco I; provided
that, as a result of such consolidation, merger or transfer of assets, the
Issuers have made a Change of Control Offer pursuant to Section 4.14
hereof and any Senior Discount Notes tendered in connection therewith have
been purchased; and
(19) cash payments in lieu of fractional shares issuable as
dividends on preferred stock or upon the conversion of any convertible
debt securities of either Issuer or any of their Restricted Subsidiaries;
provided that the Board of Directors of VHS Holdco I shall have determined
in good faith that such payments are not made for the purpose of evading
the limitations of this Section 4.07;
provided that at the time of, and after giving effect to, any Restricted Payment
permitted under clauses 4.07(b) (2) (with respect to the payment of dividends on
Refunding Capital Stock pursuant to clause (B) thereof), (5), (7), (10), (12),
(13), (14), (15), (16), and (19) above, no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof.
(c) The amount of all Restricted Payments (other than cash) will be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by VHS Holdco I or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.07 will be determined in good faith by the Board of Directors of VHS
Holdco I.
(d) VHS Holdco I will not permit any Unrestricted Subsidiary to
become a Restricted Subsidiary except pursuant to the second to last sentence of
the definition of Unrestricted Subsidiary. For purposes of designating any
Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding investments
by VHS Holdco I and the Restricted Subsidiaries (except to the extent repaid) in
the Subsidiary so designated will be deemed to be Restricted Payments in an
amount determined as set forth in the second paragraph of the definition of
Investments. Such designation will be permitted only if a Restricted Payment in
such amount would be permitted at such time under this covenant or the
definition of Permitted Investments and if such Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
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Section 4.08 Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries(a) . (a) VHS Holdco I will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to VHS Holdco I or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any Indebtedness owed to VHS Holdco I or any of its
Restricted Subsidiaries;
(2) make loans or advances to VHS Holdco I or any of its
Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to
VHS Holdco I or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof will not apply to
encumbrances or restrictions existing under or by reason of:
(1) contractual encumbrances or restrictions in effect on the
Issue Date, including, without limitation, pursuant to Existing
Indebtedness or the Credit Agreement and related documentation and the
Senior Subordinated Indenture;
(2) the Senior Discount Indenture and the Existing Vanguard
Senior Subordinated Notes after giving effect to the consummation of the
Offer;
(3) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in clause (3) of Section 4.08(a) hereof;
(4) applicable law or any applicable rule, regulation or
order;
(5) any agreement or other instrument of a Person acquired by
VHS Holdco I or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which encumbrance
or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of
the Person, so acquired;
(6) contracts for the sale of assets, including, without
limitation, customary restrictions with respect to a Subsidiary pursuant
to an agreement that has been entered into for the sale or disposition of
all or substantially all of the Capital Stock or assets of such
Subsidiary;
(7) secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 4.09 and 4.12 hereof that limits the right of the
debtor to dispose of the assets securing such Indebtedness;
72
(8) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary course
of business;
(9) other Indebtedness of Restricted Subsidiaries which
Indebtedness is permitted to be incurred pursuant to an agreement entered
into subsequent to the Issue Date in accordance with Section 4.09 hereof;
(10) customary provisions in joint venture agreements and
other similar agreements entered into in the ordinary course of business,
including, without limitation, provisions limiting the disposition or
distribution of assets or property; provided that such limitations are
applicable only to the assets or property that are the subject of such
joint venture agreements and are owned by such joint venture;
(11) customary provisions restricting dispositions of real
property interests set forth in any reciprocal easement agreements of VHS
Holdco I or any Restricted Subsidiary;
(12) customary provisions contained in licenses of
intellectual property and other similar agreements entered into in the
ordinary course of business;
(13) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest;
(14) customary provisions restricting assignment of any
agreement entered into in the ordinary course of business;
(15) contracts entered into in the ordinary course of
business, not related to any Indebtedness, and that do not, individually
or in the aggregate, detract from the value of property or assets of VHS
Holdco I or any Restricted Subsidiary in any manner material to VHS Holdco
I or any Restricted Subsidiary;
(16) any encumbrances or restrictions of the type referred to
in Sections 4.08(a) (1), (2) and (3) imposed by any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or obligations
referred to in Sections 4.08(b) (1), (2) and (5); provided that such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are, in the good faith judgment
of the Board of Directors of VHS Holdco I, not materially more restrictive
with respect to such dividend and other payment restrictions than those
contained in the dividend or other payment restrictions prior to such
amendment, modification, restatement, renewal, increase, supplement,
refunding, replacement or refinancing; or
(17) any encumbrance or restriction of a Securitization
Subsidiary effected in connection with a Qualified Securitization
Financing; provided that such restrictions apply only to such
Securitization Subsidiary.
Section 4.09 Incurrence of Additional Indebtedness and Issuance of
Preferred Stock(a) . (a) VHS Holdco I will not, and will not permit any of its
Restricted Subsidiaries to,
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directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt), and VHS
Holdco I will not permit any of its Restricted Subsidiaries to issue any shares
of Preferred Stock; provided, that VHS Holdco I and any Restricted Subsidiary
may incur Indebtedness (including Acquired Debt), and any Restricted Subsidiary
may issue Preferred Stock if the Fixed Charge Coverage Ratio for VHS Holdco I's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Preferred Stock is issued would have been at
least 2.00 to 1.00, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the preferred equity had been issued, as the case may be,
and the application of proceeds therefrom had occurred at the beginning of such
four-quarter period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the
incurrence of any of the following (collectively, "Permitted Debt"):
(1) Indebtedness under the Credit Agreement together with the
incurrence of the guarantees thereunder and the issuance and creation of
letters of credit and bankers' acceptances thereunder (with letters of
credit and bankers' acceptances being deemed to have a principal amount
equal to the face amount thereof), up to an aggregate principal amount of
$1,025.0 million outstanding at any one time plus the amount available on
the Issue Date under the Delayed Draw Term Loan Portions of the Credit
Agreement, less the amount of all permanent reductions of Indebtedness
thereunder as a result of principal payments actually made with Net
Proceeds from Asset Sales; provided, however, that such amount shall be
reduced to the extent of any amount available on the Issue Date and not
subsequently drawn within the time periods provided therefor under the
Delayed Draw Term Loan Portions of the Credit Agreement;
(2) Indebtedness represented by the Existing Vanguard
Subordinated Notes after giving effect to the consummation of the Offer
(including any guarantee thereof existing on the Issue Date);
(3) Indebtedness represented by the Senior Subordinated Notes
and the guarantees thereof and the Senior Subordinated Notes and
guarantees thereof to be issued in exchange therefor, and Indebtedness
represented by the Senior Discount Notes and the Senior Discount Notes to
be issued in exchange therefor, in each case such exchange being made
pursuant to the Registration Rights Agreements;
(4) Existing Indebtedness (other than Indebtedness described
in Sections 4.09(b) (1), (2) and (3));
(5) Indebtedness (including Capitalized Lease Obligations)
incurred or issued by VHS Holdco I or any Restricted Subsidiary to finance
the purchase, lease or improvement of property (real or personal) or
equipment that is used by or useful to VHS Holdco I or any Restricted
Subsidiary in a Permitted Business (whether through the direct purchase of
assets or the Capital Stock of any Person owning such assets) in an
aggregate principal amount that, when aggregated with the principal amount
of all other
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Indebtedness then outstanding and incurred pursuant to this clause (5) of
Section 4.09(b), does not exceed the greater of $60.0 million and 3.0% of
Total Assets;
(6) Indebtedness incurred by VHS Holdco I or any Restricted
Subsidiary constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims,
health, disability or other employee benefits or property, casualty or
liability insurance or self-insurance or other Indebtedness with respect
to reimbursement-type obligations regarding workers' compensation claims;
(7) Indebtedness arising from agreements of VHS Holdco I or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or assumed
in connection with the disposition of any business, assets or a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or a Subsidiary for
the purpose of financing such acquisition; provided that (A) such
Indebtedness is not reflected on the balance sheet (other than by
application of FIN 45 as a result of an amendment to an obligation in
existence on the Issue Date) of VHS Holdco I or any Restricted Subsidiary
(contingent obligations referred to in a footnote to financial statements
and not otherwise reflected on the balance sheet will not be deemed to be
reflected on such balance sheet for purposes of this clause (A) of Section
4.09(b)(7)) and (B) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds including non-cash
proceeds (the fair market value of such non-cash proceeds being measured
at the time received and without giving effect to any subsequent changes
in value) actually received by VHS Holdco I and any Restricted
Subsidiaries in connection with such disposition;
(8) Indebtedness of VHS Holdco I owed to and held by any
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to
and held by VHS Holdco I or any Restricted Subsidiary; provided that (A)
any subsequent issuance or transfer of any Capital Stock or any other
event that results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of any such Indebtedness
(except to VHS Holdco I or a Restricted Subsidiary) shall be deemed, in
each case, to constitute the incurrence of such Indebtedness by the issuer
thereof and (B) if either of the Issuers is the obligor on such
Indebtedness owing to a Restricted Subsidiary, other than Indebtedness
represented by short-term, open account working capital notes entered into
in the ordinary course of business for cash management purposes and
consistent with past practice, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all obligations of such Issuer
with respect to the Senior Discount Notes;
(9) shares of Preferred Stock of a Restricted Subsidiary
issued to VHS Holdco I or a Restricted Subsidiary; provided that any
subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any other subsequent transfer of any such shares of
Preferred Stock (except to VHS Holdco I or a Restricted Subsidiary) shall
be deemed in each case to be an issuance of such shares of Preferred
Stock;
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(10) Hedging Obligations of VHS Holdco I or any Restricted
Subsidiary (excluding Hedging Obligations entered into for speculative
purposes) for the purpose of limiting (A) interest rate risk with respect
to any Indebtedness that is permitted by the terms of this Senior Discount
Indenture to be outstanding or (B) exchange rate risk with respect to any
currency exchange or (C) commodity risk;
(11) obligations in respect of performance, bid, appeal and
surety bonds and performance and completion guarantees provided by VHS
Holdco I or any Restricted Subsidiary or obligations in respect of letters
of credit related thereto, in each case in the ordinary course of business
or consistent with past practice;
(12) Preferred Stock that is not Disqualified Stock and is
issued by a Restricted Subsidiary of VHS Holdco I to a Person holding a
minority Equity Interest in such Restricted Subsidiary (after giving
effect to such issuance); provided that such Preferred Stock is not
exchangeable or convertible into Indebtedness of VHS Holdco I or any of
its Restricted Subsidiaries and does not require any cash payment of
dividends or distributions at any time that such cash payment would result
in a Default or an Event of Default; provided, further, that the aggregate
liquidation preference of all Preferred Stock issued pursuant to this
clause (12) of Section 4.09(b) shall not exceed $10.0 million;
(13) Indebtedness of VHS Holdco I or any Restricted Subsidiary
or Preferred Stock of any Restricted Subsidiary not otherwise permitted
hereunder in an aggregate principal amount or liquidation preference
which, when aggregated with the principal amount and liquidation
preference of all other Indebtedness and Preferred Stock then outstanding
and incurred pursuant to this clause (13) of Section 4.09(b), does not at
any one time outstanding exceed $75.0 million (it being understood that
(x) any Indebtedness pursuant to this clause (13) of Section 4.09(b) may,
but need not, be incurred in whole or in part under the Credit Agreement
and (y) any Indebtedness or Preferred Stock incurred pursuant to this
clause (13) of Section 4.09(b) shall cease to be deemed incurred or
outstanding for purposes of this clause (13) of Section 4.09(b) but shall
be deemed incurred for the purposes of the first paragraph of this
covenant from and after the first date on which VHS Holdco I or such
Restricted Subsidiary could have incurred such Indebtedness or Preferred
Stock under the first paragraph of this covenant without reliance on this
clause (13) of Section 4.09(b));
(14) any guarantee by either of the Issuers or a Restricted
Subsidiary of Indebtedness or other obligations of VHS Holdco I or any
Restricted Subsidiary so long as the incurrence of such Indebtedness by
VHS Holdco I or such Restricted Subsidiary is permitted under the terms of
this Senior Discount Indenture; provided that if such Indebtedness is by
its express terms subordinated in right of payment to the Senior Discount
Notes any such guarantee with respect to such Indebtedness shall be
subordinated in right of payment to the Senior Discount Notes
substantially to the same extent as such Indebtedness is subordinated to
the Senior Discount Notes;
(15) the incurrence by VHS Holdco I or any Restricted
Subsidiary of Indebtedness or Preferred Stock that serves to refund or
refinance any Indebtedness incurred as permitted under Section 4.09(a)
hereof and clauses (2), (3) and (4) of Section
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4.09(b) hereof, this clause (15) and clause (16) of Section 4.09(b) hereof
or any Indebtedness issued to so refund or refinance such Indebtedness
including additional Indebtedness incurred to pay premiums and fees in
connection therewith (the "Refinancing Indebtedness") prior to its
respective maturity; provided that such Refinancing Indebtedness (A) has a
Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred which is not less than the remaining Weighted
Average Life to Maturity of the Indebtedness being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances Indebtedness
subordinated or pari passu to the Senior Discount Notes, such Refinancing
Indebtedness is subordinated or pari passu to the Senior Discount Notes at
least to the same extent as the Indebtedness being refinanced or refunded,
(C) shall not include (x) Indebtedness or Preferred Stock of a Restricted
Subsidiary that is not the Discount Notes Co-Issuer that refinances
Indebtedness or Preferred Stock of either Issuer or (y) Indebtedness or
Preferred Stock of VHS Holdco I or a Restricted Subsidiary that refinances
Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (D) shall
not be in a principal amount in excess of the principal amount of,
premium, if any, accrued interest on, and related fees and expenses of,
the Indebtedness being refunded or refinanced and (E) shall not have a
stated maturity date prior to the Stated Maturity of the Indebtedness
being refunded or refinanced; and provided, further, that subclauses (A),
(B) and (E) of this clause (15) of Section 4.09(b) will not apply to any
refunding or refinancing of any Senior Debt;
(16) Indebtedness or Preferred Stock of Persons that are
acquired by VHS Holdco I or any Restricted Subsidiary or merged into VHS
Holdco I or a Restricted Subsidiary in accordance with the terms of this
Senior Discount Indenture; provided that such Indebtedness or Preferred
Stock is not incurred in connection with or in contemplation of such
acquisition or merger; and provided, further, that after giving effect to
such acquisition or merger, either (A) VHS Holdco I or such Restricted
Subsidiary would be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of this covenant or (B) the Fixed Charge Coverage
Ratio would be greater than immediately prior to such acquisition;
(17) Indebtedness arising from the honoring by a bank or
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided
that such Indebtedness, other than credit or purchase cards, is
extinguished within five business days of its incurrence;
(18) Indebtedness of VHS Holdco I or any Restricted Subsidiary
supported by a letter of credit issued pursuant to the Credit Agreement in
a principal amount not in excess of the stated amount of such letter of
credit;
(19) Contribution Indebtedness;
(20) Indebtedness consisting of the financing of insurance
premiums;
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(21) Indebtedness incurred on behalf of or representing
guarantees of Indebtedness of joint ventures of VHS Holdco I or any
Restricted Subsidiary not in excess of $25.0 million at any time
outstanding;
(22) Indebtedness incurred by a Securitization Subsidiary in a
Qualified Securitization Financing that is not recourse to VHS Holdco I or
any Restricted Subsidiary other than a Securitization Subsidiary (except
for Standard Securitization Undertakings);
(23) Physician Support Obligations incurred by VHS Holdco I or
any Restricted Subsidiary; and
(24) all premium (if any), interest (including post-petition
interest), fees, expenses, charges and additional or contingent interest
on obligations described in clauses (1) through (23) of Section 4.09(b)
hereof.
For purposes of determining compliance with this Section 4.09, in the event that
an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (24) of Section
4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a)
hereof, VHS Holdco I will be permitted to classify and later reclassify such
item of Indebtedness in any manner that complies with this covenant, and such
item of Indebtedness will be treated as having been incurred pursuant to only
one of such categories. Accrual of interest, the accretion of accreted value and
the payment of interest in the form of additional Indebtedness will not be
deemed to be an incurrence of Indebtedness for purposes of this Section 4.09.
Indebtedness under the Credit Agreement outstanding on the date on which Senior
Discount Notes are first issued and authenticated under the Senior Discount
Indenture will be deemed to have been incurred on such date in reliance on the
exception provided by clause (1) of the definition of Permitted Debt. The
maximum amount of Indebtedness that VHS Holdco I and its Restricted Subsidiaries
may incur pursuant to this Section 4.09 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness, solely as a result of fluctuations in
the exchange rate of currencies.
Section 4.10 Asset Sales. (a) VHS Holdco I will not, and will
not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless:
(1) VHS Holdco I (or such Restricted Subsidiary, as the case
may be) receives consideration at the time of the Asset Sale at least
equal to the fair market value (as determined in good faith by the
principal officer of VHS Holdco I or, in the case of assets and Equity
Interests having a value in excess of $10.0 million, by the Board of
Directors of VHS Holdco I) of the assets or Equity Interests issued or
sold or otherwise disposed of; and
(2) at least 75% of the consideration received in the Asset
Sale by VHS Holdco I or such Restricted Subsidiary is in the form of cash
or Cash Equivalents. For the purposes of this provision and for no other
purpose, each of the following shall be deemed to be cash:
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The amount of (A) any liabilities (as shown on VHS Holdco I's or
such Restricted Subsidiary's most recent balance sheet or in the notes thereto)
of VHS Holdco I or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Senior Discount Notes) that are assumed by the
transferee of any such assets and for which VHS Holdco I and all Restricted
Subsidiaries have been validly released by all creditors in writing;
(B) any securities received by VHS Holdco I or such Restricted
Subsidiary from such transferee that are converted by VHS Holdco I or such
Restricted Subsidiary into cash (to the extent of the cash received) within 180
days following the receipt thereof; and
(C) any Designated Non-cash Consideration received by VHS Holdco I
or any of its Restricted Subsidiaries in such Asset Sale having an aggregate
fair market value (as determined in good faith by VHS Holdco I), taken together
with all other Designated Non-cash Consideration received pursuant to this
clause (C) that is at that time outstanding, not to exceed the greater of (i)
$25.0 million and (ii) 1.0% of Total Assets at the time of the receipt of such
Designated Non-cash Consideration (with the fair market value of each item of
Designated Non-cash Consideration being measured at the time received without
giving effect to subsequent changes in value).
Notwithstanding the foregoing, the 75% limitation referred to in
this clause (2) of Section 4.10(a) shall not apply to any Asset Sale in which
the amount of consideration of the type referred to this clause (2) of Section
4.10(a) received therefrom, determined in accordance with the foregoing
provision, is equal to or greater than what the after-tax proceeds would have
been had such Asset Sale complied with aforementioned 75% limitation.
(b) Within 365 days after the receipt of any Net Proceeds by VHS
Holdco I or any Restricted Subsidiary from an Asset Sale, VHS Holdco I or such
Restricted Subsidiary may apply those Net Proceeds at its option to:
(1) permanently reduce Obligations of the Issuers under the
Credit Agreement (and, in the case of revolving Obligations under the
Credit Agreement, to correspondingly reduce commitments with respect
thereto) or other Indebtedness of the Issuers that ranks pari passu with
the Senior Discount Notes (provided that if the Issuers shall so reduce
Obligations under such pari passu Indebtedness, it will equally and
ratably reduce Obligations under the Senior Discount Notes by making an
offer (in accordance with the procedures set forth in Section 3.09) to all
Holders of Senior Discount Notes to purchase at a purchase price equal to
100% of the Accreted Value thereof, plus accrued and unpaid interest and
Additional Interest, if any, the pro rata Accreted Value of Senior
Discount Notes) or Indebtedness of a Restricted Subsidiary, in each case
other than Indebtedness owed to either of the Issuers or an Affiliate of
the Issuers (provided that in the case of any reduction of any revolving
obligations, the Issuers or such Restricted Subsidiary shall effect a
corresponding reduction of commitments with respect thereto);
(2) make an investment in (A) any one or more businesses;
provided that such investment in any business is in the form of the
acquisition of Capital Stock and results in VHS Holdco I or a Restricted
Subsidiary owning an amount of the Capital
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Stock of such business such that it constitutes a Restricted Subsidiary,
(B) capital expenditures or (C) other assets, in each of (A), (B) and (C),
used or useful in a Permitted Business; and/or
(3) make an investment in (A) any one or more businesses;
provided that such investment in any business is in the form of the
acquisition of Capital Stock and it results in VHS Holdco I or a
Restricted Subsidiary owning an amount of the Capital Stock of such
business such that it constitutes a Restricted Subsidiary, (B) properties
or (C) assets that, in each of (A), (B) and (C), replace the businesses,
properties and assets that are the subject of such Asset Sale;
provided that the 365-day period provided above to apply any portion of Net
Proceeds in accordance with clause (2) or (3) of this Section 4.10(b) shall be
extended by an additional 180 days if by not later than the 365th day after
receipt of such Net Proceeds, VHS Holdco I or a Restricted Subsidiary, as
applicable, has entered into a bona fide binding commitment with a Person other
than an Affiliate of the Issuers to make an investment of the type referred to
in either such clause in the amount of such Net Proceeds.
(c) When the aggregate amount of Net Proceeds not applied or
invested in accordance with the preceding paragraph ("Excess Proceeds") exceeds
$20.0 million, the Issuers will make an Asset Sale Offer to all holders of
Senior Discount Notes to purchase on a pro rata basis the maximum Accreted Value
of Senior Discount Notes that may be purchased out of the Excess Proceeds. The
offer price in any Asset Sale Offer will be equal to 100% of Accreted Value plus
accrued and unpaid interest and Additional Interest, if any, to the date of
purchase, and will be payable in cash.
(d) Pending the final application of any Net Proceeds, VHS Holdco I
or such Restricted Subsidiary may temporarily reduce revolving credit borrowings
or otherwise invest the Net Proceeds in any manner that is not prohibited by the
Senior Discount Indenture.
(e) If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Issuers may use those Excess Proceeds for any purpose not
otherwise prohibited by the Senior Discount Indenture. If the aggregate Accreted
Value of Senior Discount Notes tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee will select the Senior Discount Notes to
be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds will be reset at zero.
(f) The Issuers will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of Senior Discount Notes pursuant to an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the Asset Sale provisions of this Senior Discount Indenture, the Issuers will
comply with the applicable securities laws and regulations and will not be
deemed to have breached their obligations under the Asset Sale provisions of the
Senior Discount Indenture by virtue of such conflict.
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Section 4.11 Transactions with Affiliates(a) . (a) VHS Holdco I will
not, and will not permit any of its Restricted Subsidiaries to, make any payment
to, or sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make or
amend any transaction, contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate
Transaction"), involving aggregate consideration in excess of $5.0 million,
unless:
(1) the Affiliate Transaction is on terms that are not
materially less favorable, taken as a whole, to VHS Holdco I or the
relevant Restricted Subsidiary than those that would have been obtained in
a comparable transaction by VHS Holdco I or such Restricted Subsidiary
with an unrelated Person on an arms length basis; and
(2) VHS Holdco I delivers to the Trustee, with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, a resolution
of the Board of Directors of VHS Holdco I set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been approved by a
majority of the disinterested members, if any, of the Board of Directors
of VHS Holdco I.
(b) The following items will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a) hereof:
(1) transactions between or among VHS Holdco I and/or any
Restricted Subsidiary or any entity that becomes a Restricted Subsidiary
as a result of such transaction;
(2) Restricted Payments and Permitted Investments permitted by
this Senior Discount Indenture;
(3) the payment to Sponsors of annual management, consulting,
monitoring and advisory fees in an aggregate amount in any fiscal year not
in excess of the greater of (A) $6.0 million and (B) 2.0% of EBITDA of VHS
Holdco I and its Restricted Subsidiaries for the immediately preceding
fiscal year, plus reasonable out-of-pocket costs and expenses in
connection therewith and unpaid amounts accrued for prior periods (but
after the Issue Date), and the execution of any management or monitoring
agreement subject to the same limitations;
(4) the payment of reasonable and customary fees paid to, and
indemnities provided on behalf of, officers, directors, employees or
consultants of VHS Holdco I, any Restricted Subsidiary or (to the extent
such person renders services to the businesses of VHS Holdco I and its
Subsidiaries) any of VHS Holdco I's direct or indirect parent entities;
(5) payments by VHS Holdco I or any Restricted Subsidiary to
the Sponsors and any of their Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of other
investment banking activities, including, without limitation, in
connection with acquisitions or divestitures, which
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payments are approved by a majority of the members of the Board of
Directors of VHS Holdco I in good faith;
(6) transactions in which VHS Holdco I or any Restricted
Subsidiary delivers to the Trustee a letter from an Independent Financial
Advisor stating that such transaction is fair to VHS Holdco I or such
Restricted Subsidiary from a financial point of view;
(7) payments or loans (or cancellations of loans) to employees
or consultants of VHS Holdco I, any Restricted Subsidiary or (to the
extent such person renders services to the businesses of VHS Holdco I and
its Subsidiaries) any of VHS Holdco I's direct or indirect parent
entities, which are approved by a majority of the Board of Directors of
VHS Holdco I in good faith and which are otherwise permitted under this
Senior Discount Indenture;
(8) payments made or performance under any agreement as in
effect on the Issue Date (including, without limitation, each of the
agreements entered into in connection with the Transactions) or any
amendment thereto (so long as any such amendment is not less advantageous
to the holders of the Senior Discount Notes in any material respect than
the original agreement as in effect on the Issue Date);
(9) the existence of, or the performance by VHS Holdco I or
any of its Restricted Subsidiaries of its obligations under the terms of,
the LLC Agreement (including any registration rights agreement or purchase
agreements related thereto to which it is party on the Issue Date and any
similar agreement that it may enter into thereafter); provided that the
existence of, or the performance by VHS Holdco I or any of its Restricted
Subsidiaries of its obligations under any future amendment to the LLC
Agreement or under any similar agreement or amendment thereto entered into
after the Issue Date shall only be permitted by this clause (9) to the
extent that the terms of any such amendment or new agreement are not
otherwise disadvantageous to holders of the Senior Discount Notes in any
material respect;
(10) the Transactions and the payment of all fees and expenses
related to the Transactions, including any fees to the Sponsors
substantially on the terms described in the Offering Memorandum under the
captions "The Transactions" and "Certain Relationships and Related Party
Transactions";
(11) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the ordinary
course of business and otherwise in compliance with the terms of this
Senior Discount Indenture that are fair to VHS Holdco I and or the
Restricted Subsidiaries, in the reasonable determination of the members of
the Board of Directors of VHS Holdco I or the senior management thereof,
or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party;
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(12) if otherwise permitted hereunder, the issuance of Equity
Interests (other than Disqualified Stock) of the Issuers to any direct or
indirect parent of VHS Holdco I, or to any Permitted Holder;
(13) any transaction effected as part of a Qualified
Securitization Financing;
(14) any transaction with a Captive Insurance Subsidiary in
the ordinary course of operations of such Captive Insurance Subsidiary;
(15) any employment agreements entered into by VHS Holdco I or
any of the Restricted Subsidiaries in the ordinary course of business;
(16) transactions with joint ventures in Permitted Businesses
entered into in the ordinary course of business and in a manner consistent
with past practice; and
(17) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved
by the Board of Directors of VHS Holdco I.
Section 4.12 Liens. (a) VHS Holdco I will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume or suffer to exist any Lien that secures obligations under any
Subordinated Indebtedness or Indebtedness ranking pari passu with the Senior
Discount Notes on any asset or property of VHS Holdco I or any Restricted
Subsidiary, or any income or profits therefrom, or assign or convey any right to
receive income therefrom, unless:
(1) in the case of Liens securing Subordinated Indebtedness,
the Senior Discount Notes are secured by a Lien on such property, assets
or proceeds that is senior in priority to such Liens; or
(2) in all other cases, the Senior Discount Notes are equally
and ratably secured,
(b) The provisions of Section 4.12(a) shall not apply to:
(1) Liens existing on the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date;
(2) Liens securing the Senior Discount Notes or Indebtedness
under the Credit Agreement (and any related guarantees thereof); and
(3) Permitted Liens.
Section 4.13 Conduct of Business. VHS Holdco I will not, and will
not permit any Restricted Subsidiary (other than a Securitization Subsidiary)
to, engage in any business
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other than Permitted Businesses, except to such extent as would not be material
to VHS Holdco I and its Subsidiaries taken as a whole.
Section 4.14 Offer to Repurchase Upon Change of Control. (a) Upon
the occurrence of a Change of Control, the Issuers will make an offer (a "Change
of Control Offer") to each Holder of the Senior Discount Notes to repurchase all
or any part (equal to a principal amount at maturity of $1,000 or an integral
multiple of $1,000 principal amount at maturity) of that Holder's Senior
Discount Notes repurchased (as of the date of such purchase) at a purchase price
in cash equal to 101% of the Accreted Value thereof plus accrued and unpaid
interest and Additional Interest, if any, on the Senior Discount Notes
repurchased to, but not including, the date of purchase, subject to the rights
of Holders on the relevant record date to receive interest due on the relevant
interest payment date (the "Change of Control Payment"). Within 30 days
following any Change of Control, except to the extent that the Issuers have
exercised their right to redeem the Senior Discount Notes in accordance with
Article 3 of this Senior Discount Indenture the Issuers will mail a notice to
each Holder describing the transaction or transactions that constitute the
Change of Control and stating:
(1) that the Change of Control is being made pursuant to this
Section 4.14 and that all Senior Discount Notes properly tendered pursuant
to such Change of Control Offer will be accepted for payment;
(2) the purchase price and the purchase date, which shall be
no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Senior Discount Note not tendered will continue
to accrue interest;
(4) that, unless the Issuers default in the payment of the
Change of Control Payment, all Senior Discount Notes accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest
after the Change of Control Payment Date;
(5) that Holders electing to have any Senior Discount Notes
purchased pursuant to a Change of Control Offer will be required to
surrender the Senior Discount Notes completed, or transfer by book entry
transfer, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the Change of
Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on the
second Business day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of Senior Discount Notes delivered for
purchase , and a statement that such Holder is withdrawing his election to
have the Senior Discount Notes purchased;
(7) that Holders whose Senior Discount Notes are being
purchased only in part will be issued new Senior Discount Notes equal in
Accreted Value and
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principal amount at maturity to the unpurchased portion of the Senior
Discount Notes surrendered.
The Issuers will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with the repurchase of the
Senior Discount Notes as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.14, the Issuers will comply with the applicable securities laws and
regulations and will not be deemed to have breached their obligations under this
Section 4.14 by virtue of such conflict.
(b) On the Change of Control Payment Date, the Issuers will, to the
extent lawful:
(1) accept for payment all Senior Discount Notes or portions
of Senior Discount Notes properly tendered pursuant to the Change of
Control Offer;
(2) deposit with the paying agent an amount equal to the
Change of Control Payment in respect of all Senior Discount Notes or
portions of Senior Discount Notes properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Senior
Discount Notes properly accepted together with an Officers' Certificate
stating the aggregate principal amount at maturity of Senior Discount
Notes or portions of Senior Discount Notes being purchased by the Issuers.
The paying agent will promptly mail to each Holder of Senior
Discount Notes properly tendered the Change of Control Payment for such Senior
Discount Notes, and the Trustee will promptly authenticate and mail (or cause to
be transferred by book entry) to each Holder a new Senior Discount Note equal in
Accreted Value and principal amount at maturity to any unpurchased portion of
the Senior Discount Notes surrendered, if any; provided that each new Senior
Discount Note will be in a principal amount at maturity of $1,000 or an integral
multiple of $1,000 principal amount at maturity.
(c) Prior to complying with any provisions of this Section 4.14, but
in any event within 90 days following any Change of Control, the Issuers
covenant to:
(1) repay in full in cash or Cash Equivalents all Obligations,
and terminate all commitments, under the Credit Agreement or offer to
repay in full in cash or Cash Equivalents all Obligations, and terminate
all commitments, under the Credit Agreement and to repay in full in cash
of Cash Equivalents the Obligations owed to (and terminate the commitments
of) each lender that has accepted such offer; or
(2) obtain the requisite consents under the Credit Agreement
to permit the repurchase of the Senior Discount Notes as provided above.
The Issuers will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
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(d) Notwithstanding anything to the contrary in this Section 4.14,
the Issuers will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.14 applicable to a Change of Control Offer made by the Issuers and
purchases all Senior Discount Notes properly tendered and not withdrawn under
the Change of Control Offer. A Change of Control Offer may be made in advance of
a Change of Control if a definitive agreement is in place for the Change of
Control at the time of the making of the Change of Control Offer, and such
Change of Control Offer is otherwise made in compliance with the provisions of
this Section 4.14.
Section 4.15 Payments for Consent. VHS Holdco I will not, and will
not permit any of its Subsidiaries to, directly or indirectly, pay or cause to
be paid any consideration to or for the benefit of any Holder of Senior Discount
Notes for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Senior Discount Indenture or the Senior Discount
Notes unless such consideration is offered to be paid and is paid to all Holders
of the Senior Discount Notes that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
Section 4.16 Intentionally Omitted.
Section 4.17 Intentionally Omitted.
Section 4.18 Intentionally Omitted.
Section 4.19 Existence of Corporate Co-Issuer. VHS Holdco I will
always maintain a Wholly-Owned Subsidiary that is a Restricted Subsidiary of VHS
Holdco I organized as a corporation under the laws of the United States of
America, any State thereof or the District of Columbia that will serve as a
co-issuer of the Senior Discount Notes unless VHS Holdco I is itself a
corporation under the laws of the United States of America, any State thereof or
the District of Columbia.
ARTICLE V
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of All or Substantially
All Assets. Neither Issuer may, directly or indirectly: (a) consolidate or merge
with or into or wind up into another Person (whether or not such Issuer is the
surviving corporation); or (b) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of its properties or assets, in one or more
related transactions, to another Person; unless:
(1) either:
(A) such Issuer is the surviving corporation; or
(B) the Person formed by or surviving any such
consolidation or merger (if other than such Issuer) or to which such
sale, assignment, transfer,
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conveyance or other disposition has been made is a Person organized
or existing under the laws of the jurisdiction of organization of
such Issuer or the United States, any state of the United States or
the District of Columbia (such Issuer or such Person, as the case
may be, hereinafter referred to as the "Successor Company");
(2) the Successor Company (if other than such Issuer)
expressly assumes all the obligations of such Issuer under the Senior
Discount Notes, this Senior Discount Indenture and the Senior Discount
Registration Rights Agreement pursuant to agreements reasonably
satisfactory to the Trustee; provided that at all times, a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia must be a co-issuer or the
issuer of the Senior Discount Notes;
(3) immediately after such transaction no Default or Event of
Default exists;
(4) after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period, either:
(A) the Successor Company (if other than such Issuer),
would have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09(a) hereof determined on a pro forma basis
(including pro forma application of the net proceeds therefrom), as
if such transaction had occurred at the beginning of such
four-quarter period, or
(B) the Fixed Charge Coverage Ratio for the Successor
Company and its Restricted Subsidiaries would be greater than such
ratio for VHS Holdco I and its Restricted Subsidiaries immediately
prior to such transaction; and
(5) such Issuer shall have delivered to the Trustee a
certificate from a Responsible Officer and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such amendment or
supplement (if any) comply with this Senior Discount Indenture.
Section 5.02 Successor Corporation Substituted. The Successor
Company will succeed to, and be substituted for, such Issuer under this Senior
Discount Indenture and the Senior Discount Notes. Notwithstanding the provisions
of clauses (3) and (4) of Section 5.01 hereof, (a) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to VHS Holdco I or to another Restricted Subsidiary and (b) either Issuer
may merge with an Affiliate incorporated solely for the purpose of
reincorporating such Issuer in another state of the United States, so long as
the amount of Indebtedness of VHS Holdco I and its Restricted Subsidiaries is
not increased thereby.
If a direct or indirect parent organized or existing under the laws
of the United States, any state of the United States or the District of Columbia
("Parent") of VHS Holdco I
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assumes the obligations under this Senior Discount Indenture in a transaction
which meets the requirements of Section 5.01 hereof, treating Parent as the
Successor Company for purposes of such covenant, all obligations of VHS Holdco I
under the Senior Discount Indenture shall be discharged except to the extent
that VHS Holdco I is or becomes a Subsidiary or Restricted Subsidiary. In such
event, Parent will succeed to, and be substituted for, VHS Holdco I under this
Senior Discount Indenture and the Senior Discount Notes.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. An "Event of Default" is defined as
any of the following:
(1) the Issuers default in payment when due and payable, upon
redemption, acceleration or otherwise, of the Accreted Value or principal
of, or premium, if any, on the Senior Discount Notes issued hereunder;
(2) the Issuers default in the payment when due of interest or
Additional Interest, if any, on or with respect to the Senior Discount
Notes issued hereunder and such default continues for a period of 30 days;
(3) either of the Issuers defaults in the performance of, or
breaches any covenant, warranty or other agreement contained in this
Senior Discount Indenture (other than a default in the performance or
breach of a covenant, warranty or agreement which is specifically dealt
with in clauses (1) or (2) above) and such default or breach continues for
a period of 60 days after written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the holders
of 25% or more in aggregate principal amount at maturity of the Senior
Discount Notes then outstanding voting as a single class;
(4) either of the Issuers or any Significant Subsidiary
defaults under any mortgage, indenture or instrument under which there is
issued or by which there is secured or evidenced any Indebtedness for
money borrowed by VHS Holdco I or any Restricted Subsidiary or the payment
of which is guaranteed by VHS Holdco I or any Restricted Subsidiary (other
than Indebtedness owed to VHS Holdco I or a Restricted Subsidiary),
whether such Indebtedness or guarantee now exists or is created after the
Issue Date, if (A) such default either (i) results from the failure to pay
any such Indebtedness at its Stated Maturity (after giving effect to any
applicable grace periods) or (ii) relates to an obligation other than the
obligation to pay principal of any such Indebtedness at its Stated
Maturity and results in the Holder or holders of such Indebtedness causing
such Indebtedness to become due prior to its Stated Maturity and (B) the
principal amount of such Indebtedness, together with the principal amount
of any other such Indebtedness in default for failure to pay principal at
Stated Maturity (after giving effect to any applicable grace periods), or
the maturity of which has been so accelerated, aggregate $20.0 million or
more at any one time outstanding;
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(5) either of the Issuers or any Significant Subsidiary fails
to pay final judgments (other than any judgments covered by insurance
policies issued by reputable and creditworthy insurance companies)
aggregating in excess of $20.0 million, which final judgments remain
unpaid, undischarged and unstayed for a period of more than 60 consecutive
days after such judgment becomes final, and an enforcement proceeding has
been commenced by any creditor upon such judgment or decree which is not
promptly stayed; or
(6) Either of the Issuers or any Significant Subsidiary
pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents too the appointment of a custodian of it or
for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(7) a court of competent jurisdiction interest an order or
decree under any Bankruptcy Law that:
(A) is for relief against either of the Issuers or any
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary in an
involuntary case;
(B) appoints a custodian of either of the Issuers or any
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary or for all
or substantially all of the property of either of the Issuers or any
of their Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary; or
(C) orders the liquidation of either the Issuers or any
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary; and the
order of decree remains unstayed and in effect for 60 consecutive
days.
Section 6.02 Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(6) or (7) above with respect to
either of the Issuers) shall occur and be continuing, the Trustee or the Holders
of at least 25% in principal amount at maturity of outstanding Senior Discount
Notes under the Senior Discount Indenture may declare the Accreted Value of and
accrued interest on such Senior Discount Notes to be due and payable by notice
in writing to the Issuers, the Trustee and the Representative under the Credit
Agreement
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specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), and the same shall become immediately
due and payable.
Notwithstanding the foregoing, if an Event of Default specified in
Section 6.01(6) or (7) above with respect to either of the Issuers occurs and is
continuing, then all unpaid Accreted Value or principal of, and premium, if any,
and accrued and unpaid interest on all of the outstanding Senior Discount Notes
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of the Senior
Discount Notes.
Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of Accreted Value or principal of, and premium and Additional Interest, if any,
and interest on the Senior Discount Notes or to enforce the performance of any
provision of the Senior Discount Notes or this Senior Discount Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Discount Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Senior
Discount Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
Section 6.04 Waiver of Past Defaults(a). (a) At any time after a
declaration of acceleration with respect to the Senior Discount Notes issued
under the Senior Discount Indenture as described in the preceding paragraph, the
holders of a majority in principal amount at maturity of the outstanding Senior
Discount Notes issued under the Senior Discount Indenture may rescind and cancel
such declaration and its consequences:
(1) if the rescission would not conflict with any judgment or
decree;
(2) if all existing Events of Default have been cured or
waived except nonpayment of Accreted Value or principal or interest that
has become due solely because of the acceleration;
(3) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue Accreted Value or
principal, which has become due otherwise than by such declaration of
acceleration, has been paid;
(4) if the Issuers have paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements
and advances; and
(5) in the event of the cure or waiver of an Event of Default
of the type described in Section 6.01(5), the Trustee shall have received
an Officers' Certificate and an opinion of counsel that such Event of
Default has been cured or waived.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
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The holders of a majority in principal amount at maturity of the
Senior Discount Notes issued under the Senior Discount Indenture may waive any
existing Default or Event of Default under the Senior Discount Indenture, and
its consequences, except a default in the payment of the Accreted Value or
principal of or interest on such Senior Discount Notes.
(b) In the event of any Event of Default specified in clause (4) of
Section 6.04 (a) hereof, such Event of Default and all consequences thereof
(excluding, however, any resulting payment default) will be annulled, waived and
rescinded, automatically and without any action by the Trustee or the holders of
the Senior Discount Notes, if within 20 days after such Event of Default arose
the Issuers deliver an Officers' Certificate to the Trustee stating that (1) the
Indebtedness or guarantee that is the basis for such Event of Default has been
discharged or (2) the holders thereof have rescinded or waived the acceleration,
notice or action (as the case may be) giving rise to such Event of Default or
(3) the default that is the basis for such Event of Default has been cured, it
being understood that in no event shall an acceleration of the Accreted Value of
principal amount of the Senior Discount Notes as described above be annulled,
waived or rescinded upon the happening of any such events.
Section 6.05 Control by Majority. Holders of a majority in aggregate
principal amount at maturity of the then outstanding Senior Discount Notes have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Senior Discount Indenture that the Trustee determines may be
unduly prejudicial to the rights of other holders of Senior Discount Notes or
that may involve the Trustee in personal liability.
Section 6.06 Limitation on Suits. A Holder may pursue a remedy with
respect to this Senior Discount Indenture or the Senior Discount Notes only if:
(1) such Holder has previously given the Trustee written
notice that an Event of Default is continuing;
(2) Holders of at least 25% in aggregate principal amount at
maturity of the then outstanding Senior Discount Notes make a written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to
the Trustee security or indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or indemnity;
and
(5) during such 60-day period, Holders of a majority in
aggregate principal amount at maturity of the then outstanding Senior
Discount Notes do not give the Trustee a direction inconsistent with such
request.
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A Holder of a Senior Discount Note may not use this Senior Discount
Indenture to prejudice the rights of another Holder of a Senior Discount Note or
to obtain a preference or priority over another Holder of a Senior Discount
Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Senior Discount Indenture, the right
of any Holder of a Senior Discount Note to receive payment of Accreted Value or
principal, premium and Additional Interest, if any, and interest on the Senior
Discount Note, on or after the respective due dates expressed in the Senior
Discount Note (including in connection with an offer to purchase), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee
is authorized to recover judgment in its own name and as trustee of an express
trust against the Issuers for the whole amount of Accreted Value or principal
of, premium and Additional Interest, if any, and interest remaining unpaid on,
the Senior Discount Notes and interest on overdue Accreted Value or principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Senior Discount
Notes allowed in any judicial proceedings relative to the Issuers (or any other
obligor upon the Senior Discount Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable and documented compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Discount Notes or the rights of
any Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
Section 6.10 Priorities. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
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First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Senior Discount Notes for amounts due
and unpaid on the Senior Discount Notes for Accreted Value or principal,
premium and Additional Interest, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Senior Discount Notes for Accreted Value principal, premium
and Additional Interest, if any and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct in writing.
The Trustee may fix a record date and payment date for any payment
to holders of Senior Discount Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Senior Discount Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court
in its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable and documented attorneys' fees and
expenses against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a
Senior Discount Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in aggregate principal amount of the then outstanding Senior
Discount Notes.
ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee will exercise such of the rights and
powers vested in it by this Senior Discount Indenture, and use the same degree
of care and skill in its exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Senior Discount Indenture and the Trustee need
perform only those duties that are specifically set forth in this Senior
Discount Indenture and no others, and no implied covenants or obligations
shall be read into this Senior Discount Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Senior Discount
Indenture. However, with respect to
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certificates or opinions specifically required by any provision hereof to
be furnished to it, the Trustee will examine the certificates and opinions
to determine whether or not they conform to the requirements of this
Senior Discount Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Senior Discount Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Senior Discount Indenture will require the
Trustee to expend or risk its own funds or incur any liability.
(f) The Trustee will not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02 Rights of Trustee. (a) The Trustee may conclusively
rely upon any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee will not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its own selection and the advice of such counsel or any Opinion of
Counsel will be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee will not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Senior Discount Indenture.
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(e) Unless otherwise specifically provided in this Senior Discount
Indenture, any demand, request, direction or notice from the Issuers will be
sufficient if signed by an Officer of the Issuers.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Senior Discount Indenture at the request,
order or direction of any of the Holders unless such Holders have offered to the
Trustee reasonable indemnity or security satisfactory to it against any losses,
liabilities or expenses.
(g) In no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
(h) Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Issuers with respect to the
covenants contained in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 4.01, 6.01(1) or 6.01(2) or (ii) any
Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
(j) The Trustee may request that the Issuers deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Senior
Discount Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded.
(k) Delivery of reports, information and documents to the Trustee
under Section 4.03 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Issuers' compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
Section 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Senior
Discount Notes and may otherwise deal with the Issuers or any Affiliate of the
Issuers with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer. The Trustee will not be
responsible for and makes no representation as to the validity or adequacy of
this Senior Discount Indenture or the
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Senior Discount Notes, it shall not be accountable for the Issuers' use of the
proceeds from the Senior Discount Notes or any money paid to the Issuers or upon
the Issuers' direction under any provision of this Senior Discount Indenture, it
will not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee, and it will not be responsible for any
statement or recital herein or any statement in the Senior Discount Notes or any
other document in connection with the sale of the Senior Discount Notes or
pursuant to this Senior Discount Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee will
mail to Holders of Senior Discount Notes a notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of Default in payment of Accreted Value or principal of, premium or Additional
Interest, if any, or interest on, any Senior Discount Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of the Senior Discount Notes.
Section 7.06 Reports by Trustee to Holders of the Notes(a) . (a)
Within 60 days after each May 15 beginning with the May 15 following the date of
this Senior Discount Indenture, and for so long as Senior Discount Notes remain
outstanding, the Trustee will mail to the Holders of the Senior Discount Notes a
brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also will comply with TIA Section 313(b)(2). The Trustee will also
transmit by mail all reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders
of Senior Discount Notes will be mailed by the Trustee to the Issuers and filed
by the Trustee with the SEC and each stock exchange on which the Senior Discount
Notes are listed in accordance with TIA Section 313(d). The Issuers will
promptly notify the Trustee when the Senior Discount Notes are listed on any
stock exchange or delisted therefrom.
Section 7.07 Compensation and Indemnity(a) . (a) The Issuers will
pay to the Trustee from time to time reasonable compensation for its acceptance
of this Senior Discount Indenture and services hereunder. The Trustee's
compensation will not be limited by any law on compensation of a trustee of an
express trust. The Issuers will reimburse the Trustee promptly upon request for
all reasonable and documented disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable and documented compensation, disbursements and expenses
of the Trustee's agents and counsel.
(b) The Issuers and the Guarantor, jointly and severally, will
indemnify the Trustee against any and all losses, liabilities, claims, damages
or expenses incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Senior Discount Indenture, including
the reasonable and documented costs and expenses of enforcing this Senior
Discount Indenture against the Issuers and the Guarantor (including this Section
7.07) and defending itself against any claim (whether asserted by the Issuers,
the Guarantor, any Holder or any other Person) or liability in connection with
the exercise or performance of any of
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its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its own negligence, bad faith or willful
misconduct. The Trustee will notify the Issuers promptly of any claim of which a
Responsible Officer has received written notice for which it may seek indemnity.
Failure by the Trustee to so notify the Issuers will not relieve the Issuers or
the Guarantor of their obligations hereunder. The Issuers or the Guarantor will
defend the claim and the Trustee will cooperate in the defense. The Trustee may
have separate counsel and the Issuers and the Guarantor, as applicable, will pay
the reasonable and documented fees and expenses of such counsel provided,
however, that the Issuers and the Guarantor shall not be required to pay such
fees and expenses if it assumes such indemnified parties' defense and, in such
indemnified parties' reasonable judgment, there is no conflict of interest
between the Issuers and the Guarantor, as applicable, and such parties in
connection with such defense. Neither the Issuers nor the Guarantor need pay for
any settlement made without its consent, which consent will not be unreasonably
withheld.
(c) The obligations of the Issuers and the Guarantor under this
Section 7.07 will survive the satisfaction and discharge of this Senior Discount
Indenture.
(d) To secure the Issuers' and the Guarantor's payment obligations
in this Section 7.07, the Trustee will have a Lien prior to the Senior Discount
Notes on all money or property held or collected by the Trustee, except that
held in trust to pay principal and interest on particular Notes. Such Lien will
survive the satisfaction and discharge of this Senior Discount Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(7) or (8) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee. (a) A resignation or
removal of the Trustee and appointment of a successor Trustee will become
effective only upon the successor Trustee's acceptance of appointment as
provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Issuers. The Holders of a
majority in aggregate principal amount at maturity of the then outstanding
Senior Discount Notes may remove the Trustee by so notifying the Trustee and the
Issuers in writing. The Issuers may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee
or its property; or
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(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuers will promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount at maturity of the then outstanding
Senior Discount Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Issuers.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers,
or the Holders of at least 10% in principal amount of the then outstanding
Senior Discount Notes may petition, at the expense of the Issuers, any court of
competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been
a Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition, at the expense of the Issuers, any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Senior Discount Indenture. The successor Trustee will mail a notice
of its succession to Holders. The retiring Trustee will promptly transfer all
property held by it as Trustee to the successor Trustee; provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuers' obligations under Section 7.07 hereof will continue
for the benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification. There will at all times
be a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition.
This Senior Discount Indenture will always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is
subject to TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against the Issuers.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant
Defeasance. The Issuers may at any time, at the option of their Board of
Directors evidenced by a resolution set forth in an Officers' Certificate, elect
to have either Section 8.02 or 8.03 hereof be applied to all outstanding Senior
Discount Notes upon compliance with the conditions set forth below in this
Article 8.
Section 8.02 Legal Defeasance and Discharge. Upon the Issuers'
exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Issuers will, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be deemed to have been discharged from their obligations
with respect to all outstanding Senior Discount Notes on the date the conditions
set forth below are satisfied (hereinafter, "Legal Defeasance"). For this
purpose, Legal Defeasance means that the Issuers will be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Senior
Discount Notes, which will thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 hereof and the other Sections of this Senior Discount
Indenture referred to in clauses (1) and (2) below, and to have satisfied all
their other obligations under such Senior Discount Notes, and this Senior
Discount Indenture (and the Trustee, on demand of and at the expense of the
Issuers, shall execute proper instruments acknowledging the same), except for
the following provisions which will survive until otherwise terminated or
discharged hereunder:
(1) the rights of Holders of outstanding Senior Discount Notes
to receive payments in respect of the Accreted Value or principal of, or
interest or premium and Additional Interest, if any, on, such Senior
Discount Notes when such payments are due from the trust referred to in
Section 8.04 hereof;
(2) the Issuers' obligations with respect to such Senior
Discount Notes under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Issuers' obligations in connection therewith;
and
(4) this Article 8.
Subject to compliance with this Article 8, the Issuers may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance. Upon the Issuers' exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Issuers
will, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from each of their obligations under the covenants contained
in Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16 and
4.18 and clauses (3) and (4) of Section 5.01 hereof with respect to the
outstanding Senior Discount Notes on and after the date the conditions set forth
in Section 8.04 hereof are satisfied (hereinafter, "Covenant Defeasance"), and
the Senior Discount Notes will
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thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Senior Discount Notes will not be deemed outstanding for accounting purposes).
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Senior Discount Notes, the Issuers may omit to comply with and will
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Senior Discount Indenture and such Senior Discount Notes and Senior Discount
Note Guarantees will be unaffected thereby. In addition, upon the Issuers'
exercise under Section 8.01 hereof of the option applicable to this Section
8.03, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(3) through 6.01(5) hereof will not constitute Events of
Default.
Section 8.04 Conditions to Legal or Covenant Defeasance. In order to
exercise either Legal Defeasance or Covenant Defeasance under either Section
8.02 or 8.03 hereof:
(1) the Issuers must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the Accreted Value or principal of,
or interest and premium and Additional Interest, if any, on, the
outstanding Senior Discount Notes on the stated maturity thereof or on the
applicable redemption date, as the case may be, and the Issuers must
specify whether the Senior Discount Notes are being defeased to such
stated maturity or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the
Issuers must deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that:
(A) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling; or
(B) since the Issue Date, there has been a change in the
applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel reasonably
acceptable to the Trustee shall confirm that, the Holders of the
respective outstanding Senior Discount Notes will not recognize
income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.03 hereof, the
Issuers must deliver to the Trustee an Opinion of Counsel confirming that
the Holders of the respective outstanding Senior Discount Notes will not
recognize income, gain or loss for
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federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit and the grant of Liens in connection therewith) or insofar as
Events of Default (other than Events of Default resulting from the
borrowing of funds to be applied to such deposit and the granting of Liens
in connection therewith) resulting from bankruptcy or insolvency events
are concerned, at any time in the period ending on the 91st day after the
date of deposit;
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, the
Credit Agreement or any other material agreement or instrument (other than
this Senior Discount Indenture) to which VHS Holdco I or any of its
Restricted Subsidiaries is a party or by which VHS Holdco I or any of its
Restricted Subsidiaries is bound;
(6) the Issuers must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the
intent of preferring the holders of Senior Discount Notes over the other
creditors of the Issuers with the intent of defeating, hindering, delaying
or defrauding any creditors of the Issuers or others; and
(7) the Issuers must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have
been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in
respect of the outstanding Senior Discount Notes will be held in trust and
applied by the Trustee, in accordance with the provisions of such Senior
Discount Notes and this Senior Discount Indenture, to the payment, either
directly or through any Paying Agent (including the Issuers acting as Paying
Agent) as the Trustee may determine, to the holders of such Senior Discount
Notes of all sums due and to become due thereon in respect of Accreted Value or
principal, premium and Additional Interest, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Issuers will pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Senior
Discount Notes.
Notwithstanding anything in this Article 8 to the contrary, the
Trustee will deliver or pay to the Issuers from time to time upon the request of
the Issuers any money or non-callable
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Government Securities held by it as provided in Section 8.04 hereof which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.04(1) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Issuers. Any money deposited with the
Trustee or any Paying Agent, or then held by the Issuers, in trust for the
payment of the Accreted Value or principal of, premium or Additional Interest,
if any, or interest on, any Senior Discount Note and remaining unclaimed for two
years after such Accreted Value or principal, premium or Additional Interest, if
any, or interest has become due and payable shall be paid to the Issuers on
their request or (if then held by the Issuers) will be discharged from such
trust; and the Holder of such Senior Discount Note will thereafter be permitted
to look only to the Issuers for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Issuers as trustee thereof, will thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuers causes to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which will not
be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuers.
Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. dollars or non-callable Government Securities in accordance
with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Issuers' obligations under this
Senior Discount Indenture and the Senior Discount Notes will be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Issuers make any payment of principal of,
premium or Additional Interest, if any, or interest on, any Senior Discount Note
following the reinstatement of its obligations, the Issuers will be subrogated
to the rights of the Holders of such Senior Discount Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes. Notwithstanding
Section 9.02 of this Senior Discount Indenture, the Issuers and the Trustee may
amend or supplement this Senior Discount Indenture or the Senior Discount Notes
or the Senior Discount Note Guarantees without the consent of any Holder of
Senior Discount Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Senior Discount Notes in
addition to or in place of certificated Senior Discount Notes;
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(3) to provide for the assumption of either Issuer's
obligations to the Holders of the Senior Discount Notes by a successor to
the Issuers pursuant to Article 5;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Senior Discount Notes or that
does not adversely affect the legal rights hereunder of any Holder;
(5) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Senior Discount Indenture under the
TIA; or
(6) to add a guarantee of the Senior Discount Notes or to
release the guarantee of Vanguard.
Upon the request of the Issuers accompanied by a resolution of their
Board of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Issuers in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Senior Discount Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Senior Discount Indenture or
otherwise.
Section 9.02 With Consent of Holders of Notes. (a) Except as
provided below in this Section 9.02, the Issuers and the Trustee may amend or
supplement this Senior Discount Indenture (including, without limitation,
Sections 4.10 and 4.14 hereof) and the Senior Discount Notes or the Senior
Discount Note Guarantees with the consent of the Holders of at least a majority
in aggregate principal amount at maturity of the then outstanding Senior
Discount Notes voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Senior Discount Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the Accreted Value or principal of, premium or
Additional Interest, if any, or interest on, the Senior Discount Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Senior Discount Indenture or the Senior
Discount Notes or the Senior Discount Note Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount at maturity
of the then outstanding Senior Discount Notes (including, without limitation,
Additional Senior Discount Notes, if any) voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Senior Discount Notes). Section 2.08
hereof shall determine which Senior Discount Notes are considered to be
"outstanding" for purposes of this Section 9.02.
(b) Upon the request of the Issuers accompanied by a resolution of
their Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Senior Discount
Notes as aforesaid, and upon receipt by the Trustee of the documents described
in Section 7.02 hereof, the Trustee will join with the Issuers in the execution
of such amended or supplemental indenture unless such amended or supplemental
indenture directly affects the
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Trustee's own rights, duties or immunities under this Senior Discount Indenture
or otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental Indenture.
(c) It is not be necessary for the consent of the Holders of Senior
Discount Notes under this Section 9.02 to approve the particular form of any
proposed amendment, supplement or waiver, but it is sufficient if such consent
approves the substance thereof.
(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuers will mail to the Holders of Senior Discount Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Issuers to mail such notice, or any defect therein,
will not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Senior Discount Notes
then outstanding voting as a single class may waive compliance in a particular
instance by the Issuers with any provision of this Senior Discount Indenture or
the Senior Discount Notes or the Senior Discount Note Guarantees. However,
without the consent of each Holder affected, an amendment, supplement or waiver
under this Section 9.02 may not (with respect to any Senior Discount Notes held
by a non-consenting Holder):
(1) reduce the Accreted Value or principal amount at maturity
of Senior Discount Notes whose holders must consent to an amendment,
supplement or waiver;
(2) reduce the Accreted Value or principal amount at maturity
of or change the fixed maturity of any Senior Discount Note or alter the
provisions with respect to the redemption of the Senior Discount Notes
(other than provisions relating to Sections 4.10 and 4.14 hereof);
(3) reduce the rate of or extend the time for payment of
interest on any Senior Discount Note;
(4) waive a Default or Event of Default in the payment of
Accreted Value or principal of, or premium or Additional Interest, if any,
or interest on, the Senior Discount Notes (except a rescission of
acceleration of the Senior Discount Notes by the holders of at least a
majority in aggregate principal amount at maturity of the then outstanding
Senior Discount Notes and a waiver of the payment default that resulted
from such acceleration);
(5) make any Senior Discount Note payable in money other than
that stated in the Senior Discount Notes;
(6) make any change in the provisions of this Senior Discount
Indenture relating to waivers of past Defaults or impair the rights of
Holders of Senior Discount Notes to receive payments of Accreted Value or
principal of, or interest or premium or Additional Interest, if any, on,
the Senior Discount Notes;
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(7) waive a redemption payment with respect to any Senior
Discount Note (other than a payment required by Section 4.10 or 4.14
hereof);
(8) expressly subordinate the Senior Discount Notes to any
other Indebtedness of the Issuers; or
(9) make any change in the preceding amendment and waiver
provisions.
Section 9.03 Compliance with Trust Indenture Act. Every amendment or
supplement to this Senior Discount Indenture or the Senior Discount Notes will
be set forth in a amended or supplemental indenture that complies with the TIA
as then in effect.
Section 9.04 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Senior
Discount Note is a continuing consent by the Holder of a Senior Discount Note
and every subsequent Holder of a Senior Discount Note or portion of a Senior
Discount Note that evidences the same debt as the consenting Holder's Senior
Discount Note, even if notation of the consent is not made on any Senior
Discount Note. However, any such Holder of a Senior Discount Note or subsequent
Holder of a Senior Discount Note may revoke the consent as to its Senior
Discount Note if the Trustee receives written notice of revocation before the
date the amendment, supplement or waiver becomes effective. After an amendment,
supplement or waiver becomes effective in accordance with its terms, it
thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes. The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Senior
Discount Note thereafter authenticated. The Issuers in exchange for all Senior
Discount Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Senior Discount Notes that reflect the
amendment, supplement or waiver. Failure to make the appropriate notation or
issue a new Senior Discount Note will not affect the validity and effect of such
amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc. The Trustee will sign
any amended or supplemental indenture authorized pursuant to this Article 9 if
the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Issuers may not sign an amended or
supplemental indenture until the Boards of Directors of the Issuers approve it.
In executing any amended or supplemental indenture, the Trustee will be provided
with and (subject to Section 7.01 hereof) will be fully protected in relying
upon, in addition to the documents required by Section 13.04 hereof, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this Senior
Discount Indenture.
105
ARTICLE X
INTENTIONALLY OMITTED
ARTICLE XI
SENIOR DISCOUNT NOTE GUARANTEE
Section 11.01 Senior Discount Note Guarantee. (a) Subject to
this Article 11, Vanguard unconditionally guarantees on a senior unsecured basis
as a primary obligor and not merely as a surety, to each Holder and to the
Trustee and its successors and assigns:
(1) the full and punctual payment when due, whether at Stated
Maturity, by acceleration, by redemption or otherwise, of all obligations
of the Issuers under this Senior Discount Indenture (including obligations
to the Trustee) and the Senior Discount Notes, whether for payment of
Accreted Value or principal of, premium, if any, or interest on in respect
of the Senior Discount Notes and all other monetary obligations of the
Issuers under this Senior Discount Indenture and the Senior Discount
Notes; and
(2) the full and punctual performance within applicable grace
periods of all other obligations of the Issuers whether for fees,
expenses, indemnification or otherwise under this Senior Discount
Indenture and the Senior Discount Notes (all the foregoing being
hereinafter collectively called the "Guaranteed Obligations").
The Guarantor further agrees that the Guaranteed Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
each such Guarantor, and that such Guarantor shall remain bound under this
Article 11 notwithstanding any extension or renewal of any Guaranteed
Obligation.
(b) The Guarantor hereby agrees that its obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Senior Discount Notes or this Senior Discount Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Senior
Discount Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Issuers, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor waives presentation to, demand of payment
from and protest to the Issuers of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. The Guarantor waives notice of any
default under the Senior Discount Notes or the Guaranteed Obligations. The
obligations of the Guarantor hereunder shall not be affected by (i) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Issuers or any other Person under this Senior
Discount Indenture, the Senior Discount Notes or any other agreement or
otherwise; (ii) any extension or renewal of this Senior Discount Indenture, the
Senior Discount Notes or any other agreement; (iii) any rescission, waiver,
amendment or modification of any of the terms or provisions of this Senior
Discount Indenture, the Senior Discount Notes or any other agreement; (iv) the
release of any security held by any Holder or the Trustee for the Guaranteed
Obligations or the Guarantor; (v) the failure of any Holder or Trustee to
exercise any right or remedy against any other guarantor of the
106
Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor,
except as provided in Section 11.03.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantor or any custodian, trustee,
liquidator or other similar official acting in relation to either the Issuers or
the Guarantor, any amount paid by either to the Trustee or such Holder, this
Senior Discount Note Guarantee, to the extent theretofore discharged, will be
reinstated in full force and effect. The Guarantor hereby waives any right to
which it may be entitled to have its obligations hereunder divided among the
Guarantor, such that such Guarantor's obligations would be less than the full
amount claimed. Each Guarantor hereby waives any right to which it may be
entitled to have the assets of the Issuers first be used and depleted as payment
of the Issuers' or such Guarantor's obligations hereunder prior to any amounts
being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby
waives any right to which it may be entitled to require that the Issuers be sued
prior to an action being initiated against such Guarantor.
(d) The Guarantor further agrees that its Senior Discount Note
Guarantee herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Guaranteed Obligations.
(e) Except as expressly set forth in Sections 8.01, 11.02 and 11.03,
the obligations of the 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 the Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Senior Discount
Indenture, the Senior Discount Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of the Guarantor or would otherwise
operate as a discharge of the Guarantor as a matter of law or equity.
(f) The Guarantor agrees that its Senior Discount Note Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Guaranteed Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Issuers or
otherwise.
(g) 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 the
Guarantor by virtue hereof, upon the failure of the Issuers to pay the principal
of or interest on any Guaranteed Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Guaranteed Obligation, the Guarantor hereby
107
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the holders or the Trustee an amount equal
to the sum of (i) the unpaid Accreted Value or principal amount of such
Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed
Obligations (but only to the extent not prohibited by applicable law) and (iii)
all other monetary obligations of the Issuers to the holders and the Trustee.
(h) The Guarantor agrees that, as between it, on the one hand, and
the holders and the Trustee, on the other hand, (x) the maturity of the
Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article 6 for the purposes of any Senior Discount Note Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (y)
in the event of any declaration of acceleration of such Guaranteed Obligations
as provided in Article 6, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by such Guarantor for the
purposes of this Section 11.01.
(i) The 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 11.01.
(j) Upon request of the Trustee, the Guarantor shall execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Senior
Discount Indenture.
Section 11.02 Limitation on Liability. Any term or provision of this
Senior Discount Indenture to the contrary notwithstanding, the maximum aggregate
amount of the Guaranteed Obligations guaranteed hereunder by the Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Senior Discount Indenture, as it relates to such Guarantor, voidable under
applicable fraudulent conveyance or fraudulent transfer provisions of the United
States Bankruptcy Code or any comparable provisions of State law or similar laws
affecting the rights of creditors generally.
Section 11.03 Release. Notwithstanding any other provisions of this
Senior Discount Indenture, Vanguard may be released from all of its obligations
under its Guarantee and shall cease to be a Guarantor for all purposes under
this Senior Discount Indenture, at the option of the Issuers and Vanguard at any
time following the Issue Date.
Section 11.04 Successors and Assigns. This Article 11 shall be
binding upon the Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in this Senior Discount
Indenture and in the Senior Discount Notes shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
of this Senior Discount Indenture.
Section 11.05 No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or
108
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 11 at law, in equity, by statute or
otherwise.
Section 11.06 Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by the
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 the Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
ARTICLE XII
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge. This Senior Discount
Indenture will be discharged and will cease to be of further effect as to all
Senior Discount Notes issued hereunder, when:
(1) either:
(A) all Senior Discount Notes that have been
authenticated, except lost, stolen or destroyed Senior Discount
Notes that have been replaced or paid and Senior Discount Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuers and thereafter repaid to
the Issuers, have been delivered to the Trustee for cancellation; or
(B) all Senior Discount Notes that have not been
delivered to the Trustee for cancellation have become due and
payable by reason of the mailing of a notice of redemption or
otherwise or will become due and payable within one year and the
Issuers or any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for the
benefit of the holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as
will be sufficient, without consideration of any reinvestment of
interest, to pay and discharge the entire Indebtedness on the Senior
Discount Notes not delivered to the Trustee for cancellation for
Accreted Value or principal, premium and Additional Interest, if
any, and accrued interest to the date of maturity or redemption;
(2) the Issuers have paid or caused to be paid all sums
payable by them under this Senior Discount Indenture; and
(3) in the event of a deposit as provided in clause (1)(B)
above, the Issuers have delivered irrevocable instructions to the Trustee
under this Senior Discount Indenture to apply the deposited money toward
the payment of the Senior Discount Notes at maturity or on the redemption
date, as the case may be.
109
In addition, the Issuers must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Senior
Discount Indenture, if money has been deposited with the Trustee pursuant to
this Section 12.01(1)(b), the provisions of Sections 12.02 and 8.06 hereof will
survive such satisfaction and discharge. In addition, nothing in this Section
12.01 will be deemed to discharge those provisions of Section 7.07 hereof, that,
by their terms, survive the satisfaction and discharge of this Senior Discount
Indenture.
Section 12.02 Application of Trust Money. Subject to the provisions
of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section
13.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Senior Discount Notes and this Senior Discount Indenture, to
the payment, either directly or through any Paying Agent (including the Issuers
acting as their own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Additional Interest, if any)
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Issuers' and any Guarantor's obligations under this Senior
Discount Indenture and the Senior Discount Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 12.01 hereof; provided
that if the Issuers have made any payment of principal of, premium or Additional
Interest, if any, or interest on, any Senior Discount Notes because of the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the holders of such Senior Discount Notes to receive such payment from the
money or Government Securities held by the Trustee or Paying Agent.
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls. If any provision of this
Senior Discount Indenture limits, qualifies or conflicts with the duties imposed
by TIA Section 318(c), the imposed duties will control.
Section 13.02 Notices. Any notice or communication by the Issuers,
any guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or by first class mail (registered or certified, return
receipt requested), facsimile transmission or overnight air courier guaranteeing
next day delivery, to the others' address:
If to the Issuers and/or the Guarantor:
Vanguard Health Systems, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
000
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile No.: 000-000-0000
Attention: General Counsel
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Rise Xxxxxx, Esq.
If to the Trustee:
U.S. Bank National Association
Corporate Trust Services
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
The Issuers, the Guarantor or the Trustee, by notice to the others,
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
will be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if transmitted by
facsimile; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuers mail a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders
of Notes. Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Senior Discount Indenture or the
Senior Discount Notes. The Issuers, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
111
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any action
under this Senior Discount Indenture (other than in connection with the
Authentication Order, dated the date hereof, and delivered to the Trustee in
connection with the issuance of the Initial Senior Discount Notes), the Issuers
shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth
in Section 10.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Senior
Discount Indenture relating to the proposed action have been satisfied;
and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth
in Section 10.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 13.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Senior Discount Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) must comply with the provisions of
TIA Section 314(e) and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him
or her to express an informed opinion as to whether or not such covenant
or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 13.07 No Personal Liability of Directors, Officers,
Employees and Stockholders. No past, present or future director, officer,
employee, incorporator or stockholder of the Issuers or any direct or indirect
parent entity (other than Vanguard), as such, will have any liability for any
obligations of the Issuers under the Senior Discount Notes, this Senior Discount
Indenture, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Senior Discount Notes by accepting
a Senior Discount Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the
112
Senior Discount Notes. The waiver may not be effective to waive liabilities
under the federal securities laws.
Section 13.08 Governing Law. THIS SENIOR DISCOUNT INDENTURE, THE
SENIOR DISCOUNT NOTES AND VANGUARD'S GUARANTEE OF THE ISSUERS' OBLIGATIONS
PURSUANT TO THE SENIOR DISCOUNT NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 13.09 Successors. All agreements of the Issuers in this
Senior Discount Indenture and the Senior Discount Notes will bind their
respective successors. All agreements of the Trustee in this Senior Discount
Indenture will bind its successors. All agreements of the Guarantor in this
Senior Discount Indenture will bind its successors, except as otherwise provided
in Section 10.04 hereof.
Section 13.10 Severability. In case any provision in this Senior
Discount Indenture or in the Senior Discount Notes is invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 13.11 Counterpart Originals. The parties may sign any number
of copies of this Senior Discount Indenture. Each signed copy will be an
original, but all of them together represent the same agreement.
Section 13.12 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles and
Sections of this Senior Discount Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Senior Discount
Indenture and will in no way modify or restrict any of the terms or provisions
hereof.
[Signatures on following page]
113
Dated as of September 23, 2004
SIGNATURES
VANGUARD HEALTH HOLDING COMPANY I, LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
VANGUARD HOLDING COMPANY I, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
VANGUARD HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President, Chief
Financial Officer & Treasurer
Counterpart Signature Page
Senior Discount Notes Indenture
Dated as of September 23, 2004
SIGNATURES
U.S. Bank National Association
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Authorized Signatory
Counterpart Signature Page
Senior Discount Notes Indenture
EXHIBIT A1
[Face of Senior Discount Note]
CUSIP/ISIN
11-1/4% Senior Discount Notes due 2015
No. ____ Principal Amount at Maturity $_____________
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 0000 XX
XXX. XX XXX XXXXXX XXXXXX INTERNAL REVENUE CODE OF 1986, AS AMENDED. FOR EACH
$1,000 PRINCIPAL AMOUNT AT MATURITY OF THIS NOTE, THE ISSUE PRICE IS $577.13 AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $422.87. THE ISSUE DATE OF THIS NOTE IS
SEPTEMBER 23, 2004 AND THE YIELD TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS
11.25%.
VANGUARD HEALTH HOLDING COMPANY I, LLC
and
VANGUARD HOLDING COMPANY I, INC.
promise to pay to CEDE & CO. or registered assigns, the principal sum of
$__________ DOLLARS on October 1, 2015.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: September 23, 2004
VANGUARD HEALTH HOLDING COMPANY I, LLC
By: ___________________________________
Name:
Title:
VANGUARD HOLDING COMPANY I, INC.
A1-1
By: ___________________________________
Name:
Title:
This is one of the Senior Discount Notes referred to
in the within-mentioned Senior Discount Indenture:
U.S. Bank National Association, as Trustee
By: ______________________________________
Authorized Signatory
A1-2
[Back of Senior Discount Note]
11-1/4% Senior Discount Notes due 2015
[Insert the Senior Discount Global Note Legend, if applicable pursuant to the
provisions of the Senior Discount Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Senior Discount Indenture]
Capitalized terms used herein have the meanings assigned to them in
the Senior Discount Indenture referred to below unless otherwise indicated.
(1) INTEREST. Vanguard Health Holding Company I, LLC, a Delaware
limited liability company, ("VHS Holdco I"), Vanguard Holding Company I, Inc., a
Delaware corporation and a wholly owned subsidiary of VHS Holdco I (together
with VHS Holdco I, the "Issuers"), promise to pay interest on the principal
amount at maturity of this Senior Discount Note at 11-1/4% per annum from
September 23, 2004 until maturity and shall pay the Additional Interest, if any,
payable pursuant to Section 8 of the Registration Rights Agreement referred to
below. Until October 1, 2009, interest will accrue on the Senior Discount Notes
at a rate of 11-1/4% per annum in the form of an increase in the Accreted Value
(representing amortization of original issue discount) between the date of
original issuance and October 1, 2009, on a semi-annual basis using a 360-day
year comprised of twelve 30-day months, such that the Accreted Value shall be
equal to the full principal amount at maturity of the Senior Discount Notes on
October 1, 2009 (the "Full Accretion Date"). Beginning on the Full Accretion
Date, cash interest on the Senior Discount Notes will accrue at the rate of
11-1/4% per annum and will be payable semiannually in arrears on April 1, and
October 1 of each year to holders of record on the immediately preceding March
15 and September 15 commencing April 1, 2010. Cash interest on the Senior
Discount Notes shall accrue from the most recent date to which interest has been
paid or duly provided for or, if no interest has been paid or duly provided for,
from and including October 1, 2009 until the principal hereof is due. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months. The
Issuers shall pay interest on overdue principal at the rate borne by the Senior
Discount Notes, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
(2) METHOD OF PAYMENT. The Issuers will pay interest on the Senior
Discount Notes (except defaulted interest) and Additional Interest, if any, to
the Persons who are registered Holders of Senior Discount Notes at the close of
business on the March 15 or September 15 next preceding the Interest Payment
Date, even if such Senior Discount Notes are canceled after such record date and
on or before such Interest Payment Date, except as provided in Section 2.12 of
the Senior Discount Indenture with respect to defaulted interest. Payments in
respect of Senior Discount Notes represented by Senior Discount Global Notes
(including Accrete Value or principal, premium, if any, and interest) shall be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company or any successor depositary. The Issuers will
make all payments in respect of a Definitive Note (including Accrete Value or
principal, premium, if any, and interest), at the office of each Paying Agent,
except that, at the option of the Issuers, payment of interest may be made by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Senior Discount Notes may also be made in the case
of a Holder of at least $1,000,000 aggregate principal amount at maturity of
Senior Discount Notes, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder elects payment by wire
transfer
A1-3
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). Such payment will be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Senior Discount Indenture, will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to any Holder. The Issuers or any of their Subsidiaries may act
in any such capacity.
(4) INDENTURE. The Issuers have issued the Senior Discount Notes
under a Senior Discount Indenture dated as of September 23, 2004 (the "Senior
Discount Indenture") among the Issuers, the Guarantor and the Trustee. The terms
of the Senior Discount Notes include those stated in the Senior Discount
Indenture and those made part of the Senior Discount Indenture by reference to
the TIA. Terms defined in the Senior Discount Indenture and not defined herein
have the meanings ascribed thereto in the Senior Discount Indenture. The Senior
Discount Notes are subject to all the terms and provisions of the Senior
Discount Indenture, and Holders are referred to the Senior Discount Indenture
and the TIA for a statement of such terms. To the extent any provision of this
Senior Discount Note conflicts with the express provisions of the Senior
Discount Indenture, the provisions of the Senior Discount Indenture shall govern
and be controlling.
The Senior Discount Notes are general senior unsecured obligations
of the Issuers. This Senior Discount Note is one of the Initial Senior Discount
Notes referred to in the Senior Discount Indenture. The Senior Discount Notes
include the Initial Senior Discount Notes, any Additional Senior Discount Notes
and any Senior Discount Exchange Notes issued in exchange for Initial Senior
Discount Notes or Additional Senior Discount Notes pursuant to the Senior
Discount Indenture. The Initial Senior Discount Notes, any Additional Senior
Discount Notes and any Senior Discount Exchange Notes are treated as a single
class of securities under the Senior Discount Indenture. The Senior Discount
Indenture imposes certain limitations on the ability of the Issuers and their
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur
Indebtedness, enter into consensual restrictions upon the payment of certain
dividends and distributions by such Restricted Subsidiaries, issue or sell
shares of capital stock of the Issuers and such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or Incur Liens and
make asset sales. The Senior Discount Indenture also imposes limitations on the
ability of the Issuers to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all of its property.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and (c) of this
Paragraph 5, the Issuers will not have the option to redeem the Senior Discount
Notes prior to October 1, 2009. On or after October 1, 2009, the Issuers may
redeem all or a part of the Senior Discount Notes upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount at maturity) set forth below plus accrued and unpaid interest
and Additional Interest, if any, on the Senior Discount Notes to be redeemed to,
but not including, the applicable redemption date, if redeemed during the
twelve-month period beginning on October 1 of the years indicated below, subject
to the rights of Holders on the relevant record date to receive interest, if
any, due on the relevant interest payment date:
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Year Percentage
---- ----------
2009......................................................................................... 105.625%
2010......................................................................................... 103.750%
2011......................................................................................... 101.875%
2012 and thereafter.......................................................................... 100.000%
Unless the Issuers default in the payment of the redemption price,
interest will cease to accrue on the Senior Discount Notes or portions thereof
called for redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to October 1, 2007, the Issuers may on any one or
more occasions redeem up to 35% of the aggregate principal amount at maturity of
the Senior Discount Notes issued under the Senior Discount Indenture (including
any additional notes issued after the Issue Date) at a redemption price of
111.25% of the Accreted Value thereof, plus accrued and unpaid interest and
Additional Interest, if any, to, but not including the redemption date, with the
net cash proceeds of one or more Equity Offerings (1) by the Issuers or (2) by
any direct or indirect parent of VHS Holdco I, in each case, to the extent the
net cash proceeds thereof are contributed to the common equity capital of VHS
Holdco I or used to purchase Capital Stock (other than Disqualified Stock) of
VHS Holdco I from it; provided that (1) at least 65% in aggregate principal
amount at maturity of the Senior Discount Notes issued under the Senior Discount
Indenture (excluding Senior Discount Notes held by the Issuers and their
Subsidiaries) remains outstanding immediately after the occurrence of such
redemption and (2) that such redemption occurs within 90 days of the date of the
closing of such Equity Offering.
(c) At any time prior to October 1, 2009, the Issuers may also
redeem all or a part of the Senior Discount Notes, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the Accreted Value of
the Senior Discount Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Additional Interest, if any, to but not
including, the date of redemption, subject to the rights of Holders of Senior
Discount Notes on the relevant record date to receive interest, if any, due on
the relevant interest payment date.
(6) MANDATORY REDEMPTION. The Issuers are not required to make
mandatory redemption or sinking fund payments with respect to the Senior
Discount Notes.
(7) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Senior Discount Notes are to be redeemed at its registered address,
except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the
Senior Discount Notes or a satisfaction or discharge of the Senior Discount
Indenture. Senior Discount Notes in denominations larger than $1,000 principal
amount at maturity may be redeemed in part but only in whole multiples of $1,000
principal amount at maturity.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Issuers will make an offer
(a "Change of Control Offer") to each Holder of the Senior Discount Notes to
repurchase all or any part (equal to
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$1,000 principal amount at maturity or an integral multiple of $1,000 principal
amount at maturity) of that Holder's Senior Discount Notes at a purchase price
in cash equal to 101% of the Accreted Value of the Senior Discount Notes
repurchased (as the date of such purchase) plus accrued and unpaid interest and
Additional Interest, if any, on the Senior Discount Notes repurchased to, but
not including, the date of purchase, subject to the rights of Holders on the
relevant record date to receive interest, if any, due on the relevant interest
payment date. Within 30 days following any Change of Control, except to the
extent that the Issuers have exercised their right to redeem the Senior Discount
Notes in accordance with Article 3 of the Senior Discount Indenture, the Issuers
will mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Senior Discount Indenture. The
provisions of this clause (a) are subject to the provisions of Section 4.14(c)
of the Senior Discount Indenture.
(b) If VHS Holdco I or a Restricted Subsidiary of VHS Holdco I
consummates any Asset Sales, within ten Business Days of each date on which the
aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuers will
commence an offer to all Holders of Senior Discount Notes and all holders of
other Indebtedness that is pari passu with the Senior Discount Notes containing
provisions similar to those set forth in the Senior Discount Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets (an
"Asset Sale Offer") pursuant to Section 4.10 of the Senior Discount Indenture to
purchase on a pro rata basis the maximum Accreted Value of Senior Discount Notes
and such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the Accreted
Value thereof plus accrued and unpaid interest and Additional Interest, if any,
thereon to the date of purchase, in accordance with the procedures set forth in
the Senior Discount Indenture. To the extent that, any Excess Proceeds remain
after the consummation of an Asset Sale Offer, the Issuers may use those Excess
Proceeds for any purpose not otherwise prohibited by the Senior Discount
Indenture. If the aggregate Accreted Value of Senior Discount Notes and other
pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount
of Excess Proceeds, the Trustee shall select the Senior Discount Notes and such
other pari passu Indebtedness to be purchased on a pro rata basis. Holders of
Senior Discount Notes that are the subject of an offer to purchase will receive
an Asset Sale Offer from the Issuers prior to any related purchase date and may
elect to have such Senior Discount Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" attached to the Senior Discount
Notes.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Discount Notes are
in registered form without coupons in denominations of $1,000 principal amount
at maturity and integral multiples of $1,000 principal amount at maturity. The
transfer of Senior Discount Notes may be registered and Senior Discount Notes
may be exchanged as provided in the Senior Discount Indenture. The Registrar and
the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Issuers may require a Holder to pay
any taxes and fees required by law or permitted by the Senior Discount
Indenture. The Issuers need not exchange or register the transfer of any Senior
Discount Note or portion of a Senior Discount Note selected for redemption,
except for the unredeemed portion of any Senior Discount Note being redeemed in
part. Also, the Issuers need not exchange or register the transfer of any Senior
Discount Notes for a period of 15 days before a selection of Senior Discount
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Senior
Discount Note may be treated as its owner for all purposes.
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(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Senior Discount Indenture or the Senior Discount Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount at maturity of the then outstanding Senior
Discount Notes including Additional Senior Discount Notes, if any, voting as a
single class, and any existing Default or Event or Default or compliance with
any provision of the Senior Discount Indenture or the Senior Discount Notes may
be waived with the consent of the Holders of a majority in aggregate principal
amount at maturity of the then outstanding Senior Discount Notes including
Additional Senior Discount Notes, if any, voting as a single class. Without the
consent of any Holder of a Senior Discount Note, the Senior Discount Indenture
or the Senior Discount Notes may be amended or supplemented (i) to cure any
ambiguity, defect or inconsistency, (ii) to provide for uncertificated Senior
Discount Notes in addition to or in place of certificated Senior Discount Notes,
(iii) to provide for the assumption of either Issuers' obligations to Holders of
the Senior Discount Notes in case of a merger or consolidation or sale of all or
substantially all of such Issuers' assets, (iv) to make any change that would
provide any additional rights or benefits to the Holders of the Senior Discount
Notes or that does not adversely affect the legal rights under the Senior
Discount Indenture of any such Holder, (v) to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Senior Discount
Indenture under the TIA or (vi) to add a Guarantee of the Senior Discount Notes
or to release Vanguard's guarantee of the Senior Discount Notes.
(12) DEFAULTS AND REMEDIES. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount at maturity of the then outstanding Senior Discount Notes may declare all
the Senior Discount Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Issuers, all outstanding Senior
Discount Notes will become due and payable immediately without further action or
notice. Holders may not enforce the Senior Discount Indenture or the Senior
Discount Notes except as provided in the Senior Discount Indenture. Subject to
certain limitations, Holders of a majority in aggregate principal amount at
maturity of the then outstanding Senior Discount Notes may direct the Trustee in
its exercise of any trust or power. The Holders of a majority in aggregate
principal amount at maturity of the then outstanding Senior Discount Notes by
notice to the Trustee may, on behalf of the Holders of all of the Senior
Discount Notes, rescind an acceleration or waive any existing Default or Event
of Default and its consequences under the Senior Discount Indenture except a
continuing Default or Event of Default in the payment of Accreted Value or
principal of or interest or Additional Interest, if any, on, the Senior Discount
Notes. The Issuers are required to deliver to the Trustee annually a statement
regarding compliance with the Senior Discount Indenture, and the Issuers are
required, upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
(13) DISCHARGE AND DEFEASANCE. Subject to certain conditions, the
Issuers at any time may terminate some or all of their obligations under the
Senior Discount Notes and the Senior Discount Indenture if the Issuers deposit
with the Trustee money or Government Securities for the payment of Accreted
Value, premium, if any and interest, if any, on the Senior Discount Notes to
redemption or maturity, as the case may be.
(14) TRUSTEE DEALINGS WITH THE ISSUERS. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers or their Affiliates, as if it were not the Trustee.
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(15) NO RECOURSE AGAINST OTHERS. A director, manager, officer,
employee, incorporator, member or stockholder of the Issuers or any of the
Guarantor, as such, will not have any liability for any obligations of the
Issuers or the Guarantor under the Senior Discount Notes, the Senior Discount
Note Guarantee or the Senior Discount Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Senior Discount Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Senior
Discount Notes.
(16) AUTHENTICATION. This Senior Discount Note will not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Senior Discount Notes under the Senior Discount Indenture, Holders of Restricted
Senior Discount Global Notes and Restricted Definitive Notes will have all the
rights set forth in the Registration Rights Agreement dated as of September 23,
2004, among the Issuers, the guarantor and the Initial Purchasers named therein
or, in the case of Additional Senior Discount Notes, Holders of Restricted
Global Senior Discount and Restricted Definitive Notes will have the rights set
forth in one or more registration rights agreements, if any, among the Issuers,
the guarantor and the other parties thereto, relating to rights given by the
Issuers and the guarantor to the purchasers of any Additional Senior Discount
Notes (collectively, the "Registration Rights Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Senior Discount Notes, and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Discount Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed thereon.
(20) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND
BE USED TO CONSTRUE THE SENIOR DISCOUNT INDENTURE, THIS SENIOR DISCOUNT NOTE AND
THE SENIOR DISCOUNT NOTE GUARANTEE.
The Issuers will furnish to any Holder upon written request and
without charge a copy of the Senior Discount Indenture and/or the Registration
Rights Agreement. Requests may be made to:
Vanguard Health Holding Company I, LLC
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
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ASSIGNMENT FORM
To assign this Senior Discount Note, fill in the form below:
(I) or (we) assign and transfer this Senior Discount Note to: __________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Senior Discount Note on the books of the Issuers. The agent
may substitute another to act for him.
Date:_____________
Your Signature: ________________________________
(Sign exactly as your name
appears on the face of this
Senior Discount Note)
Signature Guarantee*: _______________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A1-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Discount Note purchased by
the Issuers pursuant to Section 4.10 or 4.14 of the Senior Discount Indenture,
check the appropriate box below:
[_] Section 4.10 [_] Section 4.14
If you want to elect to have only part of the Senior Discount Note
purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the Senior
Discount Indenture, state the amount you elect to have purchased:
$
Date: ____________
Your Signature: _________________________________
(Sign exactly as your name
appears on the face of this
Senior Discount Note)
Tax Identification No.:__________________________
Signature Guarantee*:____________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Senior Discount Global
Note for an interest in another Senior Discount Global Note or for a Definitive
Note, or exchanges of a part of another Senior Discount Global Note or
Definitive Note for an interest in this Senior Discount Global Note, have been
made:
Principal
Amount of Amount of Amount at
decrease in increase in Maturity of this
Principal Principal Senior Discount
Amount at Amount at Global Note Signature of
Maturity of this Maturity of this following such authorized officer
Date of Senior Discount Senior Discount decrease (or of Trustee or
Exchange Global Note Global Note increase) Custodian
-------- ----------- ----------- --------- ---------
* This schedule should be included only if the Senior Discount Note is
issued in global form.
A1-11
EXHIBIT A2
[Face of Regulation S Temporary Senior Discount Global Note]
CUSIP/ISIN
11-1/4% Senior Discount Notes due 2015
No. ____ Principal Amount at Maturity $_____________
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 0000 XX
XXX. XX XXX XXXXXX XXXXXX INTERNAL REVENUE CODE OF 1986, AS AMENDED. FOR EACH
$1,000 PRINCIPAL AMOUNT AT MATURITY OF THIS NOTE, THE ISSUE PRICE IS $577.13 AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $422.87. THE ISSUE DATE OF THIS NOTE IS
SEPTEMBER 23, 2004 AND THE YIELD TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS
11.25%.
VANGUARD HEALTH HOLDING COMPANY I, LLC
and
VANGUARD HOLDING COMPANY I, INC.
promise to pay to CEDE & CO. or registered assigns, the principal sum of
$__________ DOLLARS on October 1, 2015.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: September 23, 2004
VANGUARD HEALTH HOLDING COMPANY I, LLC
By: __________________________________
Name:
Title:
VANGUARD HOLDING COMPANY I, INC.
By: __________________________________
Name:
Title:
This is one of the Senior Discount Notes referred to
in the within-mentioned Senior Discount Indenture:
U.S. Bank National Association, as Trustee
By:_______________________________________
Authorized Signatory
A2-1
[Back of Regulation S Temporary Senior Discount Global Note]
11-1/4% Senior Discount Notes due 2015
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY SENIOR DISCOUNT GLOBAL NOTE,
AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SENIOR
DISCOUNT NOTES, ARE AS SPECIFIED IN THE SENIOR DISCOUNT INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY SENIOR DISCOUNT GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF
INTEREST HEREON.
THIS SENIOR DISCOUNT GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
SENIOR DISCOUNT INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE SENIOR DISCOUNT
INDENTURE, (2) THIS SENIOR DISCOUNT GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE SENIOR DISCOUNT INDENTURE, (3)
THIS SENIOR DISCOUNT GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE SENIOR DISCOUNT INDENTURE AND (4)
THIS SENIOR DISCOUNT GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR DISCOUNT NOTES
IN DEFINITIVE FORM, THIS SENIOR DISCOUNT NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANIES (55 XXXXX XXXXXX, XXX XXXX, XXX
XXXX) ("XXX"), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
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FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT:
(A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED
INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH
SUCH ACCOUNT,
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE MEANING
OF RULE 501(a) (1), (2),(3) OR (7) UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR"), OR
(C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT), AND
(2) AGREES FOR THE BENEFIT OF THE ISSUERS THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT
IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND ONLY:
(A) TO THE ISSUERS,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE
UNDER THE SECURITIES ACT,
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT,
(D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT,
(E) IN A PRINCIPAL AMOUNT AT MATURITY OF NOT LESS THAN $100,000,000
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
DELIVERS TO THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM
OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS NOTE, OR
(F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
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PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR
(2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE
OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE
REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE ISSUERS
RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS
OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE
PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SENIOR DISCOUNT NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SENIOR
DISCOUNT NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE,
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE SENIOR DISCOUNT INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR DISCOUNT NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
Capitalized terms used herein have the meanings assigned to them in
the Senior Discount Indenture referred to below unless otherwise indicated.
(1) INTEREST. Vanguard Health Holding Company I, LLC, a Delaware
limited liability company, ("VHS Holdco I"), Vanguard Holding Company I, Inc., a
Delaware corporation and a wholly owned subsidiary of VHS Holdco I (together
with VHS Holdco I, the "Issuers"), promise to pay interest on the principal
amount at maturity of this Senior Discount Note at 11-1/4% per annum from
September 23, 2004 until maturity and shall pay the Additional Interest, if any,
payable pursuant to Section 8 of the Registration Rights Agreement referred to
below. Until October 1, 2009, interest will accrue on the Senior Discount Notes
at a rate of 11-1/4% per annum in the form of an increase in the Accreted Value
(representing amortization of original issue discount) between the date of
original issuance and October 1, 2009, on a semi-annual basis using a 360-day
year comprised of twelve 30-day months, such that the Accreted Value shall be
equal to the full principal amount at maturity of the Senior Discount Notes on
October 1, 2009 (the "Full Accretion Date"). Beginning on the Full Accretion
Date, cash interest on the Senior Discount Notes will accrue at the rate of
11-1/4% per annum and will be payable semiannually in arrears on April 1, and
October 1 of each year to holders of record on the immediately preceding March
15 and September 15 commencing April 1, 2010. Cash interest on the Senior
Discount Notes shall accrue from the most recent date to which interest has been
paid or duly provided for, if no interest has been paid or duly provided for,
from and including October 1, 2009 until the principal hereof is due. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months. The
Issuers shall pay interest on overdue principal at the
A2-4
rate borne by the Senior Discount Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Until this Regulation S Temporary Senior Discount Global Note is
exchanged for one or more Regulation S Permanent Senior Discount Global Notes,
the Holder hereof shall not be entitled to receive payments of interest hereon;
until so exchanged in full, this Regulation S Temporary Senior Discount Global
Note shall in all other respects be entitled to the same benefits as other
Senior Discount Notes under the Senior Discount Indenture.
(2) METHOD OF PAYMENT. The Issuers will pay interest on the Senior
Discount Notes (except defaulted interest) and Additional Interest, if any, to
the Persons who are registered Holders of Senior Discount Notes at the close of
business on the March 15 or September 15 next preceding the Interest Payment
Date, even if such Senior Discount Notes are canceled after such record date and
on or before such Interest Payment Date, except as provided in Section 2.12 of
the Senior Discount Indenture with respect to defaulted interest. Payments in
respect of Senior Discount Notes represented by Senior Discount Global Notes
(including Accreted Value or principal, premium, if any, and interest) shall be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company or any successor depositary. The Issuers will
make all payments in respect of a Definitive Note (including principal, Accreted
Value or premium, if any, and interest), at the office of each Paying Agent,
except that, at the option of the Issuers, payment of interest may be made by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Senior Discount Notes may also be made in the case
of a Holder of at least $1,000,000 aggregate principal amount of Senior Discount
Notes, by wire transfer to a U.S. dollar account maintained by the payee with a
bank in the United States if such Holder elects payment by wire transfer by
giving written notice to the Trustee or 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). Such payment will be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National
Association, the Trustee under the Senior Discount Indenture, will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to any Holder. The Issuers or any of their Subsidiaries may act
in any such capacity.
(4) INDENTURE. The Issuers have issued the Senior Discount Notes
under a Senior Discount Indenture dated as of September 23, 2004 (the "Senior
Discount Indenture") among the Issuers, the Guarantor and the Trustee. The terms
of the Senior Discount Notes include those stated in the Senior Discount
Indenture and those made part of the Senior Discount Indenture by reference to
the TIA. Terms defined in the Senior Discount Indenture and not defined herein
have the meanings ascribed thereto in the Senior Discount Indenture. The Senior
Discount Notes are subject to all the terms and provisions of the Senior
Discount Indenture, and Holders are referred to the Senior Discount Indenture
and the TIA for a statement of such terms. To the extent any provision of this
Senior Discount Note conflicts with the express provisions of the Senior
Discount Indenture, the provisions of the Senior Discount Indenture shall govern
and be controlling.
A2-5
The Senior Discount Notes are general senior unsecured obligations
of the Issuers. This Senior Discount Note is one of the Initial Senior Discount
Notes referred to in the Senior Discount Indenture. The Senior Discount Notes
include the Initial Senior Discount Notes, any Additional Senior Discount Notes
and any Senior Discount Exchange Notes issued in exchange for Initial Senior
Discount Notes or Additional Senior Discount Notes pursuant to the Senior
Discount Indenture. The Initial Senior Discount Notes, any Additional Senior
Discount Notes and any Senior Discount Exchange Notes are treated as a single
class of securities under the Senior Discount Indenture. The Senior Discount
Indenture imposes certain limitations on the ability of the Issuers and their
Restricted Subsidiaries to, among other things, make certain Investments and
other Restricted Payments, pay dividends and other distributions, incur
Indebtedness, enter into consensual restrictions upon the payment of certain
dividends and distributions by such Restricted Subsidiaries, issue or sell
shares of capital stock of the Issuers and such Restricted Subsidiaries, enter
into or permit certain transactions with Affiliates, create or Incur Liens and
make asset sales. The Senior Discount Indenture also imposes limitations on the
ability of the Issuers to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all of its property.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and (c) of this
Paragraph 5, the Issuers will not have the option to redeem the Senior Discount
Notes prior to October 1, 2009. On or after October 1, 2009, the Issuers may
redeem all or a part of the Senior Discount Notes upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount at maturity) set forth below plus accrued and unpaid interest
and Additional Interest, if any, on the Senior Discount Notes to be redeemed to,
but not including, the applicable redemption date, if redeemed during the
twelve-month period beginning on October 1 of the years indicated below, subject
to the rights of Holders on the relevant record date to receive interest, if
any, due on the relevant interest payment date:
Year Percentage
---- ----------
2009........................................................................................ 105.625%
2010........................................................................................ 103.750%
2011........................................................................................ 101.875%
2012 and thereafter......................................................................... 100.000%
Unless the Issuers default in the payment of the redemption price,
interest will cease to accrue on the Senior Discount Notes or portions thereof
called for redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to October 1, 2007, the Issuers may on any one or
more occasions redeem up to 35% of the aggregate principal amount at maturity of
the Senior Discount Notes issued under the Senior Discount Indenture (including
any additional notes issued after the Issue Date) at a redemption price of
111.25% of the Accreted Value thereof, plus accrued and unpaid interest and
Additional Interest, if any, to, but not including the redemption date, with the
net cash proceeds of one or more Equity Offerings (1) by the Issuers or (2) by
any direct or indirect parent of VHS
A2-6
Holdco I, in each case, to the extent the net cash proceeds thereof are
contributed to the common equity capital of VHS Holdco I or used to purchase
Capital Stock (other than Disqualified Stock) of VHS Holdco I from it; provided
that (1) at least 65% in aggregate principal amount at maturity of the Senior
Discount Notes issued under the Senior Discount Indenture (excluding Senior
Discount Notes held by the Issuers and their Subsidiaries) remains outstanding
immediately after the occurrence of such redemption and (2) that such redemption
occurs within 90 days of the date of the closing of such Equity Offering.
(c) At any time prior to October 1, 2009, the Issuers may also
redeem all or a part of the Senior Discount Notes, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the Accreted Value of
the Senior Discount Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Additional Interest, if any, to, the date of
redemption, subject to the rights of Holders of Senior Discount Notes on the
relevant record date to receive interest, if any, due on the relevant interest
payment date.
(6) MANDATORY REDEMPTION. The Issuers are not required to make
mandatory redemption or sinking fund payments with respect to the Senior
Discount Notes.
(7) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Senior Discount Notes are to be redeemed at its registered address,
except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the
Senior Discount Notes or a satisfaction or discharge of the Senior Discount
Indenture. Senior Discount Notes in denominations larger than $1,000 principal
amount at maturity may be redeemed in part but only in whole multiples of $1,000
principal amount at maturity.
(8) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Issuers will make an offer
(a "Change of Control Offer") to each Holder of the Senior Discount Notes to
repurchase all or any part (equal to $1,000 principal amount at maturity or an
integral multiple of $1,000 principal amount at maturity) of that Holder's
Senior Discount Notes at a purchase price in cash equal to 101% of Accreted
Value of the Senior Discount Notes repurchased (as the date of such purchase)
plus accrued and unpaid interest and Additional Interest, if any, on the Senior
Discount Notes repurchased to, but not including, the date of purchase, subject
to the rights of Holders on the relevant record date to receive interest, if
any, due on the relevant interest payment date. Within 30 days following any
Change of Control, except to the extent that the Issuers have exercised their
right to redeem the Senior Discount Notes in accordance with Article 3 of the
Senior Discount Indenture, the Issuers will mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Senior Discount Indenture. The provisions of this clause (a) are subject to the
provisions of Section 4.14(c) of the Senior Discount Indenture.
(b) If VHS Holdco I or a Restricted Subsidiary of VHS Holdco I
consummates any Asset Sales, within ten Business Days of each date on which the
aggregate
A2-7
amount of Excess Proceeds exceeds $20.0 million, the Issuers will commence an
offer to all Holders of Senior Discount Notes and all holders of other
Indebtedness that is pari passu with the Senior Discount Notes containing
provisions similar to those set forth in the Senior Discount Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets (an
"Asset Sale Offer") pursuant to Section 4.10 of the Senior Discount Indenture to
purchase on a pro rata basis the maximum Accreted Value of Senior Discount Notes
and such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the Accreted
Value thereof plus accrued and unpaid interest and Additional Interest, if any,
thereon to the date of purchase, in accordance with the procedures set forth in
the Senior Discount Indenture. To the extent that any Excess Proceeds remain
after the consummation of an Asset Sale Offer, the Issuers may use those Excess
Proceeds for any purpose not otherwise prohibited by the Senior Discount
Indenture. If the aggregate Accreted Value of Senior Discount Notes and other
pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount
of Excess Proceeds, the Trustee shall select the Senior Discount Notes and such
other pari passu Indebtedness to be purchased on a pro rata basis. Holders of
Senior Discount Notes that are the subject of an offer to purchase will receive
an Asset Sale Offer from the Issuers prior to any related purchase date and may
elect to have such Senior Discount Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" attached to the Senior Discount
Notes.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Discount Notes are
in registered form without coupons in denominations of $1,000 principal amount
at maturity and integral multiples of $1,000 principal amount at maturity. The
transfer of Senior Discount Notes may be registered and Senior Discount Notes
may be exchanged as provided in the Senior Discount Indenture. The Registrar and
the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Issuers may require a Holder to pay
any taxes and fees required by law or permitted by the Senior Discount
Indenture. The Issuers need not exchange or register the transfer of any Senior
Discount Note or portion of a Senior Discount Note selected for redemption,
except for the unredeemed portion of any Senior Discount Note being redeemed in
part. Also, the Issuers need not exchange or register the transfer of any Senior
Discount Notes for a period of 15 days before a selection of Senior Discount
Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
This Regulation S Temporary Senior Discount Global Note is
exchangeable in whole or in part for one or more Senior Discount Global Notes
only (i) on or after the termination of the 40-day distribution compliance
period (as defined in Regulation S) and (ii) upon presentation of certificates
(accompanied by an Opinion of Counsel, if applicable) required by Article 2 of
the Senior Discount Indenture. Upon exchange of this Regulation S Temporary
Senior Discount Global Note for one or more Senior Discount Global Notes, the
Trustee shall cancel this Regulation S Temporary Senior Discount Global Note.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Senior
Discount Note may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Senior Discount Indenture or the Senior Discount Notes may be
amended or
A2-8
supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the then outstanding Senior Discount Notes including
Additional Senior Discount Notes, if any, voting as a single class, and any
existing Default or Event or Default or compliance with any provision of the
Senior Discount Indenture or the Senior Discount Notes may be waived with the
consent of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Discount Notes including Additional Senior Discount Notes, if
any, voting as a single class. Without the consent of any Holder of a Senior
Discount Note, the Senior Discount Indenture or the Senior Discount Notes may be
amended or supplemented (i) to cure any ambiguity, defect or inconsistency, (ii)
to provide for uncertificated Senior Discount Notes in addition to or in place
of certificated Senior Discount Notes, (iii) to provide for the assumption of
either Issuers' obligations to Holders of the Senior Discount Notes in case of a
merger or consolidation or sale of all or substantially all of such Issuers'
assets, (iv) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Discount Notes or that does not adversely
affect the legal rights under the Senior Discount Indenture of any such Holder,
(v) to comply with the requirements of the SEC in order to effect or maintain
the qualification of the Senior Discount Indenture under the TIA, or (vi) to add
a Guarantee of the Senior Discount Notes or to release the Guarantee of
Vanguard.
(12) DEFAULTS AND REMEDIES. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Senior Discount Notes may declare all the Senior
Discount Notes to be due and payable immediately. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Issuers, all outstanding Senior Discount Notes
will become due and payable immediately without further action or notice.
Holders may not enforce the Senior Discount Indenture or the Senior Discount
Notes except as provided in the Senior Discount Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then
outstanding Senior Discount Notes may direct the Trustee in its exercise of any
trust or power. The Holders of a majority in aggregate principal amount of the
then outstanding Senior Discount Notes by notice to the Trustee may, on behalf
of the Holders of all of the Senior Discount Notes, rescind an acceleration or
waive any existing Default or Event of Default and its consequences under the
Senior Discount Indenture except a continuing Default or Event of Default in the
payment of Accreted Value or principal of, or interest or Additional Interest,
if any, on, the Senior Discount Notes. The Issuers are required to deliver to
the Trustee annually a statement regarding compliance with the Senior Discount
Indenture, and the Issuers are required, upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
(13) DISCHARGE AND DEFEASANCE. Subject to certain conditions, the Issuers
at any time may terminate some or all of their obligations under the Senior
Discount Notes and the Senior Discount Indenture if the Issuers deposit with the
Trustee money or Government Securities for the payment of Accreted Value,
premium, if any and interest, if any, on the Senior Discount Notes to redemption
or maturity, as the case may be.
(14) TRUSTEE DEALINGS WITH THE ISSUERS. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Issuers or their Affiliates, and may otherwise deal with the
Issuers or their Affiliates, as if it were not the Trustee.
A2-9
(15) NO RECOURSE AGAINST OTHERS. A director, manager, officer, employee,
incorporator, member or stockholder of the Issuers or any of the guarantor, as
such, will not have any liability for any obligations of the Issuers or the
guarantor under the Senior Discount Notes, the Senior Discount Note Guarantee or
the Senior Discount Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Senior
Discount Note waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Senior Discount Notes.
(16) AUTHENTICATION. This Senior Discount Note will not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
(17) ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(18) ADDITIONAL RIGHTS OF HOLDERS. In addition to the rights provided to
Holders of Senior Discount Notes under the Senior Discount Indenture, Holders of
Restricted Senior Discount Global Notes and Restricted Definitive Notes will
have all the rights set forth in the Registration Rights Agreement dated as of
September 23, 2004, among the Issuers, the guarantor and the Initial Purchasers
named therein or, in the case of Additional Senior Discount Notes, Holders of
Restricted Senior Discount Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any,
among the Issuers, the guarantor and the other parties thereto, relating to
rights given by the Issuers and the guarantor to the purchasers of any
Additional Senior Discount Notes (collectively, the "Registration Rights
Agreement").
(19) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused
CUSIP numbers to be printed on the Senior Discount Notes, and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Discount Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed thereon.
(20) GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE
USED TO CONSTRUE THE SENIOR DISCOUNT INDENTURE, THIS SENIOR DISCOUNT NOTE AND
THE SENIOR DISCOUNT NOTE GUARANTEE.
A2-10
The Issuers will furnish to any Holder upon written request and without
charge a copy of the Senior Discount Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Vanguard Health Holding Company I, LLC
Vanguard Holding Company I, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
A2-11
ASSIGNMENT FORM
To assign this Senior Discount Note, fill in the form below:
(I) or (we) assign and transfer this Senior Discount Note to: __________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Senior Discount Note on the books of
the Issuers. The agent may substitute another to act for him.
Date: ________________
Your Signature: ______________________
(Sign exactly as your
name appears on the
face of this Senior
Discount Note)
Signature Guarantee*: ____________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Discount Note purchased by the
Issuers pursuant to Section 4.10 or 4.14 of the Senior Discount Indenture, check
the appropriate box below:
[_] Section 4.10 [_] Section 4.14
If you want to elect to have only part of the Senior Discount Note
purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the Senior
Discount Indenture, state the amount you elect to have purchased:
$
Date: __________________
Your Signature: ____________________________________
(Sign exactly as your name appears
on the face of this Senior Discount
Note)
Tax Identification No.: ____________________________
Signature Guarantee*: ____________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A2-13
SCHEDULE OF EXCHANGES OF INTERESTS IN THE REGULATION S TEMPORARY
SENIOR DISCOUNT GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Senior
Discount Global Note for an interest in another Senior Discount Global Note, or
exchanges of a part of another other Restricted Senior Discount Global Note for
an interest in this Regulation S Temporary Senior Discount Global Note, have
been made:
Principal
Amount of Amount of Amount at
decrease in increase in Maturity of this
Principal Principal Senior Discount
Amount at Amount at Global Note Signature of
Maturity of this Maturity of this following such authorized officer
Date of Senior Discount Senior Discount decrease (or of Trustee or
Exchange Global Note Global Note increase) Custodian
-------- ----------- ----------- --------- ---------
A2-14
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Vanguard Health Holding Company I, LLC
Vanguard Holding Company I, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
U.S. Bank National Association
Corporate Trust Services
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: General Counsel
Re: 11-1/4% Senior Discount Notes due 2015
Reference is hereby made to the Senior Discount Indenture, dated as of
September 23, 2004 (the "Senior Discount Indenture"), among Vanguard Health
Holding Company I, LLC, a Delaware limited liability company, ("VHS Holdco I"),
Vanguard Holding Company I, Inc., a Delaware corporation and a wholly owned
subsidiary of VHS Holdco I (together with VHS Holdco I, the "Issuers"), the
Guarantor party thereto and U.S. Bank National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Senior Discount Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Senior Discount Note[s] or interest in such Senior Discount Note[s] specified in
Annex A hereto, in the principal amount at maturity of $___________ in such
Senior Discount Note[s] or interests (the "Transfer"), to
___________________________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE SENIOR DISCOUNT 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO
RULE 144A. The Transfer is being effected pursuant to and in accordance with
Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Senior Discount Note is being transferred to a Person
that the Transferor reasonably believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A, and such Transfer
is in compliance with any applicable blue sky securities laws of any state of
the United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Senior Discount Indenture, the transferred beneficial interest
or Definitive Note will be subject to the
B-1
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Senior Discount Global Note and/or the Restricted Definitive Note and
in the Senior Discount Indenture and the Securities Act.
2. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE REGULATION S TEMPORARY SENIOR DISCOUNT GLOBAL NOTE, THE REGULATION S
PERMANENT SENIOR DISCOUNT GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT
TO REGULATION S. The Transfer is being effected pursuant B-1 to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made
to a Person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Senior Discount Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Permanent
Senior Discount Global Note, the Regulation S Temporary Senior Discount Global
Note and/or the Restricted Definitive Note and in the Senior Discount Indenture
and the Securities Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI SENIOR DISCOUNT GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE
PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Senior Discount
Global Notes and Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act and any applicable blue sky securities laws of any state
of the United States, and accordingly the Transferor hereby further certifies
that (check one):
(a) [_] such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act; or
(b) [_] such Transfer is being effected to the Issuers or a subsidiary
thereof; or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act; or
(d) [_] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than
B-2
Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within the meaning
of Regulation D under the Securities Act and the Transfer complies with the
transfer restrictions applicable to beneficial interests in a Restricted Senior
Discount Global Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Senior Discount
Indenture and (2) requested by an Issuer, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Senior Discount Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the IAI Senior Discount Global Note
and/or the Restricted Definitive Notes and in the Senior Discount Indenture and
the Securities Act.
4. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
AN UNRESTRICTED SENIOR DISCOUNT GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE
NOTE.
(a) [_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Senior
Discount Indenture and any applicable blue sky securities laws of any state of
the United States and (ii) the restrictions on transfer contained in the Senior
Discount Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Senior Discount Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Senior Discount Global Notes, on Restricted Definitive Notes
and in the Senior Discount Indenture.
(b) [_] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Senior Discount Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Senior Discount Indenture and the Private Placement Legend are not required
in order to maintain compliance with the Securities Act. Upon consummation of
the proposed Transfer in accordance with the terms of the Senior Discount
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Senior Discount Global Notes, on Restricted
Definitive Notes and in the Senior Discount Indenture.
(c) [_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Senior Discount Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Senior Discount Indenture and the Private Placement Legend are not
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required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Senior
Discount Indenture, the transferred beneficial interest or Definitive Note will
not be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Senior Discount Global Notes or
Restricted Definitive Notes and in the Senior Discount Indenture.
B-4
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
[Insert Name of Transferor]
By:_________________________
Name:
Title:
Dated: _____________________
B-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_]Senior Discount 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Senior Discount Global Note (CUSIP _________), or
(iii) [_] IAI Senior Discount Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_]Senior Discount 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Senior Discount Global Note (CUSIP _________), or
(iii) [_] IAI Senior Discount Global Note (CUSIP _________); or
(iv) [_] Unrestricted Senior Discount Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note, in accordance with the terms of the
Senior Discount Indenture.
B-6
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Vanguard Health Holding Company I, LLC
Vanguard Holding Company I, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
U.S. Bank National Association
Corporate Trust Services
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: General Counsel
Re: 11-1/4% Senior Discount Notes due 2015
(CUSIP ________________ )
Reference is hereby made to the Senior Discount Indenture, dated as of
September 23, 2004 (the "Senior Discount Indenture"), among Vanguard Health
Holding Company I, LLC, a Delaware limited liability company, ("VHS Holdco I"),
Vanguard Holding Company I, Inc., a Delaware corporation and a wholly owned
subsidiary of VHS Holdco I (together with VHS Holdco I, the "Issuers"), the
Guarantor party thereto and U.S. Bank National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Senior Discount Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Senior Discount Note[s] or interest in such Senior Discount Note[s]
specified herein, in the principal amount at maturity of $_____________ in such
Senior Discount Note[s] or interests (the "Exchange"). In connection with the
Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED SENIOR DISCOUNT GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED SENIOR DISCOUNT GLOBAL NOTE
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
SENIOR DISCOUNT GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED SENIOR
DISCOUNT GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Senior Discount Global Note for a beneficial interest
in an Unrestricted Senior Discount Global Note in an equal principal amount, the
Owner hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Senior Discount
Global Notes and pursuant to and in accordance with the
C-1
Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Senior Discount Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the beneficial interest in an Unrestricted Senior
Discount Global Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(b) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
SENIOR DISCOUNT GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Senior Discount
Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i)
the Definitive Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Senior Discount Global Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Senior Discount Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED SENIOR DISCOUNT GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Senior Discount Global Note, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Senior Discount Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Senior Discount Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED SENIOR DISCOUNT GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED SENIOR DISCOUNT GLOBAL NOTES
C-2
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
SENIOR DISCOUNT GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Senior Discount
Global Note for a Restricted Definitive Note with an equal principal amount, the
Owner hereby certifies that the Restricted Definitive Note is being acquired for
the Owner's own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Senior Discount Indenture, the
Restricted Definitive Note issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Definitive Note and in the Senior Discount Indenture and the
Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED SENIOR DISCOUNT GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] [_] Senior Discount 144A Global Note, [_] Regulation S Senior
Discount Global Note, [_] IAI Senior Discount Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Senior Discount Global Notes and pursuant to and in
accordance with the Securities Act, and in compliance with any applicable blue
sky securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Senior Discount Indenture,
the beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Senior Discount Global Note and in the Senior Discount Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: _____________________
C-3
EXHIBIT E
FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Vanguard Health Holding Company I, LLC
Vanguard Holding Company I, Inc.
c/o Vanguard Health Systems Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
U.S. Bank National Association
Corporate Trust Services
00 Xxxxxxxxxx Xxxxxx
Xx.Xxxx, Xxxxxxxxx 00000
Attention: General Counsel]
Re: 11-1/4% Senior Discount Notes due 2015
Reference is hereby made to the Senior Discount Indenture, dated as of
September 23, 2004 (the "Senior Discount Indenture"), among Vanguard Health
Holding Company I, LLC, a Delaware limited liability company, ("VHS Holdco I"),
Vanguard Holding Company I, Inc., a Delaware corporation and a wholly owned
subsidiary of VHS Holdco I (together with VHS Holdco I, the "Issuers"), the
Guarantor party thereto and U.S. Bank National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Senior Discount Indenture.
In connection with our proposed purchase of $______________ aggregate
principal amount at maturity of:
(a) [_] a beneficial interest in a Senior Discount Global Note, or
(b) [_] a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Senior Discount Notes
or any interest therein is subject to certain restrictions and conditions set
forth in the Senior Discount Indenture and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Senior Discount Notes or
any interest therein except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Senior Discount Notes have
not been registered under the Securities Act, and that the Senior Discount Notes
and any interest therein may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any accounts
for which we are acting as hereinafter stated, that
E-1
if we should sell the Senior Discount Notes or any interest therein, we will do
so only (A) to the Issuers or any subsidiary thereof, (B) in accordance with
Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished on its behalf
by a U.S. broker-dealer) to you and to the Issuers a signed letter substantially
in the form of this letter and, if requested by an Issuer, an Opinion of Counsel
in form reasonably acceptable to the Issuers to the effect that such transfer is
in compliance with the Securities Act, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant
to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any Person purchasing the Definitive Note or beneficial interest
in a Senior Discount Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Senior Discount Notes
or beneficial interest therein, we will be required to furnish to you and the
Issuers such certifications, legal opinions and other information as you and the
Issuers may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Senior Discount Notes
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Senior Discount
Notes, and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Senior Discount Notes or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
Name:
Title:
Dated: _______________________
E-2
s
