<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1995
REGISTRATION NO. 33-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
COLUMBIA/HCA HEALTHCARE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 8062 75-2497104
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
ONE PARK PLAZA
NASHVILLE, TENNESSEE 37203
(615) 327-9551
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
STEPHEN T. BRAUN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
COLUMBIA/HCA HEALTHCARE CORPORATION
201 WEST MAIN STREET
LOUISVILLE, KENTUCKY 40202
(502) 572-2000
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
----------------
Copies to:
Allan G. Sperling, Esq. Ronald J. Frappier, Esq.
Cleary, Gottlieb, Steen Jenkens & Gilchrist
& Hamilton A Professional Corporation
One Liberty Plaza 1445 Ross Avenue
New York, New York 10006 Suite 3200
(212) 225-2000 Dallas, Texas 75202
(214) 855-4500
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED PER UNIT OFFERING PRICE(1) FEE(2)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Notes due June 1, 2005. $500,000,000 100% $500,000,000 $172,414
- ---------------------------------------------------------------------------------------------
Notes due June 1, 2000. $200,000,000 100% $200,000,000 $ 68,966
- ---------------------------------------------------------------------------------------------
Notes due June 1, 2025. $300,000,000 100% $300,000,000 $103,448
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(f)(1) and (3) under the Securities Act of 1933, as
amended, each amount in this column is the market value of the maximum
amount of the specified issue of Notes to be received by the Registrant
from tendering holders, less the estimated amount of cash to be paid by
the Registrant to tendering holders, pursuant to the exchange offers
described herein. The market values are based on market prices as of April
25, 1995.
(2) The registration fee has been computed pursuant to Rule 457(f) under the
Securities Act of 1933, as amended.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501 OF REGULATION S-K SHOWING LOCATION
IN PROSPECTUS OF INFORMATION REQUIRED BY ITEMS OF FORM S-4
<TABLE>
<CAPTION>
S-4 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROSPECTUS
--------------------------- ---------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and
Outside Front Cover of Prospectus..... Facing Page; Cross Reference
Sheet; Outside Front Cover Page.
2. Inside Front and Outside Back Cover
Pages................................. Inside Front and Outside Back
Cover Pages; Available
Information; Incorporation of
Certain Documents by Reference;
Table of Contents.
3. Risk Factors, Ratio of Earnings to
Fixed Charges and Other Information... Prospectus Summary; Investment
Considerations; Supplemental
Selected Financial Data--The
Company; Selected Financial
Data--The Company; Selected
Financial Data--Healthtrust; The
Company; Recent Developments.
4. Terms of the Transaction............... Outside Front Cover Page;
Prospectus Summary; Investment
Considerations; The Exchange
Offers; The Consent
Solicitation; The Proposed
Amendments; Description of New
Securities; Certain Federal
Income Tax Considerations.
5. Pro Forma Financial Information........ Not Applicable.
6. Material Contacts With the Company
Being Acquired........................ Recent Developments.
7. Additional Information Required for
Reoffering by Persons and Parties
Deemed to be Underwriters............. Not Applicable.
8. Interests of Named Experts and Counsel. Legal Matters.
9. Disclosure of Commission Position on
Indemnification For Securities Act
Liabilities........................... Not Applicable.
10. Information with Respect to S-3
Registrants........................... The Company; Recent Developments.
11. Incorporation of Certain Information by
Reference............................. Incorporation of Certain
Documents by Reference.
12. Information with Respect to S-2 or S-3
Registrants........................... Not Applicable.
13. Incorporation of Certain Information by
Reference............................. Not Applicable.
14. Information with Respect to Registrants
Other than S-2 or S-3 Registrants..... Not Applicable.
15. Information with Respect to S-3
Companies............................. Not Applicable.
16. Information with Respect to S-2 or S-3
Companies............................. Not Applicable.
17. Information with Respect to Companies
Other than S-2 or S-3 Companies....... Not Applicable.
18. Information if Proxies, Consents or
Authorizations are to be Solicited.... Prospectus Summary; The Exchange
Offers.
19. Information if Proxies, Consents or
Authorizations are not to be
Solicited, or in an Exchange Offer.... Not Applicable.
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMISSION BUT HAS NOT YET BECOME EFFECTIVE. +
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THESE +
+SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE +
+TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS AND +
+CONSENT SOLICITATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE +
+SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY COPY--SUBJECT TO COMPLETION DATED APRIL 28, 1995
PROSPECTUS AND CONSENT SOLICITATION
$1,000,000,000
COLUMBIA/HCA HEALTHCARE CORPORATION
OFFER TO EXCHANGE
$500,000,000 NOTES OF COLUMBIA/HCA HEALTHCARE CORPORATION DUE JUNE 1, 2005
FOR ANY AND ALL
10 3/4% SUBORDINATED NOTES OF HEALTHTRUST, INC.--THE HOSPITAL COMPANY DUE 2002
AND
$200,000,000 NOTES OF COLUMBIA/HCA HEALTHCARE CORPORATION DUE JUNE 1, 2000
FOR ANY AND ALL
10 1/4% SUBORDINATED NOTES OF HEALTHTRUST, INC.--THE HOSPITAL COMPANY DUE 2004
AND
$300,000,000 NOTES OF COLUMBIA/HCA HEALTHCARE CORPORATION DUE JUNE 1, 2025
FOR ANY AND ALL
8 3/4% SUBORDINATED DEBENTURES OF HEALTHTRUST, INC.--THE HOSPITAL COMPANY DUE
2005
AND
CONSENT SOLICITATION
Columbia/HCA Healthcare Corporation (the "Company") hereby offers, upon the
terms and subject to the conditions set forth in this Prospectus and Consent
Solicitation (together, the "Prospectus") and the accompanying Letters of
Transmittal and Consent (each a "Letter of Transmittal"), to exchange (i)
$1,000 principal amount of the Company's Notes due June 1, 2005 (the "New 2005
Notes") plus an amount of cash based on a fixed spread pricing formula
described herein, for each $1,000 principal amount of 10 3/4% Subordinated
Notes of Healthtrust, Inc.--The Hospital Company ("Healthtrust") due 2002 (the
"Old 10 3/4% Notes") properly tendered, (ii) $1,000 principal amount of the
Company's Notes due June 1, 2000 (the "New 2000 Notes") plus an amount of cash
based on a fixed spread pricing formula described herein, for each $1,000
principal amount of 10 1/4% Subordinated Notes of Healthtrust due 2004 (the
"Old 10 1/4% Notes") properly tendered and (iii) $1,000 principal amount of the
Company's Notes due June 1, 2025 (the "New 2025 Notes") plus an amount of cash
based on a fixed spread pricing formula described herein, for each $1,000
principal amount of 8 3/4% Subordinated Debentures of Healthtrust due 2005 (the
"Old 8 3/4% Debentures") properly tendered (each such offer being referred to
herein individually as an "Exchange Offer" and collectively as the "Exchange
Offers"). The Old 10 3/4% Notes, Old 10 1/4% Notes and Old 8 3/4% Debentures
are referred to collectively herein as the "Old Securities"; the New 2005
Notes, New 2000 Notes and New 2025 Notes are referred to collectively herein as
the "New Securities." The New Securities, unlike the Old Securities which are
subordinated to senior indebtedness of the Company and Healthtrust, will be
unsubordinated senior obligations of the Company and will rank pari passu with
all existing and future unsecured and unsubordinated senior indebtedness of the
Company.
cover page continued
- -------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE ON , 1995, UNLESS EXTENDED (THE "EXPIRATION
DATE"), AT 11:59 P.M., NEW YORK CITY TIME. OLD SECURITIES TENDERED FOR EXCHANGE
MAY BE WITHDRAWN AT ANY TIME PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
- -------------------------------------------------------------------------------
SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD
BE CONSIDERED IN EVALUATING THE EXCHANGE OFFERS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS AND CONSENT SOLICITATION. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
For further information relating to the Exchange Offers, please call the
Information Agent or the Dealer Manager at the telephone numbers set forth on
the back cover page hereof. To obtain copies of this Prospectus, please contact
the Information Agent.
The Dealer Manager for the Exchange Offers is:
----------------------
SALOMON BROTHERS INC
-------------------------------------------------------------------------
The date of this Prospectus is , 1995.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE DEALER MANAGER.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the New Securities
offered hereby (together with all amendments thereto, the "Registration
Statement"). This Prospectus does not contain all of the information set forth
in the Registration Statement and the exhibits and schedules thereto. For
further information with respect to the Company, Healthtrust and the New
Securities, reference is made to the Registration Statement and the exhibits
and schedules thereto. Statements contained in this Prospectus as to the
contents of any document filed with, or incorporated by reference in, the
Registration Statement are not necessarily complete, and in each instance
reference is made to the copy of such document filed with, or incorporated by
reference in, the Registration Statement, and each such statement is qualified
in all respects by such reference.
The Company and Healthtrust are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, file reports, proxy statements and other information
with the Commission.
The Registration Statement, and exhibits thereto, and the proxy statements
and reports of the Company and Healthtrust can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and Seven World Trade Center, 13th Floor, New
York, New York 10048. Copies of such materials can be obtained by mail from
the public reference section of the Commission at its office at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Certain securities of the Company and Healthtrust are listed on the New York
Stock Exchange and reports, proxy statements and other information concerning
the Company and Healthtrust can be inspected at the office of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed or to be filed by the Company with
the Commission pursuant to the Exchange Act are incorporated herein by
reference and shall be deemed a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
(b) The Company's Current Reports on Form 8-K dated February 21, 1995 and
April 24, 1995; and
(c) All other reports filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby.
The following documents heretofore filed or to be filed by Healthtrust with
the Commission pursuant to the Exchange Act are incorporated herein by
reference and shall be deemed a part hereof:
(a) Healthtrust's Annual Report on Form 10-K for the fiscal year ended
August 31, 1994;
i
<PAGE>
(b) Healthtrust's Quarterly Reports on Form 10-Q for the interim periods
ended November 30, 1994 and February 28, 1995;
(c) Healthtrust's Current Report on Form 8-K dated October 4, 1994; and
(d) All other reports filed by Healthtrust pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein, or in any other subsequently filed document that also is incorporated
or deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Subject to the foregoing, all information appearing in this Prospectus is
qualified in its entirety by the information appearing in the documents
incorporated herein by reference.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WITH RESPECT TO THE
COMPANY AND HEALTHTRUST THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.
THESE DOCUMENTS ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST TO STEPHEN T. BRAUN,
ESQ., SENIOR VICE PRESIDENT AND GENERAL COUNSEL, COLUMBIA/HCA HEALTHCARE
CORPORATION, 201 WEST MAIN STREET, LOUISVILLE, KENTUCKY 40202 OR BY TELEPHONE
AT (502) 572-2000. TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY SUCH
REQUEST SHOULD BE MADE BY [DATE FIVE DAYS BEFORE EXPIRATION DATE].
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION..................................................... i
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................... i
PROSPECTUS SUMMARY........................................................ 1
SUPPLEMENTAL SELECTED FINANCIAL DATA--THE COMPANY......................... 14
SELECTED FINANCIAL DATA--THE COMPANY...................................... 16
SELECTED FINANCIAL DATA--HEALTHTRUST...................................... 17
INVESTMENT CONSIDERATIONS................................................. 18
THE COMPANY............................................................... 20
HEALTHTRUST............................................................... 20
RECENT DEVELOPMENTS....................................................... 21
THE EXCHANGE OFFERS....................................................... 22
Terms of the Exchange Offers............................................ 22
The New Securities...................................................... 26
The Consent Solicitation................................................ 26
Calculations; Information............................................... 26
Dealer Manager Market Activity.......................................... 27
Expiration Date; Extensions; Termination; Amendments.................... 27
Effect of Tender........................................................ 28
Dissenters' Rights...................................................... 28
Acceptance of Old Securities Tendered for Exchange; Delivery of New
Securities............................................................. 28
Procedures for Tendering Old Securities and Giving Consents............. 29
Proper Execution and Delivery of Letters of Transmittal................. 30
Conditions to the Exchange Offers....................................... 32
Withdrawal and Revocation Rights........................................ 33
Future Offers........................................................... 34
Transfer Taxes.......................................................... 34
Exchange Agent.......................................................... 34
Information Agent....................................................... 34
Dealer Manager.......................................................... 35
MARKET AND TRADING INFORMATION............................................ 36
ACCOUNTING TREATMENT OF THE EXCHANGE OFFERS............................... 37
THE CONSENT SOLICITATION.................................................. 37
THE PROPOSED AMENDMENTS................................................... 39
DESCRIPTION OF NEW SECURITIES............................................. 48
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS................................. 56
LEGAL MATTERS............................................................. 58
EXPERTS................................................................... 58
</TABLE>
iii
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere, or
incorporated by reference, in this Prospectus. See "Investment Considerations"
for a discussion of certain factors that should be considered in connection
with the Exchange Offers and Solicitation.
THE COMPANY
Columbia/HCA Healthcare Corporation (the "Company") is one of the largest
health care services companies in the United States. At April 24, 1995, the
Company operated 292 general, acute care hospitals and 28 psychiatric hospitals
in 38 states and two foreign countries. In addition, as part of its
comprehensive health care networks, the Company operates facilities that
provide a broad range of outpatient and ancillary services. At April 24, 1995,
the Company operated more than 125 outpatient centers.
The Company was incorporated in Nevada in January 1990 and reincorporated in
Delaware in September 1993. The Company's principal executive offices are
located at One Park Plaza, Nashville, Tennessee 37203, and its telephone number
at such address is (615) 327-9551.
HEALTHTRUST
Healthtrust, Inc.--The Hospital Company ("Healthtrust") is one of the largest
providers of health care services in the United States, delivering a full range
of inpatient, outpatient and other health care services principally through its
affiliated hospitals. At March 31, 1995, Healthtrust operated 117 acute care
hospitals, all of which were owned or leased by Healthtrust through its
subsidiaries or joint venture arrangements. Healthtrust was also an investor,
through joint ventures, in four other acute care hospitals.
Healthtrust was incorporated in Delaware in April 1985. Healthtrust's
principal executive offices are located at 4525 Harding Road, Nashville,
Tennessee 37205, and its telephone number at such location is (615) 383-4444.
THE HEALTHTRUST ACQUISITION
On April 24, 1995, a wholly-owned subsidiary of the Company merged with and
into Healthtrust (as used herein the term "Healthtrust" refers to either the
pre-merger Healthtrust or the post-merger Healthtrust as the context requires).
Each stockholder of Healthtrust received for each share of Healthtrust common
stock owned as of the effective time of the merger 0.88 of a share of the
Company's common stock. The Company has assumed all of Healthtrust's
obligations under, and has become a co-obligor with Healthtrust with respect
to, the Old Securities. The Old Securities are subordinated to senior
indebtedness of Healthtrust and the Company.
THE EXCHANGE OFFERS AND SOLICITATION
THE EXCHANGE OFFERS: Pursuant to the Exchange Offers, the Company is
offering to exchange, for any and all of certain
outstanding debt securities of Healthtrust, an
equal principal amount of certain newly issued debt
securities of the Company plus an amount of cash
based on the fixed spread pricing formulas
described herein.
1
<PAGE>
Specifically, subject to the terms of the Exchange
Offers, the Company is offering to exchange:
(i) $1,000 principal amount of the Company's Notes
due June 1, 2005 (the "New 2005 Notes") plus
an amount of cash based on the relevant fixed
spread pricing formula, for each $1,000
principal amount of Healthtrust's 10 3/4%
Subordinated Notes due 2002 (the "Old 10 3/4%
Notes"),
(ii) $1,000 principal amount of the Company's Notes
due June 1, 2000 (the "New 2000 Notes") plus
an amount of cash based on the relevant fixed
spread pricing formula, for each $1,000
principal amount of Healthtrust's 10 1/4%
Subordinated Notes due 2004 (the "Old 10 1/4%
Notes"), and
(iii) $1,000 principal amount of the Company's
Notes due June 1, 2025 (the "New 2025 Notes")
plus an amount of cash based on the relevant
fixed spread pricing formula, for each $1,000
principal amount of Healthtrust's 8 3/4%
Subordinated Debentures due 2005 (the "Old 8
3/4% Debentures").
The Old 10 3/4% Notes, Old 10 1/4% Notes and Old 8
3/4% Debentures are referred to collectively herein
as the "Old Securities"; the New 2005 Notes, New
2000 Notes and New 2025 Notes are referred to
collectively herein as the "New Securities."
For each issue of Old Securities, a price that
includes accrued but unpaid interest to the
Exchange Date (a "Reference Total Price") will be
determined using the specified fixed spread pricing
formula for such issue. Such Reference Total Price
will be based on a yield (a "Reference Yield") to a
specified redemption date for such issue equal to
(i) the yield (the "Benchmark Treasury Yield") on a
specified U.S. Treasury Security for such issue (a
"Benchmark Treasury Security"), plus (ii) a
specified number of basis points for such issue.
For each issue of New Securities, an interest rate
will be determined, equal to (i) the yield on a
specified Benchmark Treasury Security for such
issue, plus (ii) a specified number of basis points
for such issue. For each $1,000 principal amount of
Old Securities accepted by the Company, a holder
will receive $1,000 principal amount of the
corresponding issue of New Securities and an amount
in cash equal to the amount by which the Reference
Total Price for the tendered Old Securities exceeds
$1,000. Reference Total Prices and interest rates
on the New Securities will be determined based on
the Benchmark Treasury Yields as of 4:00 p.m., New
York City time, on the second business day prior to
the Expiration Date (the "Pricing Time").
Because the Reference Total Price is based on a
fixed spread pricing formula linked to a Benchmark
Treasury Yield, the amount of cash that will be
received by a tendering holder in the event an
Exchange Offer is consummated will be affected by
changes in the applicable Benchmark Treasury Yield
during the
2
<PAGE>
term of the Exchange Offer. Similarly, because the
interest rate on each issue of New Securities is
linked to a Benchmark Treasury Yield, the actual
interest rate that would be realized by a tendering
holder will be affected by changes in the
applicable Benchmark Treasury Yield during the term
of the Exchange Offer. See "The Exchange Offers--
Terms of the Exchange Offers."
The New Securities will be unsecured obligations of
the Company. Unlike the Old Securities which are
subordinated to senior indebtedness of Healthtrust
and the Company, the New Securities will be
unsubordinated senior obligations of the Company
and will rank pari passu with all existing and
future unsecured and unsubordinated senior
indebtedness of the Company. The covenants that
will apply to the Company and its subsidiaries
pursuant to the New Securities will be consistent
with those that currently apply to the Company and
its subsidiaries pursuant to the Company's existing
debt securities. See "Description of New
Securities."
CONSIDERATION FOR OLD 10
3/4% NOTES: In exchange for each $1,000 principal amount of Old
10 3/4% Notes accepted by the Company, a holder
will receive $1,000 principal amount of New 2005
Notes and an amount of cash equal to the amount by
which the Reference Total Price for the Old 10 3/4%
Notes exceeds $1,000. The Reference Total Price for
the Old 10 3/4% Notes will be based on a Reference
Yield to the first optional redemption date for
such notes (May 1, 1997) equal to the sum of (i)
the yield on the 6 1/2% U.S. Treasury Note due
April 30, 1997, as of the Pricing Time, plus
(ii) %.
The per annum interest rate on the New 2005 Notes
will equal the sum of (i) the yield on the 7 1/2%
U.S. Treasury Note due February 15, 2005, as of the
Pricing Time, plus (ii) %. See "The Exchange
Offers--Terms of the Exchange Offers--Exchange
Offer for Old 10 3/4% Notes."
CONSIDERATION FOR OLD 10
1/4% NOTES: In exchange for each $1,000 principal amount of Old
10 1/4% Notes accepted by the Company, a holder
will receive $1,000 principal amount of New 2000
Notes and an amount of cash equal to the amount by
which the Reference Total Price for the Old 10 1/4%
Notes exceeds $1,000. The Reference Total Price for
the Old 10 1/4% Notes will be based on a Reference
Yield to the first optional redemption date for
such notes (April 15, 1999) equal to the sum of (i)
the yield on the 7% U.S. Treasury Note due April
15, 1999, as of the Pricing Time, plus (ii) %.
The per annum interest rate on the New 2000 Notes
will equal the sum of (i) the yield on the 6 3/4%
U.S. Treasury Note due April 30, 2000, as of the
Pricing Time, plus (ii) %. See "The Exchange
Offers--Terms of the Exchange Offers--Exchange
Offer for Old 10 1/4% Notes."
3
<PAGE>
CONSIDERATION FOR OLD 8
3/4% DEBENTURES: In exchange for each $1,000 principal amount of Old
8 3/4% Debentures accepted by the Company, a holder
will receive $1,000 principal amount of New 2025
Notes and an amount of cash equal to the amount by
which the Reference Total Price for the Old 8 3/4%
Debentures exceeds $1,000. The Reference Total
Price for the Old 8 3/4% Debentures will be based
on a Reference Yield to the first date at which
such debentures may be redeemed at par (March 15,
2001) equal to the sum of (i) the yield on the 7
3/4% U.S. Treasury Note due February 15, 2001, as
of the Pricing Time, plus (ii) %.
The per annum interest rate on the New 2025 Notes
will equal the sum of (i) the yield on the 7 1/2%
U.S. Treasury Note due November 15, 2024, as of the
Pricing Time, plus (ii) %. See "The Exchange
Offers--Terms of the Exchange Offers--Exchange
Offer for Old 8 3/4% Debentures."
CALCULATIONS: The Reference Total Price for each issue of Old
Securities will be determined using the methodology
set forth in Schedule A hereto. An example of the
application of such methodology is provided for
each issue of Old Securities in Schedule B hereto.
The Exchange Date will be used as the settlement
date for all such calculations. Each Benchmark
Treasury Yield will be based on the bid price for
the relevant Benchmark Treasury Security as
displayed on the Garban Limited Quotation Screens
for U.S. Government Securities as of the Pricing
Time. See "The Exchange Offers--Calculations;
Information."
INFORMATION: Any questions concerning the terms of the Exchange
Offers should be directed to the Liability
Management Group at the Dealer Manager at (800)
558-3745 (toll free) or (212) 783-3738 (call
collect). The Dealer Manager intends to publish the
terms of the Exchange Offers, including the final
Reference Total Prices for the Old Securities and
the final interest rates on the New Securities when
available, on MCM "CORPORATEWATCH" Service on
Telerate page 41962 and on Bloomberg under "Company
News."
During the term of the Exchange Offers, current
information regarding Benchmark Treasury Yields,
Reference Yields, Reference Total Prices and
interest rates on the New Securities may be
obtained from the Liability Management Group at the
Dealer Manager at the toll free number listed
above. Questions concerning tender procedures and
requests for additional copies of this Prospectus
should be directed to the Information Agent. See
"The Exchange Offers--Calculations; Information."
CONSENT SOLICITATION: Concurrently with the Exchange Offers, the Company
is soliciting (the "Solicitation") consents
("Consents") from holders of each issue of Old
Securities to certain amendments to the indenture
governing such issue of Old Securities.
4
<PAGE>
Prior to the announcement of the acquisition of
Healthtrust by the Company, the Old Securities were
rated below investment grade at B1 by Moody's
Investors Service, Inc. ("Moody's") and B by
Standard & Poor's Corporation ("S&P"). In connection
with the Company's acquisition of Healthtrust, the
Company, whose debt securities as of the date hereof
are rated investment grade at A3 by Moody's and BBB+
by S&P, has become a co-obligor with Healthtrust (in
such capacity, each an "Obligor") with respect to
the Old Securities. As of the date hereof, each of
Moody's and S&P has raised its rating with respect
to the Old Securities to investment grade at Baa1 by
Moody's and BBB by S&P. Pursuant to the
Solicitation, the Company is proposing parallel
amendments (the "Proposed Amendments") to the
indentures under which the Old Securities were
issued in order to make the covenants and certain
other terms in such indentures consistent with those
that currently apply to the Company and its
subsidiaries with respect to the Company's existing
debt securities and that will apply to the Company
and its subsidiaries with respect to the New
Securities. See "The Consent Solicitation."
The Proposed Amendments contemplated by the
Solicitation would, among other things, eliminate
the covenants in each of the indentures that
restrict the incurrence of Indebtedness and the
making of Restricted Payments (as each such term is
defined in the indentures) by an Obligor and its
subsidiaries and would replace those covenants with
covenants (i) limiting the ability of an Obligor and
certain of its subsidiaries to mortgage or pledge,
or engage in sale and lease-back transactions with
respect to, certain hospital properties and (ii)
restricting the issuance of preferred stock and the
incurrence of indebtedness by certain subsidiaries
of an Obligor. In addition, the Proposed Amendments
would (i) make the provisions in each indenture that
govern consolidations, mergers and asset sales by an
Obligor less restrictive and (ii) eliminate the
provisions that require that, in the event of a
Change of Control and a Rating Decline (as each such
term is defined in the indentures), the Old
Securities be repurchased at par at the option of
holders.
Consents from holders of a majority in principal
amount outstanding of an issue of Old Securities
(the "Requisite Consents") must be received in order
to adopt the Proposed Amendments to the relevant
indenture with respect to such issue of Old
Securities. The Proposed Amendments will be adopted
with respect to a particular issue of Old Securities
only upon consummation of the Exchange Offer with
respect to such issue. If the Proposed Amendments
are adopted with respect to a particular issue of
Old Securities then each non-exchanging holder of
such issue will be bound by the Proposed Amendments
even though such holder did not consent to the
Proposed Amendments. See "The Consent Solicitation",
"Investment Considerations" and "The Proposed
Amendments."
5
<PAGE>
HOLDERS OF OLD SECURITIES WHO TENDER INTO AN
EXCHANGE OFFER WILL BE REQUIRED, AS A CONDITION TO
A VALID TENDER, TO HAVE GIVEN THEIR CONSENT TO THE
PROPOSED AMENDMENTS CONTEMPLATED BY THE
SOLICITATION. THE PROPER COMPLETION, EXECUTION AND
DELIVERY OF A LETTER OF TRANSMITTAL WITH RESPECT TO
PARTICULAR OLD SECURITIES WILL CONSTITUTE THE
DELIVERY OF A CONSENT WITH RESPECT TO SUCH OLD
SECURITIES. WITHDRAWAL OF OLD SECURITIES WILL BE
DEEMED A REVOCATION OF THE CONSENT TO WHICH SUCH
OLD SECURITIES RELATE. CONSENTS WILL BE IRREVOCABLE
AS OF THE EXPIRATION OF THE RELEVANT EXCHANGE
OFFER.
CONSENT PAYMENT: The Company will not make a separate payment for
Consents delivered in the Solicitation.
OLD SECURITIES OUTSTANDING: As of the date hereof, there are $500,000,000
aggregate principal amount of Old 10 3/4% Notes
outstanding, $200,000,000 aggregate principal
amount of Old 10 1/4% Notes outstanding and
$300,000,000 aggregate principal amount of Old 8
3/4% Debentures outstanding.
CONDITIONS TO THE
EXCHANGE OFFERS: Consummation of each Exchange Offer is conditioned
upon, among other things, receipt of the Requisite
Consents with respect to all three issues of Old
Securities. The Company may, in its sole
discretion, waive any condition with respect to an
Exchange Offer and accept for exchange any Old
Securities tendered. See "The Exchange Offers--
Conditions to the Exchange Offers."
EXPIRATION AND Each Exchange Offer will expire at 11:59 p.m., New
AMENDMENTS: York City time, on , , 1995 or at any later
time and date to which the Exchange Offers or any
of them may be extended by the Company in
accordance with the procedures described herein.
The date on which an Exchange Offer expires is
referred to herein as the "Expiration Date."
If the consideration offered with respect to any
Exchange Offer is changed, such Exchange Offer will
remain open at least ten business days from the
date public notice of such change is given.
However, in the event the Company has not received
the Requisite Consents with respect to an issue of
Old Securities as of 11:59 p.m., New York City
time, on the Expiration Date, the Company may
extend the relevant Exchange Offer for a period of
less than ten business days, but not less than two
business days, and redetermine the Reference Total
Price with respect to such issue of Old Securities
and the interest rate on the corresponding issue of
New Securities using the relevant Benchmark
Treasury Yields as of 4:00 p.m., New York City
time, on the second business day prior to such
extended Expiration Date. However, no such
extension of less than ten business days
6
<PAGE>
will occur unless the value of the total
consideration (cash plus the value of the New
Securities) to be received by a tendering holder
increases as a result of the redetermination
described above. See "The Exchange Offers--
Expiration Date; Extensions; Termination;
Amendments."
CERTAIN FEDERAL INCOME
TAX CONSIDERATIONS: The exchange of securities pursuant to the Exchange
Offers (the "Exchange") will constitute a
recapitalization for U.S. federal income tax
purposes. As a result, a holder of Old Securities
that tenders in an Exchange Offer generally will
recognize gain, if any, on the Exchange only to the
extent of the cash received by such holder pursuant
to the Exchange. No loss recognition will be
permitted in respect of the Exchange. See "Certain
Federal Income Tax Considerations."
CERTAIN CONSEQUENCES TO
HOLDERS TENDERING IN THE
EXCHANGE OFFERS:
Holders whose Old Securities are accepted by the
Company in an Exchange Offer will receive New
Securities. Unlike the Old Securities on which both
the Company and Healthtrust are obligors, the
Company will be the only obligor on the New
Securities. Unlike the Old Securities which are
subordinated to senior indebtedness of Healthtrust
and the Company, the New Securities will be
unsubordinated senior obligations of the Company.
The covenants and certain other terms of the New
Securities will be consistent with those that
currently apply to the Company and its subsidiaries
pursuant to the Company's existing debt securities.
Although such covenants and terms will be
substantially less restrictive than those that
currently apply to the Company and its subsidiaries
pursuant to the Old Securities, they will be
consistent with those that will apply pursuant to
an issue of Old Securities if the Proposed
Amendments are adopted with respect to such issue.
The Company does not intend to list the New
Securities on any securities exchange. The Dealer
Manager currently plans to make a market in the New
Securities; however, there can be no assurance that
the Dealer Manager will make such a market or that
any active market in the New Securities will
develop or be maintained. See "Investment
Considerations."
CERTAIN CONSEQUENCES TO
HOLDERS NOT TENDERING IN
THE EXCHANGE OFFERS: Holders who do not tender pursuant to the Exchange
Offers will retain their Old Securities. Unlike the
New Securities which would be unsubordinated senior
obligations of the Company, the Old Securities are
subordinated to senior indebtedness of Healthtrust
and the Company. If the Proposed Amendments are
adopted with respect to an issue of Old Securities,
certain covenants and other terms will be modified
or eliminated entirely. The resulting covenants and
terms will be substantially less restrictive than
those currently applicable to the Old Securities.
7
<PAGE>
In the event an Exchange Offer is consummated, the
existing trading market for the subject Old
Securities may become less liquid due to the
reduction in the amount of such Old Securities
outstanding after the Exchange Offer. In addition,
the Company may delist the Old 10 3/4% Notes and
the Old 8 3/4% Debentures, which currently are
listed on the New York Stock Exchange (the "NYSE").
See "Investment Considerations."
TENDER OF OLD SECURITIES
AND DELIVERY OF The GREEN Letter of Transmittal must be used to
CONSENTS: tender Old 10 3/4% Notes. The YELLOW Letter of
Transmittal must be used to tender Old 10 1/4%
Notes. The BLUE Letter of Transmittal must be used
to tender Old 8 3/4% Debentures.
To tender Old Securities, a holder must deliver his
or her Old Securities together with a properly
completed and executed Letter of Transmittal to the
Exchange Agent. If Old Securities are held by a
custodian or other intermediary, to tender such Old
Securities the beneficial owner must instruct his
or her custodian or other intermediary to tender
such Old Securities on his or her behalf. All
tenders must be made by 11:59 p.m., New York City
time, on the Expiration Date. See "The Exchange
Offers--Procedures for Tendering Old Securities and
Giving Consents."
THE PROPER COMPLETION, EXECUTION AND DELIVERY OF A
LETTER OF TRANSMITTAL WITH RESPECT TO PARTICULAR
OLD SECURITIES WILL CONSTITUTE THE GIVING OF A
CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT TO
SUCH OLD SECURITIES.
All New Securities will be delivered only in book-
entry form through The Depository Trust Company
("DTC"). Accordingly, holders who anticipate
tendering and whose Old Securities are not held
custodially through DTC are urged to contact
promptly a bank, broker or other intermediary that
has the capability to hold securities custodially
through DTC, to arrange for receipt of any New
Securities delivered pursuant to the Exchange
Offers and to obtain the information necessary to
provide the required account information on the
relevant Letter of Transmittal.
GUARANTEED DELIVERY: No guaranteed delivery procedures are available
with respect to the Exchange Offers.
ACCEPTANCE OF OLD
SECURITIES AND DELIVERY
OF NEW SECURITIES: Subject to satisfaction or waiver of the conditions
to an Exchange Offer, the Company will exchange
(and thereby purchase) any and all Old Securities
that are properly tendered in such Exchange Offer
and not withdrawn. New Securities will be issued
only in book-entry form through DTC. New Securities
will be delivered and cash payments will be made by
check (in New York next day funds) on the fifth
business day following the Expiration Date (the
"Exchange Date"). See "The Exchange Offers--
Acceptance of Old Securities Tendered for Exchange;
Delivery of New Securities."
8
<PAGE>
WITHDRAWAL AND REVOCATION
RIGHTS: Tenders of Old Securities may be withdrawn at any
time prior to 11:59 p.m., New York City time, on
the Expiration Date. Withdrawal of tendered Old
Securities will be deemed a rejection of the
Exchange Offer and a revocation of the Consent with
respect to such Old Securities. See "The Exchange
Offers--Withdrawal and Revocation Rights."
NO DISSENTERS' RIGHTS: Holders of Old Securities do not have any appraisal
or dissenters' rights under the Delaware General
Corporation Law or the indentures under which the
Old Securities were issued. See "The Exchange
Offers--Terms of the Exchange Offers--Dissenters'
Rights."
DEALER MANAGER MARKET
ACTIVITY: The Dealer Manager currently plans to make a market
in the New Securities following the completion of
the Exchange Offers and may buy and sell New
Securities on a "when and if issued" basis prior to
the completion of the Exchange Offers. However,
there can be no assurance that the Dealer Manager
will engage in such activities or that any active
market in the New Securities will develop or be
maintained. See "Investment Considerations."
EXCHANGE AGENT: Chemical Bank, 55 Water Street, Second Floor--Room
234, New York, New York 10041. Attention:
Reorganization Department.
DEALER MANAGER: Salomon Brothers Inc, Seven World Trade Center, New
York, New York 10048. Telephone: (800) 558-3745
(toll free); (212) 783-3738 (call collect).
Attention: Liability Management Group.
INFORMATION AGENT: D.F. King & Co., Inc., 77 Water Street, New York,
New York 10005. Telephone: (800) 829-6554 (toll
free).
9
<PAGE>
THE NEW SECURITIES
NEW SECURITIES GENERALLY
Issuer: Columbia/HCA Healthcare Corporation.
Indenture: The New Securities will be issued under an indenture
dated as of December 15, 1993 (the "Company
Indenture"), between the Company and The First National
Bank of Chicago, as trustee (the "New Trustee").
Interest: Interest will accrue on the New Securities from the
Exchange Date. Interest will be paid each June 1 and
December 1, commencing December 1, 1995.
Rating: As of the date hereof, the Company's debt securities
are rated A3 by Moody's and BBB+ by S&P. The Company
expects that the New Securities will receive similar
ratings. However, the ratings given the New Securities
should be evaluated independently from similar ratings
on other types of securities. A security rating is not
a recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time by
the assigning rating agency.
Ranking: The New Securities will be unsecured obligations of the
Company. Unlike the Old Securities which are
subordinated to senior indebtedness of Healthtrust and
the Company, the New Securities will be unsubordinated
senior obligations of the Company and will rank pari
passu with all existing and future unsecured and
unsubordinated indebtedness of the Company.
Form: New Securities will be available only in book-entry
form through DTC.
Optional Redemption: Unlike the Old Securities, New Securities may not be
redeemed by the Company prior to the maturity thereof.
Covenants: The Company Indenture limits, among other things, the
ability of the Company and certain of its subsidiaries
to mortgage or pledge, or engage in sale and lease-back
transactions with respect to, certain hospital
properties, and the ability of certain subsidiaries of
the Company to issue preferred stock and incur
indebtedness. The restrictive covenants with respect to
the New Securities are substantially less restrictive
than the covenants currently applicable to the Old
Securities. The Company Indenture does not require the
Company to make an offer to repurchase the New
Securities in the event of a change of control of the
Company.
Use of Proceeds: The New Securities will be issued only in exchange for
the Old Securities. The Company will not receive any
cash proceeds from the issuance of the New Securities.
10
<PAGE>
NEW 2005 NOTES
Principal Amount Offered: $500,000,000.
Maturity Date: June 1, 2005.
Interest Rate: Equal to the sum of (i) the yield on the 7 1/2% U.S.
Treasury Note due February 15, 2005, as of the
Pricing Time, plus (ii) %, per annum.
NEW 2000 NOTES
Principal Amount Offered: $200,000,000.
Maturity Date: June 1, 2000.
Interest Rate: Equal to the sum of (i) the yield on the 6 3/4% U.S.
Treasury Note due April 30, 2000, as of the Pricing
Time, plus (ii) %, per annum.
NEW 2025 NOTES
Principal Amount Offered: $300,000,000.
Maturity Date: June 1, 2025.
Interest Rate: Equal to the sum of (i) the yield on the 7 1/2% U.S.
Treasury Note due November 15, 2024, as of the
Pricing Time, plus (ii) %, per annum.
11
<PAGE>
COMPARISON OF OLD SECURITIES AND NEW SECURITIES
What follows is a brief comparison of the principal features of the Old
Securities and the New Securities. The description of the Old Securities
reflects the Old Securities as currently constituted and does not reflect any
changes to the terms and covenants of the Old Securities that may be effected
pursuant to the Solicitation. The following descriptions are brief summaries,
do not purport to be complete and are qualified in their entirety by reference,
with respect to the Old Securities, to the Old Securities and the indentures
under which the Old Securities were issued and, with respect to the New
Securities, to the Company Indenture. For further information regarding the Old
Securities and for definitions of capitalized terms used with respect to the
Old Securities but not heretofore defined, see "The Proposed Amendments." For
further information regarding the New Securities and for definitions of
capitalized terms used with respect to the New Securities but not heretofore
defined, see "Description of New Securities."
<TABLE>
<CAPTION>
OLD SECURITIES NEW SECURITIES
-------------- --------------
<S> <C> <C>
OBLIGOR(S): The Company and Healthtrust. The Company.
TRUSTEE: The First National Bank of The First National Bank of
Boston. Chicago.
AGGREGATE PRINCIPAL Old 10 3/4% Notes: New 2005 Notes: up to
AMOUNT: $500,000,000. $500,000,000.
Old 10 1/4% Notes: New 2000 Notes: up to
$200,000,000. $200,000,000.
Old 8 3/4% Debentures: New 2025 Notes: up to
$300,000,000. $300,000,000.
MATURITY: Old 10 3/4% Notes: May 1, 2002. New 2005 Notes: June 1,
2005.
Old 10 1/4% Notes: April 15, New 2000 Notes: June 1,
2004. 2000.
Old 8 3/4% Debentures: March New 2025 Notes: June 1,
15, 2005. 2025.
INTEREST RATE: Old 10 3/4% Notes: 10 3/4%, The interest rate on each
per annum. issue of New Securities will
Old 10 1/4% Notes: 10 1/4%, be set pursuant to the
per annum. applicable formula described
Old 8 3/4% Debentures: 8 3/4%, herein. Interest will accrue
per annum. on the New Securities from
the Exchange Date.
RATING: As of the date hereof, the Old As of the date hereof, the
Securities are rated Baa1 by Company's debt securities
Moody's and BBB by S&P. are rated A3 by Moody's and
BBB+ by S&P. The Company
expects that the New
Securities will receive
similar ratings.
REDEMPTION: The Old 10 3/4% Notes are The New Securities are not
redeemable at any time on or redeemable prior to
after May 1, 1997 at a maturity.
redemption price of 104%
declining annually to par on
May 1, 1999. The Old 10 1/4%
Notes are redeemable at any
time on or after April 15, 1999
at a redemption price of
103.844% declining annually to
par on April 15, 2002. The Old
8 3/4% Debentures are
redeemable at any time on or
after March 15, 1998 at a
redemption price of 104.375%
declining annually to par on
March 15, 2001.
CHANGE OF CONTROL: Holders may require repurchase The Company is not required
of Old Securities at par to repurchase New Securities
following a Change of Control following a change of
and a Rating Decline. The control of the Company.
Proposed Amendments would
eliminate this requirement.
SINKING FUND: None. None.
SECURITY: None. None.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
OLD SECURITIES NEW SECURITIES
-------------- --------------
<S> <C> <C>
RANKING: The Old Securities are The New Securities are
subordinated to senior unsubordinated senior
indebtedness of Healthtrust and obligations of the Company
the Company. and will rank pari passu
with all existing and future
unsubordinated senior
indebtedness of the Company.
CERTAIN COVENANTS: The Old Securities restrict, The covenants with respect
among other things, (i) the to the New Securities are
incurrence of indebtedness by substantially less
an Obligor and its subsidiaries restrictive than those with
and (ii) dividends and respect to the Old
distributions on, and Securities. The New
repurchases of, an Obligor's Securities restrict, among
capital stock and certain other other things, (i) the
restricted payments and ability of the Company and
investments by an Obligor and its subsidiaries to secure
its subsidiaries. The Proposed indebtedness by mortgaging
Amendments would modify the certain hospital properties
covenants with respect to the or engaging in sale and
Old Securities to make such lease-back transactions and
covenants consistent with those (ii) the incurrence of
with respect to the Company's indebtedness and issuance of
existing debt securities and preferred stock by the
the New Securities. Company's subsidiaries.
CONSOLIDATION, MERGER,
ASSET SALES: An Obligor may not consolidate, The Company may not
merge or sell all or consolidate, merge or sell
substantially all of its all or substantially all of
assets, unless (i) the its assets, unless (i) the
successor corporation expressly successor corporation
assumes the Obligor's assumes the Company's
obligations under the Old obligations under the New
Securities, (ii) the Securities, (ii) immediately
Consolidated Net Worth of the thereafter no event of
successor corporation is default with respect to the
greater than that of the New Securities shall have
Obligor immediately prior to occurred and be continuing
the transaction, (iii) the and (iii) certain other
successor corporation could conditions are satisfied.
incur $1.00 of additional
indebtedness under the covenant
limiting incurrence of
indebtedness by an Obligor and
(iv) immediately thereafter no
event of default with respect
to the Old Securities shall
have occurred and be
continuing. The Proposed
Amendments would modify this
provision to make it consistent
with the analogous provision in
the Company's existing debt
securities and the New
Securities.
EVENTS OF DEFAULT: Failure to pay principal when Failure to pay principal
due; failure to pay interest when due; failure to pay
for 30 days; failure to perform interest for 30 days;
any other covenant following failure to perform any other
notice continued for, 90 days covenant continued for 60
in the case of the Old 10 1/4% days following notice; and
Notes and Old 8 3/4% certain bankruptcy and
Debentures, or 60 days in the insolvency events.
case of the Old 10 3/4% Notes;
certain bankruptcy and
insolvency events; cross-
acceleration of, or failure to
pay at maturity, debt of,
$50,000,000 or more in the case
of the Old 10 1/4% Notes and
Old 8 3/4% Debentures, or
$25,000,000 or more in the case
of the Old 10 3/4% Notes; and,
in the case of the Old 10 3/4%
Notes, final judgment exceeding
$25,000,000 unstayed for 60
days.
LISTING: The Old 10 3/4% Notes and Old 8 The Company does not plan to
3/4% Debentures currently are list the New Securities on
listed on the NYSE; however, any securities exchange.
such issues may be delisted
following the Exchange Offers.
The Old 10 1/4% Notes are not
listed on any securities
exchange.
</TABLE>
13
<PAGE>
SUPPLEMENTAL SELECTED FINANCIAL DATA--THE COMPANY
Set forth below is certain supplemental selected financial data for the
Company for the periods and as of the dates indicated, which is based on the
supplemental consolidated financial statements of the Company incorporated by
reference in this Prospectus.
For accounting purposes, the Healthtrust Merger (as defined herein) has been
treated as a pooling of interests. Accordingly, the supplemental consolidated
financial statements and supplemental selected financial data give retroactive
effect to the Healthtrust Merger and include the combined operations of the
Company and Healthtrust for all periods presented. The historical financial
information related to Healthtrust (which prior to the Healthtrust Merger was
reported on a fiscal year ending August 31) has been recast to conform to the
Company's annual reporting period ending December 31. The following data should
be read in conjunction with the supplemental consolidated financial statements
of the Company incorporated by reference in this Prospectus.
COLUMBIA/HCA HEALTHCARE CORPORATION
SUPPLEMENTAL SELECTED FINANCIAL DATA
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS:
Revenues................ $ 14,543 $ 12,678 $ 12,226 $ 11,722 $ 10,517
--------- --------- --------- --------- ---------
Salaries, wages and
benefits............... 5,963 5,202 5,062 4,924 4,401
Supplies................ 2,144 2,015 1,948 1,774 1,590
Other operating
expenses............... 2,722 2,351 2,292 2,153 1,953
Provision for doubtful
accounts............... 853 699 652 638 558
Depreciation and
amortization........... 804 689 670 647 618
Interest expense........ 387 415 506 748 852
Investment income....... (69) (74) (88) (83) (85)
Non-recurring
transactions........... 159 151 532 521 22
--------- --------- --------- --------- ---------
12,963 11,448 11,574 11,322 9,909
--------- --------- --------- --------- ---------
Income from continuing
operations before
minority interests and
income taxes........... 1,580 1,230 652 400 608
Minority interests in
earnings of
consolidated entities.. 40 18 25 24 14
--------- --------- --------- --------- ---------
Income from continuing
operations before
income taxes........... 1,540 1,212 627 376 594
Provision for income
taxes.................. 611 492 334 158 233
--------- --------- --------- --------- ---------
Income from continuing
operations............. 929 720 293 218 361
Discontinued operations:
Income (loss) from
operations of
discontinued health
plan segment, net of
income tax (benefit).. - 16 (108) 16 (6)
Costs associated with
discontinuance of
health plan segment,
net of income tax
benefit............... - - (17) - -
Extraordinary loss on
extinguishment of debt,
net of income tax
benefit................ (115) (97) (23) (114) (5)
Cumulative effect on
prior years of a change
in accounting for
income taxes........... - - 51 - -
--------- --------- --------- --------- ---------
Net income............. $ 814 $ 639 $ 196 $ 120 $ 350
========= ========= ========= ========= =========
Earnings per common and
common equivalent
share(a):
Income from continuing
operations............ $ 2.16 $ 1.75 $ .75 $ .59 $ .95
Discontinued
operations:
Income (loss) from
operations of
discontinued health
plan segment.......... - .04 (.27) .05 (.02)
Costs associated with
discontinuance of
health plan segment... - - (.05) - -
Extraordinary loss on
extinguishment of
debt.................. (.27) (.24) (.06) (.34) (.02)
Cumulative effect on
prior years of a
change in accounting
for income taxes...... - - .13 - -
--------- --------- --------- --------- ---------
Net income............. $ 1.89 $ 1.55 $ .50 $ .30 $ .91
========= ========= ========= ========= =========
Shares used in earnings
per common and common
equivalent share
computations (in
thousands)............. 429,295 413,036 394,378 334,676 315,606
Net cash provided by
continuing operations.. $ 1,747 $ 1,585 $ 1,776 $ 1,607 $ 1,531
Cash dividends per
common share........... $ .12 $ .06 - - -
Ratio of earnings to
fixed charges.......... 4.09x 3.33x 2.05x 1.47x 1.65x
FINANCIAL POSITION:
Assets.................. $ 16,278 $ 12,685 $ 12,773 $ 13,081 $ 12,321
Working capital......... 1,092 835 899 917 856
Net assets of
discontinued
operations............. - - 376 411 303
Long-term debt,
including amounts due
within one year........ 5,672 4,682 4,735 6,380 6,385
Minority interests in
equity of consolidated
entities............... 278 67 51 44 36
Common stockholders'
equity................. $ 6,090 $ 4,158 $ 4,241 $ 3,219 $ 2,236
OPERATING DATA:
Number of hospitals at
end of period.......... 311 274 281 301 306
Number of licensed beds
at end of period....... 59,595 53,245 53,457 54,616 54,443
Weighted average
licensed beds.......... 57,517 53,247 51,955 54,072 54,297
Average daily census.... 23,841 22,973 23,569 25,819 26,096
Occupancy............... 41% 43% 45% 48% 48%
Admissions.............. 1,565,500 1,451,000 1,448,000 1,486,200 1,475,400
Average length of stay
(days)................. 5.6 5.8 6.0 6.3 6.5
Emergency room visits... 4,651,000 4,248,900 4,065,000 4,016,700 3,852,100
</TABLE>
- -------
(a) Earnings per common and common equivalent share include the effect of
preferred stock dividend requirements totaling $18 million in 1991 and $63
million in 1990.
14
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
SUPPLEMENTAL COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations before
minority interests and income taxes....... $1,580 $1,230 $ 652 $ 400 $ 608
Fixed charges, exclusive of capitalized
interest.................................. 491 497 584 817 904
------ ------ ------ ------ ------
$2,071 $1,727 $1,236 $1,217 $1,512
====== ====== ====== ====== ======
Fixed charges:
Interest charged to expense................ $ 387 $ 415 $ 506 $ 748 $ 852
One-third of rent expense and amortization
of deferred loan costs (a)................ 104 82 78 69 52
------ ------ ------ ------ ------
Fixed charges, exclusive of capitalized
interest.................................. 491 497 584 817 904
Capitalized interest....................... 15 22 18 12 11
------ ------ ------ ------ ------
$ 506 $ 519 $ 602 $ 829 $ 915
====== ====== ====== ====== ======
Ratio of earnings to fixed charges.......... 4.09x 3.33x 2.05x 1.47x 1.65x
</TABLE>
- -------
(a) One-third of rent expense is considered representative of the underlying
interest.
15
<PAGE>
SELECTED FINANCIAL DATA--THE COMPANY
Set forth below is certain selected financial data for the Company for the
periods and as of the dates indicated, which is based upon the historical
consolidated financial statements of the Company. Such data does not give
effect to the Healthtrust Merger. See "Supplemental Selected Financial Data--
The Company." The following data should be read in conjunction with the
consolidated financial statements and supplemental consolidated financial
statements of the Company incorporated by reference in this Prospectus.
COLUMBIA/HCA HEALTHCARE CORPORATION
SELECTED FINANCIAL DATA
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
AS OF AND FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS:
Revenues................ $ 11,132 $ 10,252 $ 9,932 $ 9,598 $ 8,641
--------- --------- --------- --------- ---------
Salaries, wages and ben-
efits.................. 4,545 4,215 4,112 3,976 3,510
Supplies................ 1,686 1,664 1,613 1,467 1,314
Other operating ex-
penses................. 2,059 1,893 1,849 1,739 1,586
Provision for doubtful
accounts............... 628 542 515 508 444
Depreciation and amorti-
zation................. 609 554 541 524 499
Interest expense........ 248 321 401 597 694
Investment income....... (62) (66) (81) (64) (69)
Non-recurring transac-
tions.................. 159 151 439 300 22
--------- --------- --------- --------- ---------
9,872 9,274 9,389 9,047 8,000
--------- --------- --------- --------- ---------
Income from continuing
operations before mi-
nority interests and
income taxes........... 1,260 978 543 551 641
Minority interests in
earnings of consoli-
dated entities......... 29 9 10 9 4
--------- --------- --------- --------- ---------
Income from continuing
operations before in-
come taxes............. 1,231 969 533 542 637
Provision for income
taxes.................. 486 394 294 189 240
--------- --------- --------- --------- ---------
Income from continuing
operations............. 745 575 239 353 397
Discontinued operations:
Income (loss) from
operations of
discontinued health
plan segment, net of
income tax (benefit).. - 16 (108) 16 (6)
Costs associated with
discontinuance of
health plan segment,
net of income tax
benefit............... - - (17) - -
Extraordinary loss on
extinguishment of debt,
net of income tax bene-
fit.................... (115) (84) - - -
Cumulative effect on
prior years of a change
in accounting for in-
come taxes............. - - 51 - -
--------- --------- --------- --------- ---------
Net income............. $ 630 $ 507 $ 165 $ 369 $ 391
========= ========= ========= ========= =========
Earnings per common and
common equivalent share
(a):
Income from continuing
operations............ $ 2.13 $ 1.70 $ .73 $ 1.20 $ 1.28
Discontinued
operations:
Income (loss) from
operations of
discontinued health
plan segment.......... - .04 (.33) .05 (.02)
Costs associated with
discontinuance of
health plan segment... - - (.06) - -
Extraordinary loss on
extinguishment of
debt.................. (.33) (.24) - - -
Cumulative effect on
prior years of a
change in accounting
for income taxes...... - - .16 - -
--------- --------- --------- --------- ---------
Net income............. $ 1.80 $ 1.50 $ .50 $ 1.25 $ 1.26
========= ========= ========= ========= =========
Shares used in earnings
per common and common
equivalent share
computations (in
thousands)............. 350,075 339,222 328,564 279,954 262,552
Net cash provided by
continuing operations.. $ 1,301 $ 1,298 $ 1,287 $ 1,257 $ 1,191
Cash dividends per com-
mon share.............. $ .12 $ .06 - - -
Ratio of earnings to
fixed charges.......... 4.68x 3.42x 2.11x 1.82x 1.85x
FINANCIAL POSITION:
Assets.................. $ 12,339 $ 10,216 $ 10,347 $ 10,843 $ 10,391
Working capital......... 783 573 606 635 482
Net assets of discontin-
ued operations......... - - 376 411 303
Long-term debt, includ-
ing amounts due within
one year............... 3,930 3,698 3,656 5,158 5,139
Minority interests in
equity of consolidated
entities............... 258 57 31 23 16
Common stockholders' eq-
uity................... $ 5,022 $ 3,471 $ 3,691 $ 2,822 $ 2,099
OPERATING DATA:
Number of hospitals at
end of period.......... 195 193 200 219 221
Number of licensed beds
at end of period....... 43,670 42,237 42,245 43,231 42,789
Weighted average bed ca-
pacity................. 42,357 41,263 40,608 42,437 42,264
Average daily census.... 18,524 18,702 19,253 21,255 21,351
Occupancy............... 44% 45% 47% 50% 51%
Admissions.............. 1,189,400 1,158,400 1,161,100 1,189,700 1,174,700
Average length of stay
(days)................. 5.7 5.9 6.1 6.5 6.6
Emergency room visits... 3,215,500 3,139,700 3,042,900 3,028,600 2,894,800
Outpatient revenues as a
percentage of patient
revenues............... 30% 27% 26% 24% 22%
</TABLE>
- --------
(a) Earnings per common and common equivalent share include the effect of
preferred stock dividend requirements totaling $18 million in 1991 and $63
million in 1990.
16
<PAGE>
SELECTED FINANCIAL DATA--HEALTHTRUST
Set forth below is certain selected financial data for Healthtrust for the
periods and as of the dates indicated, which is based on the historical
consolidated financial statements of Healthtrust. The following data is
reported on a fiscal year ended August 31 (in contrast to the selected
financial data of the Company which is reported on a fiscal year ended
December 31). The following data should be read in conjunction with the
consolidated financial statements of Healthtrust incorporated by reference in
this Prospectus.
HEALTHTRUST, INC.--THE HOSPITAL COMPANY
SELECTED FINANCIAL DATA
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FEBRUARY 28,
--------------------
1995(A) 1994
---------- ---------
<S> <C> <C>
SUMMARY OF OPERATIONS (B):
Revenues........................................... $ 1,985 $ 1,275
--------- ---------
Salaries, wages and benefits....................... 823 511
Supplies........................................... 261 179
Other operating expenses........................... 387 240
Provision for doubtful accounts.................... 129 89
Depreciation and amortization...................... 113 70
Interest expense................................... 81 42
Investment income.................................. (4) (5)
--------- ---------
1,790 1,126
--------- ---------
Income (loss) before minority interests and income
taxes............................................. 195 149
Minority interests in earnings of consolidated
entities.......................................... 4 4
--------- ---------
Income (loss) before income taxes.................. 191 145
Provision (benefit) for income taxes............... 80 59
--------- ---------
Income (loss) before extraordinary item............ 111 86
Extraordinary loss on extinguishment of debt, net
of income tax benefit............................. - -
--------- ---------
Net income (loss)................................. 111 86
Dividends paid and discount accretion on preferred stock (c). - -
--------- ---------
Net income (loss) to common stockholders.......... $ 111 $ 86
========= =========
Earnings (loss) per common and common equivalent
share:
Income (loss) before extraordinary item........... $ 1.20 $ 1.02
Extraordinary loss on extinguishment of debt...... - -
--------- ---------
Net income (loss) to common stockholders.......... $ 1.20 $ 1.02
========= =========
Shares used in earnings per common and common
equivalent share computations (in thousands)...... 92,770 84,639
Net cash provided by operations.................... $ 145 $ 77
Ratio of earnings to fixed charges................. 2.96x 3.56x
<CAPTION>
FEBRUARY 28,
1995(A)
------------
<S> <C> <C>
FINANCIAL POSITION:
Assets............................................. $4,019
Working capital.................................... 297
Long-term debt, including amounts due within one
year.............................................. 1,741
Minority interests in equity of consolidated
entities.......................................... 21
Redeemable preferred stock (c)..................... -
Common stockholders' equity........................ $1,146
<CAPTION>
FOR THE SIX MONTHS
ENDED FEBRUARY 28,
--------------------
1995(A) 1994
---------- ---------
<S> <C> <C>
OPERATING DATA:
Number of hospitals at end of period............... 117 81
Weighted average licensed beds..................... 15,955 11,008
Average daily census............................... 6,026 4,273
Occupancy.......................................... 38% 39%
Admissions......................................... 215,208 147,401
Average length of stay (days)...................... 5.1 5.2
Emergency room visits.............................. 776,989 548,933
Outpatient revenues as a percentage of patient
revenues.......................................... 36% 32%
<CAPTION>
FOR THE YEARS ENDED AUGUST 31,
---------------------------------------------------
1994(A) 1993 1992 1991 1990
---------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS (B):
Revenues........................................... $ 2,970 $ 2,395 $ 2,265 $ 2,026 $ 1,857
---------- ---------- ---------- -------- ---------
Salaries, wages and benefits....................... 1,216 976 938 923 899
Supplies........................................... 405 347 326 292 271
Other operating expenses........................... 582 463 445 400 370
Provision for doubtful accounts.................... 196 146 137 124 113
Depreciation and amortization...................... 166 133 128 121 119
Interest expense................................... 114 100 120 153 161
Investment income.................................. (8) (8) (9) (22) (9)
---------- ---------- ---------- -------- ---------
2,671 2,157 2,085 1,991 1,924
---------- ---------- ---------- -------- ---------
Income (loss) before minority interests and income
taxes............................................. 299 238 180 35 (67)
Minority interests in earnings of consolidated
entities.......................................... 10 12 15 13 8
---------- ---------- ---------- -------- ---------
Income (loss) before income taxes.................. 289 226 165 22 (75)
Provision (benefit) for income taxes............... 116 91 72 15 (22)
---------- ---------- ---------- -------- ---------
Income (loss) before extraordinary item............ 173 135 93 7 (53)
Extraordinary loss on extinguishment of debt, net
of income tax benefit............................. - (13) (136) - (6)
---------- ---------- ---------- -------- ---------
Net income (loss)................................. 173 122 (43) 7 (59)
Dividends paid and discount accretion on preferred stock (c). - - 25 77 66
---------- ---------- ---------- -------- ---------
Net income (loss) to common stockholders.......... $ 173 $ 122 $ (68) $ (70) $ (125)
========== ========== ========== ======== =========
Earnings (loss) per common and common equivalent
share:
Income (loss) before extraordinary item........... $ 1.98 $ 1.62 $ .90 $ (1.15) $ (2.03)
Extraordinary loss on extinguishment of debt...... - (.16) (1.78) - (.10)
---------- ---------- ---------- -------- ---------
Net income (loss) to common stockholders.......... $ 1.98 $ 1.46 $ (.88) $ (1.15) $ (2.13)
========== ========== ========== ======== =========
Shares used in earnings per common and common
equivalent share computations (in thousands)...... 87,444 83,541 76,769 60,409 58,534
Net cash provided by operations.................... $ 369 $ 365 $ 430 $ 321 $ 349
Ratio of earnings to fixed charges................. 3.08x 2.79x 2.18x 1.13x (d)
<CAPTION>
AUGUST 31,
---------------------------------------------------
1994(A) 1993 1992 1991 1990
---------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
FINANCIAL POSITION:
Assets............................................. $ 3,967 $ 2,537 $ 2,380 $ 2,445 $ 2,294
Working capital.................................... 283 219 245 390 310
Long-term debt, including amounts due within one
year.............................................. 1,785 1,049 1,109 1,221 1,226
Minority interests in equity of consolidated
entities.......................................... 17 14 21 21 21
Redeemable preferred stock (c)..................... - - - 576 500
Common stockholders' equity........................ $ 1,026 $ 656 $ 531 $ 88 $ 42
<CAPTION>
FOR THE YEARS ENDED AUGUST 31,
---------------------------------------------------
1994(A) 1993 1992 1991 1990
---------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Number of hospitals at end of period............... 116 81 81 85 86
Weighted average licensed beds..................... 12,466 11,233 11,374 11,607 12,022
Average daily census............................... 4,747 4,223 4,416 4,543 4,911
Occupancy.......................................... 38% 38% 39% 39% 41%
Admissions......................................... 333,200 284,606 291,599 293,344 307,758
Average length of stay (days)...................... 5.2 5.4 5.5 5.7 5.8
Emergency room visits.............................. 1,288,377 1,065,626 1,015,708 958,642 972,678
Outpatient revenues as a percentage of patient
revenues.......................................... 34% 31% 30% 27% 24%
</TABLE>
- -------
(a) The selected historical consolidated financial data includes the effect of
the acquisition of EPIC Holdings, Inc. in May 1994.
(b) Certain amounts have been reclassified to conform to classifications in the
Company's Summary of Operations.
(c) The redeemable preferred stock (which was held by the Company) was retired
as a component of Healthtrust's 1991 recapitalization.
(d) Healthtrust's earnings were inadequate to cover fixed charges for the year
ended August 31, 1990 by $76 million.
17
<PAGE>
INVESTMENT CONSIDERATIONS
The following factors and other information described, or incorporated by
reference, herein should be carefully considered by each prospective investor
before deciding whether to tender Old Securities pursuant to the Exchange
Offers.
CERTAIN CONSIDERATIONS FOR NON-TENDERING HOLDERS
Amendment of Indentures. Prior to the announcement of the acquisition of
Healthtrust by the Company, the Old Securities were rated below investment
grade at B1 by Moody's and B by S&P. The Old Securities currently are subject
to terms and restrictive covenants that are, in general, typical of debt
securities with similar ratings. Following the Company's acquisition of
Healthtrust, the Company, whose debt securities as of the date hereof are
rated investment grade at A3 by Moody's and BBB+ by S&P, became a co-obligor
with Healthtrust with respect to the Old Securities. As of the date hereof,
each of Moody's and S&P has raised its rating with respect to the Old
Securities to investment grade at Baa1 by Moody's and BBB by S&P. Pursuant to
the Solicitation, the Company is proposing parallel amendments to the 1992
Indenture and the 1993 Indenture in order to make the covenants and certain
other terms in each such indenture consistent with those that currently apply
to the Company and its subsidiaries with respect to the Company's existing
debt securities and that will apply to the Company and its subsidiaries with
respect to the New Securities. There can be no assurance, however, that the
Old Securities, or any of the Company's debt securities, will continue to be
rated investment grade in the future. See "The Consent Solicitation."
In the event the Proposed Amendments are adopted with respect to an issue of
Old Securities, the covenants and certain other terms with respect to such Old
Securities, although consistent with those applicable to the Company with
respect to its existing debt securities and the New Securities, will be
substantially less restrictive, and afford less protection to holders, than
those currently set forth in the 1992 Indenture and the 1993 Indenture. The
Proposed Amendments contemplated by the Solicitation would, among other
things, eliminate the covenants in each of the 1992 Indenture and the 1993
Indenture that restrict the incurrence of Indebtedness and the making of
Restricted Payments (as defined in the indentures) by an Obligor and its
subsidiaries and would replace those covenants with covenants (i) limiting the
ability of an Obligor and certain of its subsidiaries to mortgage or pledge,
or engage in sale and lease-back transactions with respect to, certain
hospital properties and (ii) restricting the issuance of preferred stock and
the incurrence of indebtedness by certain subsidiaries of an Obligor. In
addition, the Company proposes to (i) make the provisions in the 1992
Indenture and the 1993 Indenture governing consolidations, mergers and asset
sales less restrictive and (ii) eliminate the provisions that require that, in
the event of a Change of Control and a Rating Decline (as defined in the
indentures), the Old Securities be repurchased at par at the option of
holders.
If Requisite Consents are received with respect to an issue of Old
Securities and the Exchange Offer with respect to such issue is consummated,
the relevant Indenture will be amended with respect to such issue as discussed
herein. Each non-exchanging holder of such issue of Old Securities will be
bound by the Proposed Amendments even if the holder did not consent to the
Proposed Amendments. See "The Consent Solicitation" and "The Proposed
Amendments."
Reduced Liquidity of Old Securities. If the Exchange Offer for an issue of
Old Securities is consummated, then the trading market for such issue could
become more limited because of the reduction in the amount outstanding of Old
Securities of such issue. This may adversely effect the liquidity and market
price of such issue of Old Securities. In addition, following the Exchange
Offers the Company may de-list the Old 10 3/4% Notes and the Old 8 3/4%
Debentures, which currently are listed on the NYSE. De-listing may have a
further adverse effect on the liquidity of those issues.
18
<PAGE>
Subordination. Unlike the New Securities, the Old Securities are
subordinated to senior indebtedness of Healthtrust and the Company. If New
Securities are issued as a result of the Exchange Offers, there will be an
increased amount of indebtedness of the Company, equal to the amount of New
Securities issued, senior in right of payment to the Old Securities.
CERTAIN CONSIDERATIONS FOR TENDERING HOLDERS
Terms of New Securities. Unlike the Old Securities with respect to which
both the Company and Healthtrust are obligors, the Company is the only obligor
with respect to the New Securities. The Company, like Healthtrust, is a
holding company; as a result, the rights of the Company to participate in any
distribution of assets of any subsidiary upon its liquidation or
reorganization or otherwise (and thus the ability of holders of the New
Securities to benefit from such distribution) are subject to the prior claims
of creditors of that subsidiary, except to the extent that the Company may
itself be a creditor with recognized claims against that subsidiary. Claims on
the Company's subsidiaries by creditors may include claims of holders of
indebtedness and claims of creditors in the ordinary course of business. Such
claims may increase or decrease, and additional claims may be incurred in the
future.
The New Securities will contain covenants and certain other terms consistent
with those that currently apply to the Company and its subsidiaries pursuant
to the Company's existing debt securities. Such covenants and terms are
substantially less restrictive, and afford less protection to holders, than
those currently set forth in the 1992 Indenture and the 1993 Indenture.
However, such covenants will be consistent with those that will apply pursuant
to an issue of Old Securities if the Proposed Amendments are adopted with
respect to such issue. See "Description of New Securities."
Liquidity of New Securities. The Company does not plan to list the New
Securities on any securities exchange. In addition, depending on, among other
things, the amount of New Securities outstanding after the Exchange Offers,
the trading market for the New Securities may be more limited than the trading
market for the Old Securities prior to the Exchange Offers. A limited trading
market may adversely affect the liquidity and market price of the New
Securities.
The Dealer Manager currently plans to make a market in the New Securities
following the completion of the Exchange Offers and may buy and sell New
Securities on a "when and if issued" basis prior to the completion of the
Exchange Offers. However, there can be no assurance that the Dealer Manager
will engage in such activities or that any active market in the New Securities
will develop or be maintained.
THE COMPANY
Healthtrust Merger. On April 24, 1995, the Company acquired Healthtrust. The
acquisition of Healthtrust involves the integration of the operations of the
Company and Healthtrust, two companies that previously have operated
independently. There can be no assurance that the Company will not encounter
difficulties in integrating its operations with those of Healthtrust. See
"Recent Developments."
19
<PAGE>
THE COMPANY
Columbia/HCA Healthcare Corporation (the "Company") is one of the largest
health care services companies in the United States. At April 24, 1995, the
Company operated 292 general, acute care hospitals and 28 psychiatric
hospitals in 38 states and two foreign countries. In addition, as part of its
comprehensive health care networks, the Company operates facilities that
provide a broad range of outpatient and ancillary services. At April 24, 1995,
the Company operated more than 125 outpatient centers.
The Company's primary objective is to provide to the markets it serves a
comprehensive array of quality health care services in the most cost effective
manner possible. The Company's general, acute care hospitals typically provide
a full range of services commonly available in hospitals to accommodate such
medical specialties as internal medicine, general surgery, cardiology,
oncology, neurosurgery, orthopedics and obstetrics, as well as diagnostic and
emergency services. Outpatient and ancillary health care services are provided
by the Company's general, acute care hospitals as well as at freestanding
facilities operated by the Company, including outpatient surgery and
diagnostic centers, rehabilitation facilities, home health care agencies and
other facilities. In addition, the Company operates psychiatric hospitals
which generally provide a full range of mental health care services in
inpatient, partial hospitalization and outpatient settings.
On April 24, 1995, the Company acquired Healthtrust, pursuant to a merger
transaction accounted for as a pooling of interests. See "Recent
Developments." On September 16, 1994, the Company acquired Medical Care
America, Inc. in a transaction accounted for as a purchase. On February 10,
1994, the Company acquired HCA-Hospital Corporation of America pursuant to a
merger transaction accounted for as a pooling of interests. Effective
September 1, 1993, the Company acquired Galen Health Care, Inc. pursuant to a
merger transaction accounted for as a pooling of interests.
The Company's strategy is to become a significant, comprehensive provider of
quality health care services in targeted markets. The Company pursues its
strategy by acquiring the health care facilities necessary to develop a
comprehensive health care network with wide geographic presence throughout the
market. Typically, the Company enters a market by acquiring one or more mid-
to large-size general, acute care hospitals (over 150 licensed beds), which
have either desirable physical plants or ones which can be upgraded on an
economically feasible basis. The Company then upgrades equipment and
facilities and adds new services to increase the attractiveness of the
hospital to local physicians and patient populations. The Company typically
develops a network by acquiring additional health care facilities including
additional general, acute care hospitals, psychiatric hospitals and outpatient
facilities such as surgery centers, diagnostic centers, physical therapy
centers and other treatment or wellness facilities including home health care
agencies. By developing a comprehensive health care network in a local market,
the Company achieves greater visibility and is better able to attract
physicians and patients by offering a full range of services in the entire
market area. The Company is also able to reduce operating costs by sharing
certain services among several facilities in the same market and is better
positioned to work with health maintenance organizations, preferred provider
organizations and employers.
HEALTHTRUST
Healthtrust is one of the largest providers of health care services in the
United States, delivering a full range of inpatient, outpatient and other
health care services principally through its affiliated hospitals. At March
31, 1995, Healthtrust operated 117 acute care hospitals, all of which were
owned or leased by Healthtrust through its subsidiaries or joint venture
arrangements. Healthtrust was also an investor, through joint ventures, in
four other acute care hospitals. Healthtrust's affiliated hospitals are
located in rural, suburban and urban communities in 22 southern and western
states. Heathtrust's
20
<PAGE>
affiliated hospitals generally provide a full range of inpatient and
outpatient health care services, including medical/surgical, diagnostic,
obstetric, pediatric and emergency services. Many of Healthtrust's hospitals
also offer certain specialty programs and services, including occupational
medicine programs, home health care services, skilled nursing services,
physical therapy programs, rehabilitation services, alcohol and drug
dependency programs and selected mental health services. The health care
services provided by each hospital are based upon the local demand for such
services and the ability to provide such services on a competitive basis.
Healthtrust has experienced consistent growth since it began operations
through the acquisition of a group of hospitals and related assets from
Hospital Corporation of America in September 1987. On May 5, 1994, Healthtrust
acquired EPIC Holdings, Inc. in a transaction accounted for as a purchase.
RECENT DEVELOPMENTS
On April 24, 1995, a wholly-owned subsidiary of the Company merged with and
into Healthtrust (the "Healthtrust Merger"). Healthtrust was the surviving
company following the Healthtrust Merger (as used herein the term
"Healthtrust" refers to either the pre-merger Healthtrust or the post-merger
Healthtrust as the context requires). Each stockholder of Healthtrust received
for each share of Healthtrust common stock owned as of the effective time of
the Healthtrust Merger 0.88 of a share of the Company's common stock. The
Healthtrust Merger was accounted for as a pooling of interests. Following the
Healthtrust Merger, the Company assumed all of Healthtrust's obligations
under, and has become a co-obligor with Healthtrust with respect to, the Old
Securities.
The Healthtrust Merger involves the integration of two companies that
previously have operated independently. There can be no assurance that the
Company will not encounter difficulties in integrating the operations of
Healthtrust with those of the Company or that the benefits expected from such
integration will be realized. Any delays or unexpected costs incurred in
connection with such integration could have a material adverse effect on the
Company's business, operating results or financial condition. Furthermore,
there can be no assurance that the operations, managements and personnel of
the two companies will be compatible or that the Company or Healthtrust will
not experience the loss of key personnel. Among the factors considered by the
Board of Directors of the Company in connection with its approval of the
Healthtrust Merger were the opportunities for economies of scale and operating
efficiencies that should result from the Healthtrust Merger. While the Company
expects to achieve annual savings in operating costs as a result of the
Healthtrust Merger (including, without limitation, as a result of integration
of office facilities, information systems and support functions and the
combined purchasing power of the two companies), there can be no assurance
that these savings will be realized.
21
<PAGE>
THE EXCHANGE OFFERS
The Company is making the Exchange Offers in order to reduce the Company's
future long-term interest expense. The Company is soliciting the Consents in
order to eliminate certain restrictions on the Company and Healthtrust set
forth in the 1992 Indenture and the 1993 Indenture that the Company believes
are no longer necessary for the protection of holders of Old Securities as a
result of the Company's becoming a co-obligor on the Old Securities. There can
be no assurance, however, that the Company will achieve these goals as a
result of the Exchange Offers and the Solicitation.
TERMS OF THE EXCHANGE OFFERS
Subject to the terms and conditions set forth in this Prospectus and the
accompanying Letters of Transmittal, the Company is offering to exchange (i)
$1,000 principal amount of the Company's New 2005 Notes plus an amount of cash
based on the relevant fixed spread pricing formula, for each $1,000 principal
amount of Healthtrust's Old 10 3/4% Notes properly tendered, (ii) $1,000
principal amount of the Company's New 2000 Notes plus an amount of cash based
on the relevant fixed spread pricing formula, for each $1,000 principal amount
of Healthtrust's Old 10 1/4% Notes properly tendered and (iii) $1,000
principal amount of the Company's New 2025 Notes plus an amount of cash based
on the relevant fixed spread pricing formula, for each $1,000 principal amount
of Healthtrust's Old 8 3/4% Debentures properly tendered.
The amount of cash a tendering holder will receive, for each $1,000
principal amount of Old Securities tendered, will equal the amount by which
the Reference Total Price for the Old Securities tendered exceeds $1,000.
Because the Reference Total Price is based on a fixed spread pricing formula
linked to a Benchmark Treasury Yield, the amount of cash that will be received
by a tendering holder in the event an Exchange Offer is consummated will be
affected by changes in the applicable Benchmark Treasury Yield during the term
of the Exchange Offer. Similarly, because the interest rate on each issue of
New Securities is linked to a Benchmark Treasury Yield, the actual interest
rate that would be realized by a tendering holder will be affected by changes
in the applicable Benchmark Treasury Yield during the term of the Exchange
Offer. During the term of the Exchange Offers, current information regarding
Benchmark Treasury Yields, Reference Yields, Reference Total Prices and
interest rates on the New Securities may be obtained from the Liability
Management Group at the Dealer Manager at (800) 558-3745 (toll free) or (212)
783-3738 (call collect). The Reference Total Price with respect to each issue
of Old Securities and the interest rate with respect to each issue of New
Securities will be fixed based on the Benchmark Treasury Yields as of 4:00
p.m., New York City time, on the second business day prior to the Expiration
Date (the "Pricing Time").
Exchange Offer for the Old 10 3/4% Notes. In exchange for each $1,000
principal amount of Old 10 3/4% Notes tendered by the holder thereof in
accordance with the terms of this Prospectus and the applicable Letter of
Transmittal and accepted by the Company, the tendering holder will receive
$1,000 principal amount of New 2005 Notes and an amount in cash equal to the
amount by which the Reference Total Price for the Old 10 3/4% Notes exceeds
$1,000. Such Reference Total Price will be based on a Reference Yield to the
first optional redemption date with respect to such notes (May 1, 1997) equal
to the sum of (i) the yield on the 6 1/2% U.S. Treasury Note due April 30,
1997, as of the Pricing Time, plus (ii) %. The redemption price on the
redemption date of May 1, 1997, which will be used in determining the
Reference Total Price for the Old 10 3/4% Notes, is $1,040 per $1,000
principal amount of Old 10 3/4% Notes.
The per annum interest rate on the New 2005 Notes will equal the sum of (i)
the yield on the 7 1/2% U.S. Treasury Note due February 15, 2005, as of the
Pricing Time, plus (ii) %.
Exchange Offer for the Old 10 1/4% Notes. In exchange for each $1,000
principal amount of Old 10 1/4% Notes tendered by the holder thereof in
accordance with the terms of this Prospectus and the applicable Letter of
Transmittal and accepted by the Company, the tendering holder will receive
$1,000
22
<PAGE>
principal amount of New 2000 Notes and an amount in cash equal to the amount
by which the Reference Total Price for the Old 10 1/4% Notes exceeds $1,000.
Such Reference Total Price will be based on a Reference Yield to the first
optional redemption date with respect to such notes (April 15, 1999) equal to
the sum of (i) the yield on the 7% U.S. Treasury Note due April 15, 1999, as
of the Pricing Time, plus (ii) %. The redemption price on the redemption date
of April 15, 1999, which will be used in determining the Reference Total Price
for the Old 10 1/4% Notes, is $1,038.44 per $1,000 principal amount of Old 10
1/4% Notes.
The per annum interest rate on the New 2000 Notes will equal the sum of (i)
the yield on the 6 3/4% U.S. Treasury Note due April 30, 2000, as of the
Pricing Time, plus (ii) %.
Exchange Offer for the Old 8 3/4% Debentures. In exchange for each $1,000
principal amount of Old 8 3/4% Debentures tendered by the holder thereof in
accordance with the terms of this Prospectus and the applicable Letter of
Transmittal and accepted by the Company, the tendering holder will receive
$1,000 principal amount of New 2025 Notes and an amount of cash equal to the
amount by which the Reference Total Price for the Old 8 3/4% Debentures
exceeds $1,000. Such Reference Total Price will be based on a Reference Yield
to the first date at which such debentures could be redeemed at par (March 15,
2001) equal to the sum of (i) the yield on the 7 3/4% U.S. Treasury Note due
February 15, 2001, as of the Pricing Time, plus (ii) %. The redemption price
on the redemption date of March 15, 2001, which will be used in determining
the Reference Total Price for the Old 8 3/4% Debentures, is $1,000 per $1,000
principal amount of Old 8 3/4% Debentures.
The per annum interest rate on the New 2025 Notes will equal the sum of (i)
the yield on the 7 1/2% U.S. Treasury Note due November 15, 2024, as of the
Pricing Time, plus (ii) %.
Illustrative Examples and Simplified Formulas. What follows are (i) a series
of tables that illustrate application of the formulas to be used to determine
Reference Total Prices for the Old Securities and interest rates on the New
Securities and (ii) simplified formulas pursuant to which a Reference Total
Price for each issue of Old Securities can be determined for any given
Benchmark Treasury Yield assuming an Exchange Date of , 1995 (which will
be the Exchange Date for each Exchange Offer unless such Exchange Offer is
extended). The methodology used to determine the Reference Total Prices in the
following tables and based on which the simplified formulas were derived is
set forth in Schedule A hereto.
THE INFORMATION SET FORTH IN THE FOLLOWING TABLES IS FOR ILLUSTRATIVE
PURPOSES ONLY AND NO REPRESENTATION IS INTENDED WITH RESPECT TO THE ACTUAL
CONSIDERATION THAT MAY BE PAID PURSUANT TO THE EXCHANGE OFFERS. THE AMOUNT OF
CASH PAID AND THE INTEREST RATES ON THE NEW SECURITIES DELIVERED PURSUANT TO
THE EXCHANGE OFFERS MAY BE GREATER OR LESS THAN THAT DEPICTED IN THE FOLLOWING
TABLES DEPENDING ON THE ACTUAL BENCHMARK TREASURY YIELDS AS OF THE PRICING
TIME.
For each issue of Old Securities, the following table sets forth the
Benchmark Treasury Yield as of 4:00 p.m., New York City time, on , 1995
and the applicable fixed spread. The table also sets forth for each issue of
Old Securities the Reference Yield, the Reference Total Price and the amount
of cash consideration (in addition to the $1,000 principal amount of the
corresponding issue of New Securities) that would be received in exchange for
each $1,000 principal amount of such Old Securities accepted by the Company,
assuming (i) that the Benchmark Treasury Yields as of the Pricing Time are the
same as they were as of 4:00 p.m., New York City time, on , 1995 and (ii)
an Exchange Date of , 1995.
23
<PAGE>
FOR ILLUSTRATIVE PURPOSES ONLY
<TABLE>
<CAPTION>
BENCHMARK
TREASURY YIELD FIXED REFERENCE CASH
ISSUE AS OF / /95 SPREAD REFERENCE YIELD TOTAL PRICE CONSIDERATION
----- -------------- ------ --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Old 10 3/4% Notes....... % % % $ $
Old 10 1/4% Notes....... % % % $ $
Old 8 3/4% Debentures... % % % $ $
</TABLE>
For each issue of Old Securities, the following table sets forth the
Reference Yield and the amount of cash consideration (in addition to $1,000
principal amount of the corresponding issue of New Securities) that would be
received in exchange for each $1,000 principal amount of such Old Securities
accepted by the Company, assuming (i) that the Benchmark Treasury Yields as of
the Pricing Time are equal to certain hypothetical Benchmark Treasury Yields
and (ii) an Exchange Date of , 1995.
FOR ILLUSTRATIVE PURPOSES ONLY
<TABLE>
<CAPTION>
HYPOTHETICAL BENCHMARK
ISSUE TREASURY YIELD REFERENCE YIELD CASH CONSIDERATION
----- ---------------------- --------------- ------------------
<S> <C> <C> <C>
Old 10 3/4% Notes....... % % $
% % $
% % $
% % $
% % $
Old 10 1/4% Notes....... % % $
% % $
% % $
% % $
% % $
Old 8 3/4% Debentures... % % $
% % $
% % $
% % $
% % $
</TABLE>
For each issue of New Securities, the following table sets forth the
Benchmark Treasury Yield as of 4:00 p.m., New York City time, on , 1995
and the applicable fixed spread. The table also sets forth what the per annum
interest rate on such issue of New Securities would be, assuming that the
Benchmark Treasury Yields as of the Pricing Time are the same as they were as
of 4:00 p.m., New York City time, on , 1995.
FOR ILLUSTRATIVE PURPOSES ONLY
<TABLE>
<CAPTION>
BENCHMARK TREASURY YIELD
ISSUE AS OF / /95 FIXED SPREAD INTEREST RATE
----- ------------------------ ------------ -------------
<S> <C> <C> <C>
New 2005 Notes............. % % %
New 2000 Notes............. % % %
New 2025 Notes............. % % %
</TABLE>
For each issue of New Securities, the following table sets forth what the
per annum interest rate on such issue of New Securities would be, assuming
that the Benchmark Treasury Yields as of the Pricing Time are equal to certain
hypothetical Benchmark Treasury Yields.
24
<PAGE>
FOR ILLUSTRATIVE PURPOSES ONLY
<TABLE>
<CAPTION>
HYPOTHETICAL BENCHMARK
ISSUE TREASURY YIELD INTEREST RATE
----- ---------------------- -------------
<S> <C> <C>
New 2005 Notes............................ % %
% %
% %
% %
New 2000 Notes............................ % %
% %
% %
% %
New 2025 Notes............................ % %
% %
% %
% %
</TABLE>
Pursuant to the following simplified formulas, a Reference Total Price can
be determined for each issue of Old Securities for any given Reference Yield,
assuming an Exchange Date of June 1, 1995 (which will be the Exchange Date for
each Exchange Offer unless such Exchange Offer is extended). The simplified
formulas will not produce a correct Reference Total Price for any other
Exchange Date. The formulas are derived from the methodology set forth in
Schedule A. The reader is referred to the methodology set forth in Schedule A
which permits computations for various Exchange Dates.
"YLD" = Reference Yield, equal to the
Benchmark Treasury Yield plus the applicable
fixed spread, expressed as a decimal number.
OLD 10 3/4% NOTES
- 107.5 -
(1040 - -----)
107.5 YLD YLD 0.167
Reference Total Price = ----- + ------------ X (1 + ---)
YLD YLD 4 2
(1 + ---)
- 2 -
OLD 10 1/4% NOTES
- 102.5 -
(1038.44 - -----)
102.5 YLD YLD 0.256
Reference Total Price = ---- + --------------- X (1 + ---)
YLD YLD 8 2
(1 + --- )
- 2 -
OLD 8 3/4% DEBENTURES
- 87.5 -
(1000 - ----)
87.5 YLD YLD 0.422
Reference Total Price = ---- + --------------- X (1 + ---)
YLD YLD 12 2
1 + ( --- )
2
- -
During the term of the Exchange Offers, holders of Old Securities may obtain
current information regarding Benchmark Treasury Yields, Reference Yields,
Reference Total Prices and interest rates on the New Securities and other
information regarding the terms of the Exchange Offers from the Liability
Management Group at the Dealer Manager at (800) 558-3745 (toll free) or (212)
783-3738 (call collect).
25
<PAGE>
THE NEW SECURITIES
The New Securities to be delivered pursuant to the Exchange Offers will be
issued under the Company Indenture and will be unsecured obligations of the
Company. The New Securities will be unsubordinated senior obligations of the
Company and will rank pari passu with all existing and future unsecured and
unsubordinated senior indebtedness of the Company. See "Description of New
Securities."
THE CONSENT SOLICITATION
Concurrently with the Exchange Offers, the Company is soliciting Consents
from the holders of Old Securities to amend the 1992 Indenture under which the
Old 10 3/4% Notes were issued and the 1993 Indenture under which the Old 10
1/4% Notes and the Old 8 3/4% Debentures were issued. HOLDERS OF OLD
SECURITIES WHO TENDER IN AN EXCHANGE OFFER WILL BE REQUIRED, AS A CONDITION TO
A VALID TENDER, TO HAVE GIVEN THEIR CONSENT TO THE PROPOSED AMENDMENTS
CONTEMPLATED BY THE SOLICITATION. THE PROPER COMPLETION, EXECUTION AND
DELIVERY OF A LETTER OF TRANSMITTAL WITH RESPECT TO PARTICULAR OLD SECURITIES
WILL CONSTITUTE THE DELIVERY OF A CONSENT WITH RESPECT TO SUCH OLD SECURITIES.
WITHDRAWAL OF OLD SECURITIES WILL BE DEEMED A REVOCATION OF THE CONSENT TO
WHICH SUCH OLD SECURITIES RELATE. CONSENTS WILL BE IRREVOCABLE AS OF THE
EXPIRATION TIME. See "The Consent Solicitation" and "The Proposed Amendments."
Consents from holders of a majority in principal amount outstanding of an
issue of Old Securities (the "Requisite Consents") must be received in order
to amend the relevant indenture in the manner contemplated by the
Solicitation. Receipt of the Requisite Consents with respect to all three
issues of Old Securities is a condition to consummation of each Exchange Offer
by the Company. See "--Conditions to the Exchange Offers."
The Company will not make a separate payment for Consents delivered in the
Solicitation.
CALCULATIONS; INFORMATION
The Reference Total Price for a particular issue of Old Securities, which is
a price that includes accrued but unpaid interest to the Exchange Date, will
be determined by calculating, per $1,000 principal amount of such Old
Securities, the present value, using the appropriate Reference Yield, of (i)
the principal amount and premium, if any, payable at the applicable redemption
date (assuming such Old Securities were redeemed in full on such date) plus
(ii) all remaining payments of interest up to and including the applicable
redemption date. The Reference Total Price will be rounded to the nearest cent
per $1,000 principal amount of Old Securities. The methodology to be used in
calculating the Reference Total Price for each issue of Old Securities is set
forth in Schedule A hereto. An example of the application of this methodology
for each issue of Old Securities is set forth in Schedule B hereto. The
interest rate on each issue of New Securities will be determined by
calculating the sum of the applicable Benchmark Treasury Yield plus the
specified number of basis points. Each price and interest rate calculation
will be made using the relevant Benchmark Treasury Yield as of the Pricing
Time. The Exchange Date will be the settlement date for all Reference Total
Price calculations.
The Benchmark Treasury Yield on each Benchmark Treasury Security will be
calculated by the Dealer Manager in accordance with standard market practice,
based on the bid price for such Benchmark Treasury Security as of the Pricing
Time, as such bid price is displayed on the Garban Limited Quotation Screens
for U.S. Government Securities. If any relevant price is not available on a
timely basis on the Garban Limited Quotation Screens or is manifestly
erroneous, the relevant price information may be obtained from such other
quotation service as the Dealer Manager shall select in its sole discretion,
the identity of which shall be disclosed by the Dealer Manager to tendering
holders. Although the Benchmark Treasury Yields will be determined based
solely on the sources described above, information regarding the prices of
Benchmark Treasury Securities also may be found in The Wall Street Journal.
26
<PAGE>
As soon as practicable after the Pricing Time, but in any event before 9:00
a.m., New York City time, on the following business day, the Dealer Manager
will publicly announce by press release to the Dow Jones News Service: (i) for
each issue of Old Securities: the Benchmark Treasury Yield, the Reference
Yield, the Reference Total Price and the consideration to be received by
tendering holders in the event the relevant Exchange Offer is consummated and
(ii) for each issue of New Securities: the Benchmark Treasury Yield and the
per annum interest rate.
During the term of the Exchange Offers, holders of Old Securities can obtain
current information regarding Benchmark Treasury Yields, Reference Yields,
Reference Total Prices and interest rates on the New Securities and other
information regarding the terms of the Exchange Offers from the Liability
Management Group at the Dealer Manager at (800) 558-3745 (toll free) or (212)
783-3738 (call collect). In addition, the Dealer Manager intends to publish
information about the Exchange Offers, including the information described in
the preceding paragraph when available, on the MCM "CORPORATEWATCH" Service on
Telerate page 41962 and on Bloomberg under "Company News."
In the event any dispute arises with respect to any Benchmark Treasury
Yield, Reference Yield, Reference Total Price, interest rate on an issue of
New Securities or any quotation or calculation with respect to the Exchange
Offers, the Dealer Manager's determination shall be conclusive and binding
absent manifest error.
DEALER MANAGER MARKET ACTIVITY
The Dealer Manager currently plans to make a market in the New Securities
following the completion of the Exchange Offers and may buy and sell New
Securities on a "when and if issued" basis prior to the completion of the
Exchange Offers. However, there can be no assurance that the Dealer Manager
will engage in such activities or that any active market in the New Securities
will develop or be maintained.
EXPIRATION DATE; EXTENSIONS; TERMINATION; AMENDMENTS
The Exchange Offers will expire at 11:59 p.m., New York City time, on ,
, 1995 (the "Expiration Date"), subject to extension by the Company as
provided herein . In the event an Exchange Offer is extended, the term
"Expiration Date" with respect to such extended Exchange Offer shall mean the
date on which such Exchange Offer as so extended shall expire (11:59 p.m., New
York City time, on the Expiration Date sometimes being referred to herein as
the "Expiration Time").
The Company expressly reserves the right, in its sole discretion, subject to
applicable law, to (i) extend or terminate any of the Exchange Offers and not
accept for exchange any tendered Old Securities, if any of the conditions
specified in "--Conditions to the Exchange Offers" is not satisfied or waived,
(ii) waive any condition to any Exchange Offer and accept all Old Securities
tendered pursuant to such Exchange Offer, (iii) extend any Exchange Offer and
retain all Old Securities tendered pursuant to such Exchange Offer until the
expiration of such Exchange Offer, subject, however, to the withdrawal rights
of holders, see "--Withdrawal Rights," (iv) amend the terms of any Exchange
Offer and (v) modify the form of the consideration to be paid pursuant to any
Exchange Offer.
If the consideration offered with respect to any Exchange Offer is changed,
such Exchange Offer will remain open at least ten business days from the date
public notice of such change is given. However, in the event the Company has
not received the Requisite Consents with respect to an issue of Old Securities
as of the Expiration Time, the Company may extend the relevant Exchange Offer
for a period of less than ten business days, but not less than two business
days, and redetermine the Reference Total Price with respect to such issue of
Old Securities and the interest rate on the corresponding issue of New
Securities using the relevant Benchmark Treasury Yields as of 4:00 p.m., New
York City time, on the second business day prior to the extended Expiration
Date. However, no
27
<PAGE>
such extension of less than ten business days will occur unless the value of
the total consideration (cash plus the value of the New Securities) to be
received by a tendering holder increases as a result of such redetermination
of the relevant Reference Total Price and interest rate on the corresponding
New Securities.
Any extension, termination, or amendment will be followed as promptly as
practicable by a public announcement and notification of the Exchange Agent
and Dealer Manager thereof. In the case of any extension, a public
announcement will be issued prior to 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date of the
Exchange Offer or Exchange Offers subject to such extension. Without limiting
the manner in which the Company may choose to make any public announcement,
the Company shall have no obligations to publish, advertise or otherwise
communicate any such public announcement other than by release to the Dow
Jones News Service or otherwise as required by law. In the event of any
extension of an Exchange Offer, all Old Securities tendered pursuant to such
Exchange Offer and not subsequently withdrawn, will remain subject to, and
holders will continue to have withdrawal rights until the expiration of, such
Exchange Offer.
Every holder who tenders Old Securities of a particular issue and whose
tender is accepted, will receive the same consideration per $1,000 principal
amount of such Old Securities tendered.
EFFECT OF TENDER
Tendering holders of Old Securities that are exchanged in an Exchange Offer
will not be obligated to pay transfer taxes nor any fee or commission to the
Dealer Manager, with respect to the acquisition of their Old Securities by the
Company pursuant to the Exchange Offer. See "--Transfer Taxes." However, if
the tendering holder handles the transaction through his or her broker,
dealer, commercial bank, trust company or other institution, such holder may
be required to pay brokerage fees or commissions to such institution.
DISSENTERS' RIGHTS
Holders of Old Securities do not have any appraisal or dissenters' rights
under the Delaware General Corporation Law, the 1992 Indenture or the 1993
Indenture, in connection with the Exchange Offers.
ACCEPTANCE OF OLD SECURITIES TENDERED FOR EXCHANGE; DELIVERY OF NEW SECURITIES
Subject to the terms and conditions of the Exchange Offers, the Company will
purchase Old Securities by accepting such securities for exchange and in
consideration therefor will issue the appropriate New Securities and make the
appropriate cash payments. New Securities will be delivered and cash payments
made by check (in New York next day funds) on the fifth business day following
the Expiration Date (the "Exchange Date"). The Exchange Agent will act as
agent for the tendering holders for the purpose of receiving Old Securities
and transmitting payments and New Securities to such holders.
New Securities will be delivered only in book-entry form through DTC and
only to the DTC account of the tendering holder or the tendering holder's
custodian. Accordingly, a holder who tenders Old Securities must specify on
the applicable Letter of Transmittal the DTC participant to which New
Securities should be delivered and all necessary account information to effect
such delivery. Failure to provide such information will render such holder's
tender defective and the Company will have the right, which it may waive, to
reject such tender. The Company, the Exchange Agent and the Dealer Manager
shall not incur any liability for delivering New Securities in accordance with
any instructions provided by a tendering holder.
28
<PAGE>
Holders who anticipate tendering are urged to contact promptly a bank,
broker or other intermediary (that has the capability to hold securities
custodially through DTC) to arrange for receipt of any New Securities
delivered pursuant to the Exchange Offers and to obtain the information
necessary to provide the required DTC participant and account information on
the applicable Letter of Transmittal.
The Company shall be deemed to have accepted for exchange (and thereby to
have purchased) tendered Old Securities as, if and when the Company gives oral
or written notice to the Exchange Agent of the Company's acceptance of such
securities for exchange. Old Securities accepted for exchange by the Company
will be cancelled.
If Old Securities in a principal amount in excess of the principal amount
indicated as being tendered on the Letter of Transmittal are submitted, an Old
Security in principal amount equal to the excess principal amount over the
amount indicated as tendered in the Letter of Transmittal will be issued to
the tendering holder, at the Company's expense, in the same form in which such
security was tendered, as promptly as practicable following the expiration or
termination of the relevant Exchange Offer. If any tendered Old Securities are
not accepted for exchange because of an invalid tender, the occurrence of
certain other events set forth herein or otherwise, such Old Securities will
be returned, at the Company's expense, to the tendering holder thereof, as
promptly as practicable following the expiration or termination of the
relevant Exchange Offer.
PROCEDURES FOR TENDERING OLD SECURITIES AND GIVING CONSENTS
The GREEN Letter of Transmittal must be used to tender Old 10 3/4% Notes.
The YELLOW Letter of Transmittal must be used to tender Old 10 1/4% Notes. The
BLUE Letter of Transmittal must be used to tender Old 8 3/4% Debentures. If he
or she elects to do so, a holder may tender less than all Old Securities held
by such holder. Old Securities of any issue may be tendered only in
denominations of $1,000. Holders who wish to tender Old Securities from more
than one issue must complete a separate Letter of Transmittal with respect to
each issue of Old Securities tendered.
THERE ARE NO GUARANTEED DELIVERY PROCEDURES WITH RESPECT TO THE EXCHANGE
OFFERS.
THE PROPER COMPLETION, EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL
WITH RESPECT TO PARTICULAR OLD SECURITIES WILL CONSTITUTE THE GIVING OF A
CONSENT WITH RESPECT TO SUCH OLD SECURITIES.
All New Securities will be delivered only in book-entry form through DTC.
Accordingly, holders who anticipate tendering other than through DTC are urged
to contact promptly a bank, broker or other intermediary (that has the
capability to hold securities custodially through DTC) to arrange for receipt
of any New Securities delivered pursuant to the Exchange Offers and to obtain
the information necessary to complete the account information table in the
relevant Letter of Transmittal.
Tender of Old Securities Held in Physical Form. To tender Old Securities
held in physical form, a holder must (i) complete (including the required
information regarding delivery of New Securities through DTC) and sign the
applicable Letter of Transmittal in accordance with the instructions set forth
therein and (ii) deliver the properly completed and executed Letter of
Transmittal, together with any other documents required by the Letter of
Transmittal, and the Old Securities in physical form to the Exchange Agent at
the address set forth on the back cover page of this Prospectus prior to the
Expiration Time.
Tender of Old Securities Held Through a Custodian. To tender Old Securities
held by a custodian or other intermediary such as a brokerage (a "Custodian"),
the beneficial owner of the Old Securities must contact the Custodian and
direct the Custodian to tender such Old Securities in accordance with the
procedures set forth herein and in the applicable Letter of Transmittal.
If the Custodian holds such Old Securities in physical form, the Custodian
must follow the procedure set forth above under "--Tender of Old Securities
Held in Physical Form."
If the Custodian holds such Old Securities in book-entry form through DTC,
the Midwest Securities Trust Company or the Philadelphia Depository Trust
Company (collectively, the "Book-Entry Transfer
29
<PAGE>
Facilities"), to tender such Old Securities the Custodian must (i) effect a
book-entry transfer of all Old Securities to be tendered into the Exchange
Agent's account at such Book-Entry Transfer Facility prior to the Expiration
Time, (ii) complete (including the required information regarding delivery of
New Securities through DTC) and sign the applicable Letter of Transmittal in
accordance with the instructions set forth therein and (iii) deliver the
properly completed and executed Letter of Transmittal, together with any
documents required by the Letter of Transmittal, to the Exchange Agent at the
address set forth on the back cover page of this Prospectus prior to the
Expiration Time.
Book-Entry Delivery Procedures. The Exchange Agent will establish promptly
an account with respect to the Old Securities at each Book-Entry Transfer
Facility for purposes of the Exchange Offers. Any financial institution that
is a participant in a Book-Entry Transfer Facility may make a book-entry
delivery of Old Securities by causing such Book-Entry Transfer Facility to
transfer Old Securities into the Exchange Agent's account. However, although
delivery of Old Securities may be effected through book-entry transfer at a
Book-Entry Transfer Facility, a properly completed and executed Letter of
Transmittal, together with any documents required by the Letter of
Transmittal, must, in any case, be transmitted to, and received by, the
Exchange Agent at its address set forth on the back cover page of this
Prospectus prior to the Expiration Time. Old Securities will not be deemed
surrendered until the Letter of Transmittal is received by the Exchange Agent.
DELIVERY OF A LETTER OF TRANSMITTAL TO A BOOK-ENTRY TRANSFER FACILITY WILL NOT
CONSTITUTE VALID DELIVERY TO THE EXCHANGE AGENT.
Any holder whose Old Securities have been mutilated, lost, stolen or
destroyed will be responsible for obtaining replacement securities or for
arranging for indemnification with the Old Trustee. Holders may contact the
Information Agent for assistance with such matters.
IN ORDER FOR A TENDERING HOLDER TO BE ASSURED OF PARTICIPATING IN AN
EXCHANGE OFFER, SUCH HOLDER MUST TENDER OLD SECURITIES IN ACCORDANCE WITH THE
PROCEDURES SET FORTH HEREIN AND IN THE APPROPRIATE LETTER OF TRANSMITTAL PRIOR
TO THE EXPIRATION TIME. THE METHOD OF DELIVERY OF OLD SECURITIES AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING HOLDER. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED AND ENOUGH TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
LETTERS OF TRANSMITTAL AND OLD SECURITIES MUST BE SENT ONLY TO THE EXCHANGE
AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR OLD SECURITIES TO THE COMPANY,
THE OLD TRUSTEE, THE NEW TRUSTEE, THE INFORMATION AGENT OR THE DEALER MANAGER.
PROPER EXECUTION AND DELIVERY OF LETTERS OF TRANSMITTAL
In general, all signatures on a Letter of Transmittal or a notice of
withdrawal must be guaranteed by an Eligible Institution (as such term is
defined in the Letters of Transmittal); however, such signatures need not be
guaranteed if (a) the Letter of Transmittal is signed by the registered holder
of Old Securities tendered therewith or by a participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the
owner of Old Securities tendered therewith and such holder has not completed
the portion entitled "Special Issuance and Payment Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (b) such Old Securities
are tendered for the account of an Eligible Institution.
If the Letter of Transmittal is signed by the registered holder of the Old
Securities tendered thereby or a participant in a Book-Entry Transfer Facility
whose name appears on a security position listing with respect to the Old
Securities tendered thereby, the signature must correspond with the name as
written on the face of the Old Securities or on the security position listing,
respectively, without any change whatsoever. If any of the Old Securities
tendered thereby are held by two or more holders, all such holders must sign
the Letter of Transmittal. If any of the Old Securities tendered thereby are
registered in different names on different Old Securities, it will be
necessary to complete, sign and submit as many separate Letters of Transmittal
as there are different registrations.
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<PAGE>
If the Letter of Transmittal is signed by a person other than the registered
holder of Old Securities tendered thereby or a participant in a Book-Entry
Transfer Facility whose name appears on a security position listing with
respect to the Old Securities tendered thereby, the Old Securities must be
endorsed or accompanied by appropriate bond powers, in either case, signed
exactly as the name of the holder appears on the face of the Old Securities or
on the security position listing with respect thereto. If the Letter of
Transmittal or any Old Securities, proxy or bond power is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation
or other person acting in a fiduciary or representative capacity, such person
must so indicate when signing, and proper evidence satisfactory to the
Exchange Agent of the authority of such person so to act must be submitted.
New Securities will be delivered only in book-entry form through DTC and
only to the DTC account of the tendering holder or the tendering holder's
custodian. If cash payments for any Old Securities exchanged, or if Old
Securities not tendered or not exchanged are to be delivered to a person other
than the holder of the Old Securities tendered, or to an address other than
that of the holder of the Old Securities tendered, such holder should indicate
in the applicable box the person and/or address to which such payments or Old
Securities are to be delivered. If a cash payment or Old Securities not
tendered or not exchanged are to be issued to a person other than the holder
of the Old Securities tendered, the employer identification or social security
number of the person to whom issuance is to be made must be indicated on the
Letter of Transmittal. If Old Securities not tendered or not exchanged are to
be delivered to a person other than the holder of the Old Securities tendered,
the Old Securities must be endorsed or accompanied by appropriate instruments
of transfer, signed exactly as the name of the holder appears on the face of
the Old Securities or the security position listing with respect thereto, with
the signature on the certificates or instruments of transfer guaranteed by an
Eligible Institution. If no such instructions are given, any cash payments and
any Old Securities not tendered or not exchanged will be delivered to the
holder of the Old Securities tendered.
Because New Securities will be delivered only in book-entry form through
DTC, a holder who tenders Old Securities must specify on the applicable Letter
of Transmittal the DTC participant to which New Securities should be delivered
and all necessary account information to effect such delivery. Such DTC
participant must be either the tendering holder or a custodian for the
tendering holder. Failure to provide such information will render such
holder's tender defective and the Company will have the right, which it may
waive, to reject such tender. Holders who anticipate tendering other than
through DTC are urged to contact promptly a bank, broker or other intermediary
(that has the capability to hold securities custodially through DTC) to
arrange for receipt of any New Securities delivered pursuant to the Exchange
Offers and to obtain the information necessary to complete the account
information table in the applicable Letter of Transmittal.
No alternative, conditional, irregular or contingent tenders or consents
will be accepted. By executing the Letter of Transmittal (or facsimile
thereof), the tendering holder of Old Securities waives any right to receive
any notice of the acceptance for exchange or purchase, as the case may be, of
his or her Old Securities, except as otherwise provided herein.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Old Securities will be resolved by the
Company, whose determination shall be conclusive and binding. The Company
reserves the absolute right to reject any or all tenders that are not in
proper form or the acceptance of which may be, in the opinion of counsel for
the Company, unlawful. The Company also reserves the absolute right to waive
any condition of any Exchange Offer as set forth under "--Conditions to the
Exchange Offers" and any irregularities or conditions of tender as to
particular Old Securities. The Company's interpretation of the terms and
conditions of the Exchange Offers (including the instructions in the Letters
of Transmittal) shall be conclusive and binding.
Unless waived, any irregularities in connection with tenders must be cured
within such time as the Company shall determine. The Company, the Exchange
Agent, the Information Agent and the Dealer Manager shall not be under any
duty to give notification of defects in such tenders and shall not incur
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<PAGE>
liability for any failure to give such notification. Tenders of Old Securities
will not be deemed to have been made until such irregularities have been cured
or waived. Any Old Securities received by the Exchange Agent that are not
properly tendered and as to which the irregularities have not been cured or
waived will be returned by the Exchange Agent to the tendering holder, unless
otherwise provided in the Letters of Transmittal, as soon as practicable
following the Expiration Date.
CONDITIONS TO THE EXCHANGE OFFERS
Notwithstanding any other provisions of an Exchange Offer, or any extension
of such Exchange Offer, the Company will not be required to issue New
Securities or make any payments in respect of any properly tendered Old
Securities, and may terminate such Exchange Offer by oral or written notice to
the Exchange Agent and the holders of such Old Securities, or, at its option,
modify or otherwise amend such Exchange Offer with respect to such Old
Securities, if any of the following conditions has not been satisfied, prior
to or simultaneously with the completion of such Exchange Offer:
(a) receipt of the Requisite Consents with respect to all three issues of
Old Securities;
(b) there shall not have been any action taken or threatened, or any
statute, rule, regulation, judgment, order, stay, decree or injunction
promulgated, enacted, entered, enforced or deemed applicable to the
Exchange Offers, the Proposed Amendments contemplated by the Solicitation
or the exchange of Old Securities pursuant to the Exchange Offers (the
"Exchange"), by or before any court or governmental regulatory or
administrative agency or authority or tribunal, domestic or foreign, which
(i) challenges the making of the Exchange Offers, the Proposed Amendments
contemplated by the Solicitation or the Exchange, or might, directly or
indirectly, prohibit, prevent, restrict or delay consummation of the
Exchange Offers, the Proposed Amendments contemplated by the Solicitation
or the Exchange, or might otherwise adversely affect in any material manner
the Exchange Offers, the Proposed Amendments contemplated by the
Solicitation or the Exchange or (ii) in the sole judgment of the Company,
could materially adversely affect the business, condition (financial or
otherwise), income, operations, properties, assets, liabilities or
prospects of the Company and its subsidiaries, taken as a whole, or
materially impair the contemplated benefits of the Exchange Offers, the
Proposed Amendments contemplated by the Solicitation or the Exchange to the
Company or might be material to holders of Old Securities in deciding
whether to accept such Exchange Offers;
(c) there shall not have occurred or be likely to occur any event
affecting the business or financial affairs of the Company that, in the
sole judgment of the Company, would or might prohibit, prevent, restrict or
delay consummation of the Exchange Offers, the Proposed Amendments
contemplated by the Solicitation or the Exchange or that will, or is
reasonably likely to, materially impair the contemplated benefits of the
Exchange Offers, the Proposed Amendments contemplated by the Solicitation
or the Exchange to the Company or might be material to holders of Old
Securities in deciding whether to accept such Exchange Offers;
(d) there shall not have occurred (i) any general suspension of or
limitation on trading in securities on the NYSE or in the over-the-counter
market (whether or not mandatory), (ii) any significant adverse change in
the price of the Old Securities, (iii) a material impairment in the general
trading market for debt securities, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks by federal or
state authorities in the United States (whether or not mandatory), (v) a
commencement of a war, armed hostilities or other national or international
crisis directly or indirectly relating to the United States, (vi) any
limitation (whether or not mandatory) by any governmental authority on, or
other event having a reasonable likelihood of affecting, the extension of
credit by banks or other lending institutions in the United States or (vii)
any significant adverse change in United States securities or financial
markets generally, or in the case of any of the foregoing existing at the
time of the commencement of the Exchange Offers, a material acceleration or
worsening thereof; and
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<PAGE>
(e) the Old Trustee shall not have objected in any respect to, or taken
any action that could, in the sole judgment of the Company, adversely
affect the consummation of, any of the Exchange Offers, the Exchange or the
Company's ability to effect the Proposed Amendments contemplated by the
Solicitation, nor shall the Old Trustee have taken any action that
challenges the validity or effectiveness of the procedures used by the
Company in soliciting Consents (including the form thereof) or in making
the Exchange Offers or the Exchange.
If any of the foregoing conditions are not satisfied with respect to a
particular issue of Old Securities, the Company may (i) terminate the Exchange
Offer with respect to such issue of Old Securities and return such Old
Securities to the holders who tendered them; (ii) extend such Exchange Offer
and retain all tendered Old Securities until the expiration of the Exchange
Offer, subject, however, to the withdrawal rights of holders, see "--
Withdrawal Rights" and "--Expiration Date; Extensions; Termination;
Amendments"; or (iii) waive the unsatisfied conditions with respect to such
Exchange Offer and accept all Old Securities tendered therein.
The foregoing conditions are for the sole benefit of the Company and may be
waived by the Company, in whole or in part, in its sole discretion. Any
determination made by the Company concerning an event, development or
circumstance described or referred to above shall be conclusive and binding.
WITHDRAWAL AND REVOCATION RIGHTS
A tender of Old Securities may be withdrawn prior to the Expiration Time.
A holder of Old Securities who tendered Old Securities in physical form may
withdraw the Old Securities tendered by providing a written notice of
withdrawal (or facsimile thereof) to the Exchange Agent, at its address set
forth on the back cover page of this Prospectus, prior to the Expiration Time,
which notice must contain: (i) the name of the person who tendered the Old
Securities; (ii) a description of the Old Securities to be withdrawn; (iii)
the certificate numbers shown on the particular certificates evidencing such
Old Securities; (iv) the aggregate principal amount represented by such Old
Securities; (v) the signature of the holder of such Old Securities executed in
the same manner as the original signature on the Letter of Transmittal
(including a signature guarantee, if such original signature was guaranteed);
and (vi) if such Old Securities are owned by a new beneficial owner, evidence
satisfactory to the Company that the person withdrawing the tender has
succeeded to the beneficial ownership of the Old Securities.
If a beneficial owner of Old Securities tendered through a Custodian and
wishes to withdraw the Old Securities tendered, such beneficial owner must
contact the Custodian and direct the Custodian to withdraw such Old Securities
in accordance with the procedures set forth herein. In order to withdraw such
Old Securities the Custodian must provide a written notice of withdrawal (or
facsimile thereof) to the Exchange Agent, at its address set forth on the back
cover page of this Prospectus, prior to the Expiration Time, which notice must
contain: (i) the name of the person who tendered the Old Securities; (ii) a
description of the Old Securities to be withdrawn; (iii) the certificate
numbers shown on the particular certificates evidencing such Old Securities
(if Old Securities were tendered in physical form); (iv) the aggregate
principal amount represented by such Old Securities; and (v) if such Old
Securities are owned by a new beneficial owner, evidence satisfactory to the
Company that the person withdrawing the tender has succeeded to the beneficial
ownership of the Old Securities. If the Old Securities were tendered by book-
entry transfer, the Custodian also must debit the Exchange Agent's account at
the Book-Entry Transfer Facility through which the tender was made of all Old
Securities to be withdrawn.
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<PAGE>
A PURPORTED NOTICE OF WITHDRAWAL WHICH LACKS ANY OF THE REQUIRED INFORMATION
WILL NOT BE AN EFFECTIVE WITHDRAWAL OF A TENDER PREVIOUSLY MADE. TENDERS OF
OLD SECURITIES MAY NOT BE WITHDRAWN AFTER THE EXPIRATION TIME.
Holders who have tendered in an Exchange Offer will continue to have
withdrawal rights following any extension of such Exchange Offer. Any
permitted withdrawals of tenders of Old Securities may not be rescinded, and
any Old Securities so withdrawn will thereafter be deemed not validly tendered
for purposes of the Exchange Offer and the holder thereof will be deemed to
have rejected the Exchange Offer with respect to the withdrawn Old Securities.
However, withdrawn Old Securities may be re-tendered prior to the Expiration
Time by following the procedures for tendering.
THE WITHDRAWAL OF TENDERED OLD SECURITIES WILL BE DEEMED TO BE A REJECTION
OF THE RELEVANT EXCHANGE OFFER AND A REVOCATION OF THE CONSENTS TO WHICH SUCH
TENDERED OLD SECURITIES RELATE.
All questions as to the validity (including time of receipt) of notices of
withdrawal will be determined by the Company, whose determination will be
conclusive and binding. None of the Company, the Exchange Agent, the Dealer
Manager or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification.
FUTURE OFFERS
The Company reserves the right, in its sole discretion, to purchase or make
offers for any Old Securities that remain outstanding subsequent to the
Exchange Date. The terms of any such purchase or offer could differ from the
terms of the Exchange Offers.
TRANSFER TAXES
The Company will pay all transfer taxes, if any, applicable to the transfer
and sale of Old Securities to it pursuant to the Exchange Offers. If, however,
New Securities and/or substitute Old Securities for amounts not tendered or
not exchanged are to be delivered to, or are to be registered in the name of,
any person other than the registered holder of Old Securities tendered, or if
tendered Old Securities are registered in the name of any person other than
the person signing the Letter of Transmittal, or if a transfer tax is imposed
for any reason other than the transfer or sale of Old Securities to the
Company pursuant to an Exchange Offer, the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) shall be
payable by the tendering holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with the appropriate Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder and/or withheld from any payments due with respect to the Old
Securities tendered by such holder.
EXCHANGE AGENT
Chemical Bank has been appointed Exchange Agent for the Exchange Offers. The
Company will pay the Exchange Agent reasonable and customary fees for its
services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith. Letters of Transmittal and all correspondence in
connection with the Exchange Offers should be sent or delivered to the
Exchange Agent at the address set forth on the back cover page of this
Prospectus.
INFORMATION AGENT
D. F. King & Co., Inc. has been appointed Information Agent for the Exchange
Offers. The Company will pay the Information Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith.
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<PAGE>
Requests for assistance or additional copies of this Prospectus or the
Letters of Transmittal may be directed to the Information Agent at the address
and telephone number set forth on the back cover page of this Prospectus.
Holders of Old Securities may also contact the Dealer Manager or their broker,
dealer, commercial bank or trust company for assistance concerning the
Exchange Offers.
DEALER MANAGER
The Company has engaged Salomon Brothers Inc to act as Dealer Manager in
connection with the Exchange Offers. Any holder who has questions concerning
the terms of the Exchange Offers or who would like current information
regarding Benchmark Treasury Yields, Reference Yields, Reference Total Prices
or interest rates on the New Securities may contact the Liability Management
Group at the Dealer Manager at (800) 558-3745 (toll free) or (212) 783-3738
(call collect) or at the address set forth on the back cover page of this
Prospectus.
The Company has agreed to pay the Dealer Manager a fee for its services and
to reimburse the Dealer Manager for its reasonable out-of-pocket expenses,
including reasonable fees and expenses of legal counsel, and the Company has
agreed to indemnify the Dealer Manager against certain liabilities, including
certain liabilities under the federal securities laws, in connection with the
Exchange Offers. In the past, the Dealer Manager has provided other investment
banking and financial advisory services to the Company.
The Dealer Manager currently plans to make a market in the New Securities
following the completion of the Exchange Offers and may buy and sell New
Securities on a "when and if issued basis" prior to the completion of the
Exchange Offers. However, there can be no assurance that the Dealer Manager
will engage in such activities or that any active market in the New Securities
will develop or be maintained. See "--Dealer Manager Market Activity" and
"Investment Considerations."
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<PAGE>
MARKET AND TRADING INFORMATION
The Old 10 3/4% Notes and Old 8 3/4% Debentures are listed and traded on the
NYSE. The following table sets forth the high and low closing sales prices on
the NYSE for the Old 10 3/4% Notes and Old 8 3/4% Debentures, respectively,
for the periods indicated, as reported by BLOOMBERG FINANCIAL MARKETS.
<TABLE>
<CAPTION>
OLD 10 3/4% NOTES HIGH LOW
- ----------------- -------- --------
<S> <C> <C>
1995:
April 1, 1995 through April 27, 1995........................ 110% 109 1/4%
First Quarter............................................... 109 5/8 105 3/8
1994:
Fourth Quarter.............................................. 109 101 1/2
Third Quarter............................................... 104 3/4 101 1/4
Second Quarter.............................................. 106 102
First Quarter............................................... 112 3/4 105
1993:
Fourth Quarter.............................................. 112 108 3/4
Third Quarter............................................... 111 1/4 109 5/8
Second Quarter.............................................. 110 1/2 106 5/8
First Quarter............................................... 108 3/4 105 7/8
<CAPTION>
OLD 8 3/4% DEBENTURES HIGH LOW
- --------------------- -------- --------
<S> <C> <C>
1995:
April 1, 1995 through April 27, 1995........................ 103 1/2% 101 1/2%
First Quarter............................................... 102 1/2 95 1/2
1994:
Fourth Quarter.............................................. 97 3/4 93
Third Quarter............................................... 93 7/8 88 1/2
Second Quarter.............................................. 95 1/4 90
First Quarter............................................... 103 5/8 90
1993:
Fourth Quarter.............................................. 104 100 3/8
Third Quarter............................................... 102 1/8 99 5/8
Second Quarter.............................................. 100 1/8 99
</TABLE>
On April 27, 1995, the last full trading day before the Registration
Statement was filed, the reported closing sales price on the NYSE for the Old
8 3/4% Debentures was 103%. On April 26, 1995, the last full trading day
before the Registration Statement was filed on which a trade with respect to
the Old 10 3/4% Notes was reported on the NYSE, the reported closing sales
price on the NYSE was 109 7/8%. Although the Old 10 3/4% Notes and Old 8 3/4%
Debentures are listed and traded on the NYSE, the over-the-counter market, not
the NYSE, is the principal market for the Old 10 3/4% Notes and Old 8 3/4%
Debentures. Accordingly, the information provided above with respect to the
NYSE closing sales prices does not reflect the prices at which Old 10 3/4%
Notes and Old 8 3/4% Debentures were traded in their principal market during
the periods indicated, which prices may have been different than those on the
NYSE.
The Old 10 1/4% Notes are traded only in the over-the-counter market. On
April 27, 1995, the last full trading day before the Registration Statement
was filed, the closing bid price for the Old 10 1/4% Notes was 111.58% as
reported by BLOOMBERG FINANCIAL MARKETS. The Old 10 3/4% Notes were issued on
May 1, 1992, the Old 10 1/4% Notes on May 5, 1994 and the Old 8 3/4%
Debentures on March 30, 1993.
There can be no assurance regarding the prices at which the Old Securities
may trade during and following the Exchange Offers. See "Investment
Considerations." HOLDERS ARE URGED TO OBTAIN CURRENT INFORMATION WITH RESPECT
TO THE MARKET PRICES OF THE OLD SECURITIES.
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<PAGE>
ACCOUNTING TREATMENT OF EXCHANGE OFFERS
The Exchange will be accounted for by the Company as an extinguishment of
debt as provided for under generally accepted accounting principles. The
Company expects to record an extraordinary loss in connection with the
Exchange in the period the Exchange is consummated.
THE CONSENT SOLICITATION
Concurrently with the Exchange Offers, the Company is soliciting Consents as
follows: (i) from the holders of the Old 10 3/4% Notes, Consents to certain
amendments to the 1992 Indenture, pursuant to which the Old 10 3/4% Notes were
issued, (ii) from the holders of the Old 10 1/4% Notes, Consents to certain
amendments, with respect to the Old 10 1/4% Notes, to the 1993 Indenture,
pursuant to which the Old 10 1/4% Notes were issued and (iii) from the holders
of the Old 8 3/4% Debentures, Consents to certain amendments, with respect to
the Old 8 3/4% Debentures, to the 1993 Indenture, pursuant to which the Old 8
3/4% Debentures were issued. Each of the 1992 Indenture and the 1993 Indenture
sometimes is referred to herein as the "Indenture" and they sometimes are
referred to collectively herein as the "Indentures."
Prior to the announcement of the acquisition of Healthtrust by the Company,
the Old Securities were rated below investment grade at B1 by Moody's and B by
S&P. The Old Securities currently are subject to terms and restrictive
covenants that are, in general, typical of debt securities with similar
ratings. Following the Company's acquisition of Healthtrust, the Company,
whose debt securities as of the date hereof are rated investment grade at A3
by Moody's and BBB+ by S&P, became a co-obligor with Healthtrust with respect
to the Old Securities. As of the date hereof, each of Moody's and S&P has
raised its rating with respect to the Old Securities to investment grade at
Baa1 by Moody's and BBB by S&P. Pursuant to the Solicitation, the Company is
proposing parallel amendments (the "Proposed Amendments") to the 1992
Indenture and the 1993 Indenture in order to make the covenants and certain
other terms in these Indentures consistent with those that currently apply to
the Company and its subsidiaries with respect to the Company's existing debt
securities and that will apply to the Company and its subsidiaries with
respect to the New Securities. It should be noted, however, that the ratings
given the Old Securities should be evaluated independently from similar
ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision
or withdrawal at any time by the assigning rating agency. Accordingly, there
can be no assurance that the Old Securities, or any of the Company's debt
securities, will continue to be rated investment grade in the future.
The Proposed Amendments as contemplated by the Solicitation would, among
other things, eliminate the covenants in each Indenture that restrict the
incurrence of Indebtedness and the making of Restricted Payments (as each such
term is defined in the Indentures) by an Obligor and its subsidiaries and
would replace those covenants with covenants (i) limiting the ability of an
Obligor and certain of its subsidiaries to mortgage or pledge, or engage in
sale and lease-back transactions with respect to, certain hospital properties
and (ii) restricting the issuance of preferred stock and the incurrence of
indebtedness by certain subsidiaries of an Obligor. In addition, the Company
proposes to (i) make the provisions in the each Indenture governing
consolidations, mergers and asset sales less restrictive and (ii) eliminate
the provisions in each Indenture that require that, in the event of a Change
of Control and a Rating Decline (as each such term is defined in the
Indentures), the Old Securities be repurchased at par at the option of
holders. Although the resulting covenants and terms would be substantially
less restrictive than those currently set forth in the Indentures, they would
be consistent with those of the Company's existing debt securities and the New
Securities. See "The Proposed Amendments" and "Investment Considerations."
Requisite Consents must be received in order to adopt the Proposed
Amendments to the relevant Indenture with respect to an issue of Old
Securities. The Proposed Amendments will be adopted with respect to a
particular issue of Old Securities only upon consummation of the Exchange
Offer with respect to such issue. If the Proposed Amendments are adopted with
respect to an issue of Old
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<PAGE>
Securities, then each non-exchanging holder will be bound by the Proposed
Amendments even though such holder did not consent to the Proposed Amendments.
As of the date hereof, there are $500,000,000 aggregate principal amount of
Old 10 3/4% Notes outstanding, $200,000,000 aggregate principal amount of Old
10 1/4% Notes outstanding and $300,000,000 aggregate principal amount of Old 8
3/4% Debentures outstanding.
HOLDERS OF OLD SECURITIES WHO TENDER INTO AN EXCHANGE OFFER WILL BE
REQUIRED, AS A CONDITION TO A VALID TENDER, TO HAVE GIVEN THEIR CONSENT TO THE
PROPOSED AMENDMENTS WITH RESPECT TO SUCH ISSUE OF OLD SECURITIES. THE PROPER
COMPLETION, EXECUTION AND DELIVERY OF A LETTER OF TRANSMITTAL WITH RESPECT TO
PARTICULAR OLD SECURITIES WILL CONSTITUTE THE DELIVERY OF A CONSENT WITH
RESPECT TO SUCH OLD SECURITIES. WITHDRAWAL OF OLD SECURITIES WILL BE DEEMED A
REVOCATION OF THE CONSENT TO WHICH SUCH OLD SECURITIES RELATE. CONSENTS WILL
BE IRREVOCABLE AS OF THE EXPIRATION TIME. THE COMPANY WILL MAKE NO SEPARATE
PAYMENT FOR CONSENTS DELIVERED IN THE SOLICITATION.
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<PAGE>
THE PROPOSED AMENDMENTS
The 1992 Indenture and the 1993 Indenture contain substantially similar
covenants and terms. What follows are summaries of the covenants and terms
proposed to be eliminated from, and the covenants and terms proposed to be
added to, each Indenture pursuant to the Solicitation. Each summary is
followed by a summary of related definitions. The summaries do not purport to
be complete and are qualified in their entirety by reference to the 1992
Indenture, the 1993 Indenture, the form of Supplemental Indenture to the 1992
Indenture to be executed by the Company, Healthtrust and the Old Trustee, in
the event the Requisite Consents with respect to the Old 10 3/4% Notes are
obtained, and the form of Supplemental Indenture to the 1993 Indenture to be
executed by the Company, Healthtrust and the Old Trustee, in the event the
Requisite Consents with respect to the Old 10 1/4% Notes and/or Old 8 3/4%
Debentures are obtained. The forms of the Supplemental Indentures have been
filed with the Commission as an exhibit to the Registration Statement of which
this Prospectus is a part. The term "Obligor" as used below refers to each of
the Company and Healthtrust as an obligor under the Indentures.
SUMMARY OF PROVISIONS TO BE ELIMINATED
Pursuant to the Solicitation, the Company is proposing to eliminate the
following from each Indenture:
Limitation on Indebtedness. Each Indenture currently provides that the
Obligor will not, and will not permit any subsidiary to, directly or
indirectly, incur, assume, guarantee or otherwise become liable for (each such
action, an "incurrence") the payment of any Indebtedness unless, after giving
effect thereto, the Obligor's Fixed Charge Coverage Ratio on a pro forma basis
for its last four completed fiscal quarters, taken as a whole (calculated on
the assumptions that (i) such Indebtedness and the application of the proceeds
thereof and (ii) any other Indebtedness incurred, modified or repaid by the
Obligor or any subsidiary and the application of the proceeds thereof and
(iii) any acquisition or disposition by the Obligor or any subsidiary of
assets in excess of $25.0 million, in each case since the end of such last
four completed fiscal quarters, had been incurred, modified, repaid,
consummated or applied, as the case may be, on the first day of such four-
quarter period) would have been greater than 2.25 to 1; provided, however,
that the foregoing does not restrict the incurrence of Permitted Indebtedness.
(Section 1005 of the 1992 Indenture; Section 5.06 of the 1993 Indenture)
Limitation on Restricted Payments. Each Indenture currently provides that
the Obligor will not, directly or indirectly, declare or pay any dividend or
make any distribution in respect of its capital stock, or make or permit any
subsidiary to make any payment on account of the purchase, redemption or other
acquisition or retirement for value of any capital stock of the Obligor or any
affiliate of the Obligor, or any warrants, rights or options to purchase such
capital stock, or make or permit any subsidiary to make any Investment (all of
the foregoing other than any such action that is a Permitted Payment, being
collectively referred to as "Restricted Payments"), unless (a) at the time of
and after giving effect to the proposed Restricted Payment, no default or
event of default under the Indenture shall have occurred and be continuing and
(b) at the time of and after giving effect to the proposed Restricted Payment,
the aggregate amount of all Restricted Payments made on or after March 1, 1992
shall not exceed the sum of (i) 50% of the Consolidated Net Income of the
Obligor for the period (taken as one accounting period) from and including
March 1, 1992 to the last day of the fiscal quarter preceding the date of the
proposed Restricted Payment, plus (ii) the aggregate net proceeds, including
the fair market value of property other than cash, received by the Obligor
from the issuance or sale (other than to a subsidiary) on or after March 1,
1992, of shares of its capital stock (other than Redeemable Stock) or
warrants, options or rights to purchase such capital stock (other than
Redeemable Stock), plus (iii) the aggregate net proceeds received by the
Obligor from the issue or sale (other than to a subsidiary) on or after March
1, 1992, of any debt securities evidencing Indebtedness or Redeemable Stock,
which thereafter have been converted into or exchanged for capital stock
(other than Redeemable Stock) of the Obligor.
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The foregoing, however, does not prohibit the following Restricted Payments:
(i) the payment of any dividend within 60 days after the date of declaration
thereof, if such declaration complied with the provisions of the Indenture on
the date of such declaration, (ii) the redemption, repurchase or other
acquisition or retirement of any shares of any class of capital stock of the
Obligor or any subsidiary in exchange for or out of the proceeds of a
substantially concurrent issuance and sale (other than to a subsidiary) of,
shares of capital stock of the Obligor, (iii) the payment of dividends on the
Obligor's capital stock, of up to 6% per annum of the aggregate net proceeds
received by the Obligor in any public offerings of capital stock, and (iv) the
purchase or redemption of shares of capital stock, options to purchase shares
of capital stock, or stock appreciation rights of the Obligor or any
subsidiary issued pursuant to certain compensation, incentive or benefit
plans. The Indentures provide that Restricted Payments described in this
paragraph shall reduce the amount that would otherwise be available for
Restricted Payments under the test described in the preceding paragraph.
(Section 1006 of the 1992 Indenture; Section 5.07 of the 1993 Indenture)
Limitation on Certain Other Subordinated Indebtedness. Each Indenture
currently provides that the Obligor shall not incur or assume any other
subordinated Indebtedness unless such Indebtedness is subordinate in right of
payment to, or ranks pari passu with, the Old Securities. However, each
Indenture permits the Obligor to incur other subordinated Indebtedness that is
not subordinate in right of payment, or does not rank pari passu with, the Old
Securities if such Indebtedness is assumed in connection with any
consolidation, merger or sale of assets permitted under the Indenture.
(Section 1004 of the 1992 Indenture, Section 5.05 of the 1993 Indenture)
Purchase of Securities upon Change of Control Triggering Event. Each
Indenture currently provides that upon the occurrence of both a Change of
Control and a Rating Decline (together a "Change of Control Triggering Event")
each holder of Old Securities has the right to require the repurchase of such
holder's Old Securities in whole or in part at a purchase price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest. In general, given that the Old Securities constitute subordinated
debt, any other Indebtedness which is senior to the Old Securities and would
by its terms be accelerated upon the purchase of the Old Securities after the
occurrence of a Change of Control Triggering Event would have to be repaid
prior to the repurchase of the Old Securities. (Section 1010 of the 1992
Indenture; Section 5.08 of the 1993 Indenture)
Consolidations, Mergers and Sale of Assets. Each Indenture currently
provides that an Obligor may not consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of its assets
substantially as an entirety to, any person, unless: (i) either (a) the
Obligor shall be the continuing corporation or (b) the person (if other than
the Obligor) formed by such consolidation or into which the Obligor is merged
or the person that acquires by conveyance, transfer or lease the properties
and assets of the Obligor substantially as an entirety shall be a corporation,
partnership or trust organized and validly existing under the laws of the
United States or any State thereof or the District of Columbia, and shall
expressly assume, by a supplemental indenture, the due and punctual payment of
the principal of, and premium, if any, and interest on the relevant issue of
Old Securities and the performance and observance of every covenant of the
Indenture on the part of the Obligor to be performed or observed; (ii)
immediately thereafter, the Obligor or such person (a) shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Obligor immediately prior to such transaction and (b) could incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under
"Limitation on Indebtedness" described above; (iii) immediately thereafter, no
event of default (and no event which, after notice or lapse of time, or both,
would become an event of default) shall have occurred and be continuing; and
(iv) certain other conditions are satisfied. (Section 801 of the 1992
Indenture; Section 10.01 of the 1993 Indenture)
The following definitions apply to the provisions proposed to be eliminated
from each Indenture:
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"Change of Control" means such time as (i) a "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than one of
the Obligor's employee benefit plans, (A) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 50%, in the case of
the 1993 Indenture, or 35%, in the case of the 1992 Indenture, of the total
voting rights attaching to the then outstanding voting stock of the Obligor or
(B) has the right or the ability by voting right, contract or otherwise to
elect or designate for election a majority of the entire board of directors of
the Obligor; or (ii)(A) the Obligor consolidates with or merges into any other
person or conveys, transfers or leases all or substantially all of its assets
to any person or (B) any person merges into the Obligor, in either event
pursuant to a transaction in which voting stock of the Obligor representing
more than 50%, in the case of the 1993 Indenture, and 35%, in the case of the
1992 Indenture, of the total voting rights of the Obligor outstanding
immediately prior to the effectiveness thereof is reclassified or changed into
or exchanged for cash, securities or other property.
"Consolidated Capital Expenditure Indebtedness" means (i) any Indebtedness
of the Obligor and its subsidiaries issued to finance the purchase or
construction of any assets acquired (other than from affiliates) or
constructed after the date of the Indenture to the extent the purchase or
construction prices for such assets are or should be included in "property,
plant or equipment" in the consolidated financial statements of the Obligor
and its subsidiaries and (ii) to the extent not covered by clause (i), any
Indebtedness of the Obligor and its subsidiaries issued to finance the
acquisition (by purchase or otherwise) of the business, property or fixed
assets of, or other evidence of beneficial ownership of, any person.
"Consolidated Interest Expense" means for any period, without duplication,
the sum of (a) the aggregate of the interest expense of the Obligor and its
consolidated subsidiaries for such period plus (b) net payments in respect of
interest rate swap agreements.
"Consolidated Net Income" means for any period the consolidated net income
(or loss) of the Obligor and its consolidated subsidiaries (excluding any
income (or loss) from any person not controlled by the Obligor or any
subsidiary other than cash dividends or distributions received from such
person) adjusted by excluding (a) any gain (or loss) realized upon the
termination of any employee pension plan, (b) net extraordinary gains or net
extraordinary losses, (c) net gains or losses in respect of dispositions of
assets other than in the ordinary course of business, (d) expenses incurred in
or relating to periods prior to March 1, 1992, relating to Healthtrust's
Employee Stock Ownership Plan, as amended from time to time, and (e) any
deferred compensation or other charge relating to or arising out of
Healthtrust's recapitalization completed on December 19, 1991.
"Consolidated Net Worth" means for any date of determination the sum of the
capital stock and additional paid-in-capital plus retained earnings (or minus
accumulated deficit) of the Obligor and its consolidated subsidiaries, less
amounts attributable to Redeemable Stock.
Consolidated Non-cash Charges" means for any period, the aggregate
depreciation, amortization and other non-cash charges (other than reserves or
expenses established in anticipation of future cash requirements such as
reserves for taxes and uncollectible accounts) of the Obligor and its
consolidated subsidiaries, provided, that (i) any charges which are not
included for the purpose of determining Consolidated Net Income shall be
excluded from Consolidated Non-cash Charges and (ii) any charges which are
included for the purpose of determining Consolidated Interest Expense or
Consolidated Tax Expense shall be excluded from Consolidated Non-cash Charges.
"Consolidated Tax Expense" means for any period the aggregate of the tax
expense of the Obligor and its consolidated subsidiaries for such period.
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"Fixed Charge Coverage Ratio" means for any period the ratio of (a) the sum
of (without duplication) Consolidated Net Income, Consolidated Interest
Expense, Consolidated Tax Expense and Consolidated Non-cash Charges for such
period, to (b) Consolidated Interest Expense for such period.
"Healthcare Venture" means a person at least a majority of whose revenues
result from healthcare related businesses or facilities (including, without
limitation, a physician).
"Indebtedness" means, without duplication, (a) any liability of any person
(1) for borrowed money, or under any reimbursement obligation relating to a
letter of credit, or (2) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with
the acquisition of any businesses, properties or assets of any kind (other
than a trade payable or a current liability arising in the ordinary course of
business), or (3) for the payment of money relating to a capitalized lease
obligation; (b) all Redeemable Stock valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; and (c)
any liability of others described in the preceding clauses (a) or (b) that the
person has guaranteed or that is otherwise its legal liability.
"Investment" means (other than accrued and unpaid interest in respect of any
advance, loan or other extension of credit) any advance, loan, account
receivable or other extension of credit (other than in the ordinary course of
business) or any capital contribution to, any purchase or ownership of any
securities of, or any bank accounts with or guarantee of any Indebtedness or
other obligations of, any person. However, "Investment" does not include the
repayment or the purchase, repurchase, retirement, redemption or other
acquisition by the Obligor or any subsidiary of any Indebtedness of the
Obligor or any subsidiary.
"Permitted Indebtedness" means (a) Indebtedness of the Obligor or any
subsidiary outstanding on the date of the Indenture, (b) Indebtedness of the
Obligor pursuant to the Old Securities, (c) Indebtedness (not to exceed the
stated aggregate commitment thereunder) under a certain credit agreement of
Healthtrust, (d) certain obligations pursuant to interest rate and currency
swap agreements, (e) certain renewals, extensions, substitutions, refinancings
or replacements of any Indebtedness described in clauses (a), (b), (c) and (d)
of this definition, (f) intercompany debt obligations, (g) Consolidated
Capital Expenditure Indebtedness in an amount not to exceed $100.0 million
during the fiscal year ending August 31, 1993 and $50.0 million during any
fiscal year thereafter, provided that any amounts not used in any fiscal year
may be used in a subsequent year; provided, however, that Consolidated Capital
Expenditure Indebtedness permitted to be incurred under this clause (g) may
not exceed $250 million in the aggregate during the term of the Indenture, (h)
Physician Support Obligations, (i) Indebtedness arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Obligor or any subsidiary,
incurred or assumed in connection with the disposition of any stock, business
or assets of the Obligor, a subsidiary or any Healthcare Venture, other than
guarantees or similar credit support by the Obligor of Indebtedness incurred
by any person acquiring all or any portion of such business, assets,
subsidiary or Healthcare Venture for the purpose of financing such
acquisition; provided that the maximum aggregate liability in respect of all
such Indebtedness in the nature of such guarantees shall at no time exceed the
gross proceeds actually received from the sale of such business, assets,
subsidiary or Healthcare Venture, (j) Indebtedness consisting of deferred
payment obligations resulting from the adjudication or settlement of any claim
or litigation in an amount not to exceed $50 million in the aggregate during
the term of the Indenture, (k) Indebtedness evidenced by (i) standby letters
of credit which are issued for the purpose of supporting the Obligor's,
subsidiaries' and any Healthcare Venture's insurance and self-insurance
obligations (including to secure workers' compensation and similar insurance
coverages) and (ii) other standby letters of credit not to exceed $50 million
in the aggregate at any time, (l) Indebtedness evidenced by trade letters of
credit incurred in the ordinary course of business which are to be repaid in
full not more than one year after the date on which such Indebtedness is
originally
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incurred to finance the purchase of goods and supplies by the Obligor or a
subsidiary, not to exceed $50 million in the aggregate at any time, (m)
Indebtedness owed to a Healthcare Venture incurred in the ordinary course of
business consistent with the Obligor's cash management practices,
(n) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in
the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business; provided that such Indebtedness is extinguished
within three business days of incurrence, (o) any guaranty by the Obligor or
any subsidiary of Indebtedness under certain enumerated credit agreements and
(p) Indebtedness of the Obligor, in addition to that described in clauses (a)
through (o) of this definition of "Permitted Indebtedness," not in excess of
$250 million aggregate principal amount outstanding at any time.
"Permitted Investments" means purchases of (i) readily marketable
obligations of or obligations guaranteed by the United States of America or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, (ii) readily marketable direct obligations issued by
any state of the United States of America or any political subdivision or
public instrumentality thereof having the highest rating obtainable from
either Moody's or S&P, (iii) commercial paper or privately placed unsecured
general obligations of a corporation, whether redeemable at the Obligor's
demand for next day settlement or otherwise; provided that the issuing
corporation's commercial paper has, at the time of purchase by the Obligor of
such commercial paper or other obligation, a rating in one of the two highest
rating categories of Moody's or S&P, (iv) certificates of deposit, bankers'
acceptances and deposit accounts, and time deposits (A) in the ordinary course
of business or (B) with commercial banks of recognized standing chartered in
the United States of America or Canada with capital, surplus and undivided
profits aggregating in excess of $125,000,000 or foreign commercial banks with
capital, surplus and undivided profits aggregating in excess of $250,000,000
or (v) shares of money market funds that invest solely in Permitted
Investments of the kind described in clauses (i) through (iv) above.
"Permitted Payments" means (i) Restricted Payments, other than Restricted
Payments permitted by Section 1006(b) of the 1992 Indenture or Section 5.07(b)
of the 1993 Indenture, as the case may be, made after the date of the
Indenture in an aggregate amount not to exceed $100 million; provided, that,
at the time of and after giving effect to the proposed Restricted Payment, the
Obligor could incur at least $1.00 of additional Indebtedness pursuant to the
"Limitation on Indebtedness" covenant described above, (ii) Restricted
Payments in the form of dividends or distributions on shares of capital stock
of the Obligor in each case solely in shares of capital stock of the Obligor
or in warrants, rights or options to purchase such capital stock, (iii) any
dividend or other distribution payable to the Obligor or a subsidiary, (iv)
any contractual obligation of the Obligor or any subsidiary, existing on the
date of the Indenture, to make a Restricted Payment and such Restricted
Payment when made, (v) Investments existing on the date of the Indenture and
any renewal or reclassification of any such Investment, (vi) guarantees by the
Obligor or a subsidiary resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business, (vii) the
making of any Permitted Investment by the Obligor or any subsidiary, (viii)
Investments by any qualified or non-qualified benefit plan established by the
Obligor, (ix) in the event the Obligor shall establish a subsidiary for the
purpose of insuring the healthcare businesses or facilities owned or operated
by the Obligor, any subsidiary, any Healthcare Venture or any physician
employed by or on the medical staff of any such business or facility (the
"Insurance Subsidiary"), Investments in an amount which does not exceed the
minimum amount of capital required under the laws of the jurisdiction in which
the Insurance Subsidiary is formed, and any Investment by such Insurance
Subsidiary which is a legal investment for an insurance company under the laws
of the jurisdiction in which the Insurance Subsidiary is formed, (x) any
Investment made by the Obligor in any subsidiary (other than a Healthcare
Venture) or by any subsidiary in the Obligor or any other subsidiary not
otherwise permitted by Section 1006(b) of the 1992 Indenture or Section
5.07(b) of the 1993 Indenture, as the case may be, other than (A) the purchase
of shares of capital stock of the Obligor by a subsidiary and (B) any guaranty
by a subsidiary
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of any Indebtedness or other obligation of the Obligor, except for Senior
Indebtedness, (xi) Investments in an aggregate amount not to exceed $25
million at any time, (xii) any purchase or repurchase of capital stock or
obligations of a Healthcare Venture, (xiii) the repurchase or redemption by a
subsidiary of its capital stock (other than Redeemable Stock), (xiv) certain
purchases of shares of capital stock in connection with the Obligor's employee
benefit plans, (xv) purchases of fractional shares of capital stock which
exist as the result of any stock split, (xvi) market purchases of capital
stock by the Obligor or its subsidiaries for the purpose of contributing such
capital stock to the retirement plans of the Obligor and its subsidiaries in
lieu of making contributions to such plans in treasury stock or capital stock
issued for such purpose, (xvii) the making of any Investment in a Healthcare
Venture by the Obligor or any subsidiary, (xviii) loans or advances to
employees in the ordinary course of business, and (xix) Physician Support
Obligations.
"Physician Support Obligations" means any obligation or guarantee incurred
in connection with any advance, loan or payment to, or on behalf of or for the
benefit of any physician, pharmacist or other allied healthcare professional
for the purpose of recruiting, redirecting or retaining the physician,
pharmacist or other allied healthcare professional to provide service to
patients in the service area of any healthcare facility owned or operated by
the Obligor, any of its subsidiaries or any Healthcare Venture; excluding,
however, compensation for services provided by physicians, pharmacists or
other allied healthcare professionals to any healthcare facility owned or
operated by the Obligor, any of its subsidiaries or any Healthcare Venture.
"Rating Date" means the date which is 90 days prior to the earlier of (i) a
Change of Control and (ii) public notice of the occurrence of a Change of
Control or of the intention by the Obligor to effect a Change of Control.
"Rating Decline" means the occurrence, on or within 90 days after the date
of public notice of the occurrence of a Change of Control or of the intention
by the Obligor to effect a Change of Control, of: (a) in the event the
relevant Old Securities are rated by either Moody's or S&P on the Rating Date
as investment grade, the rating of such Old Securities by both such rating
agencies below investment grade, or (b) in the event the relevant Old
Securities are rated below investment grade by both such rating agencies on
the Rating Date, a decrease in the rating of the relevant Old Securities by
either of such rating agencies by one or more gradations (including gradations
within rating categories as well as between rating categories).
"Redeemable Stock" means any class or series of capital stock that by its
terms or otherwise is required to be redeemed prior to the stated maturity of
the Old Securities, or is redeemable at the option of the holder thereof at
any time prior to the stated maturity of such Old Securities.
SUMMARY OF PROVISIONS TO BE ADDED
Pursuant to the Solicitation, the Company is proposing to add the following
to each Indenture:
Limitations on Mortgages. Each Indenture would be amended to provide that
neither the Obligor nor any subsidiary will issue, assume or guarantee any
indebtedness secured by any mortgages, liens, pledges or other encumbrances
("Mortgages") upon any Principal Property without effectively providing that
the Old Securities then outstanding (together with, if the Obligor so
determines, any other indebtedness or obligation then existing or thereafter
created ranking equally with the Old Securities) shall be secured equally and
ratably with (or prior to) such indebtedness so long as such indebtedness
shall be so secured, except that this restriction will not apply to: (1)
Mortgages securing the purchase price or cost of construction of property (or
additions, substantial repairs, alterations or substantial improvements
thereto if the amount of such indebtedness does not exceed the cost thereof),
provided such indebtedness and the Mortgages are incurred within 18 months of
the acquisition or completion of construction and full operation (or within 18
months of the completion of
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such repairs, alterations or improvements); (2) Mortgages existing on property
at the time of its acquisition by the Obligor or a subsidiary or on the
property of a corporation at the time of the acquisition of such corporation
by the Obligor or a subsidiary (including acquisitions through merger or
consolidation); (3) Mortgages to secure indebtedness on which the interest
payments are exempt from federal income tax under Section 103 of the Internal
Revenue Code of 1986 (the "Code"); (4) in the case of a consolidated
subsidiary, Mortgages in favor of the Obligor or a consolidated subsidiary;
(5) Mortgages existing on the date the Proposed Amendments are adopted; (6)
certain Mortgages to governmental entities; (7) Mortgages incurred in
connection with the borrowing of funds, if within 120 days such funds are used
to repay indebtedness in the same principal amount secured by other Mortgages
on Principal Property with an independently appraised fair market value at
least equal to the appraised fair market value of the Principal Property which
secures the new Mortgage; (8) Mortgages incurred within 90 days (or any longer
period, not in excess of one year, as permitted by law) after acquisition of
the related property or equipment subject to such Mortgage arising solely in
connection with the transfer of tax benefits in accordance with Section
168(f)(8) of the Code (or any similar provision); and (9) any extension,
renewal or replacement of any Mortgage referred to in the foregoing clauses
(1) through (8) provided the amount secured is not increased and that such
extension, renewal or replacement Mortgage is limited to substantially the
same property that secured the Mortgage extended.
Limitations on Sale and Lease-Back Transactions. Each Indenture would be
amended to provide that neither the Obligor nor any subsidiary will enter into
any Sale and Lease-Back Transaction with respect to any Principal Property
with any person (other than the Obligor or a subsidiary) unless either (i) the
Obligor or such subsidiary would be entitled, pursuant to the provisions
described in clauses (1) through (9) under "Limitations on Mortgages" above,
to incur Debt secured by a Mortgage on the Principal Property to be leased
without equally and ratably securing the Old Securities, or (ii) the Obligor
during or immediately after the expiration of 120 days after the effective
date of such transaction applies to the voluntary retirement of its Funded
Debt and/or the acquisition or construction of Principal Property an amount
equal to the greater of the net proceeds of the sale of the property leased in
such transaction or the fair value in the opinion of the chief financial
officer of the Obligor of the leased property at the time such transaction was
entered into in each case net of the principal amount of all securities of the
relevant issue of Old Securities delivered for cancellation within such 120
day period.
Limitations on Subsidiary Debt and Preferred Stock. Each Indenture would be
amended to provide that the Obligor may not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, issue, assume or otherwise become
liable with respect to, extend the maturity of, or become responsible for the
payment of, as applicable, any Debt or Preferred Stock other than (1) Debt
outstanding on the date the Proposed Amendments are adopted; (2) Debt of a
Restricted Subsidiary which represents the assumption by such Restricted
Subsidiary of Debt of another Restricted Subsidiary; (3) Debt or Preferred
Stock of any corporation or partnership existing at the time such corporation
or partnership becomes a subsidiary; (4) Debt of a Restricted Subsidiary
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations or from guarantees, letters of credit, surety
bonds or performance bonds securing any obligations of the Obligor or any of
its subsidiaries incurred or assumed in connection with the disposition of any
business, property or subsidiary, other than guarantees or similar credit
support by any Restricted Subsidiary of indebtedness incurred by any person
acquiring all or any portion of such business, property or subsidiary for the
purpose of financing such acquisition; (5) Debt of a Restricted Subsidiary in
respect of performance, surety and other similar bonds, bankers acceptances
and letters of credit provided by such Restricted Subsidiary in the ordinary
course of business; (6) Debt secured by a Mortgage incurred to finance the
purchase price or cost of construction of property (or additions, substantial
repairs, alterations or substantial improvements thereto), provided that (A)
such Mortgage and the Debt secured thereby are incurred within 18 months of
the later of such acquisition or completion of construction (or such addition,
repair, alteration or improvement) and full operation
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thereof and (B) such Mortgage does not relate to any property other than the
property so purchased or constructed (or added, repaired, altered or
improved); (7) Permitted Subsidiary Refinancing Debt; (8) Debt (including,
without limitation, Debt arising from a guarantee) of a Restricted Subsidiary
to the Obligor or another subsidiary, but only for so long as held or owned by
the Obligor or another subsidiary; or (9) any obligation pursuant to a Sale
and Lease-Back Transaction permitted pursuant to the provisions described
under "Limitations on Sale and Lease-Back Transactions" above.
Consolidation, Merger, Sale or Lease of Assets. Each Indenture would be
amended to provide that an Obligor, without the consent of the holders of the
Old Securities, may consolidate with or merge into, or transfer or lease its
assets substantially as an entirety to, any corporation organized under the
laws of any domestic jurisdiction, provided, that (i) the successor
corporation assumes the Obligor's obligations on the relevant issue of Old
Securities and under the Indenture, (ii) immediately after giving effect to
the transactions no event of default, and no event which with notice or
passage of time, or both, would become an event of default, shall have
occurred and be continuing and (iii) certain other conditions are met.
The Indentures also would be amended to provide that, notwithstanding the
foregoing, the Obligor and any subsidiary may issue, assume or guarantee
indebtedness secured by Mortgages and enter into Sale and Lease-Back
Transactions that would otherwise be subject to the restrictions of
"Limitations on Mortgages" or "Limitations on Sale and Lease-Back
Transactions," and any Restricted Subsidiary may issue, assume or otherwise
become liable for any Debt or Preferred Stock that would otherwise be subject
to "Limitations on Subsidiary Debt and Preferred Stock," in an aggregate
amount which, together with all other such Debt or Preferred Stock of the
Obligor and its subsidiaries (not including Debt or Preferred Stock permitted
pursuant to the foregoing paragraphs) and the aggregate Attributable Debt in
respect of Sale and Lease-Back Transactions, does not exceed 15% of
Consolidated Net Tangible Assets of the Obligor and its consolidated
subsidiaries.
The following definitions apply to the provisions proposed to be added to
each Indenture:
"Attributable Debt" means (i) as to any capitalized lease obligations, the
Debt carried on the balance sheet, and (ii) as to any operating leases, the
total net minimum rent required to be paid under such leases during the
remaining term thereof discounted at the rate of 1% per annum over the
weighted average yield to maturity of all debt securities issued and
outstanding under the Company Indenture, or, in the event there are no such
debt securities outstanding, debt securities issued and outstanding under the
1992 Indenture or the 1993 Indenture, compounded semi-annually.
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities as disclosed on the consolidated balance
sheet of the Obligor (excluding any thereof that are by their terms extendible
or renewable at the option of the obligor thereon to a time more than 12
months after the time as of which the amount thereof is being computed and
excluding any deferred income taxes that are included in current liabilities),
and (ii) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangible assets, all as set forth on the
most recent consolidated balance sheet of the Obligor.
"Debt" means (i) indebtedness for borrowed money, (ii) indebtedness
(including capitalized lease obligations) for the deferred payment of the
purchase price of property or assets purchased, and (iii) guarantees or other
contingent obligations of or for borrowed money of another Person or
indebtedness of another Person for the deferred payment of the purchase price
of property or assets purchased; provided, however, that with respect to an
Obligor or a Restricted Subsidiary, as the case may be, "Debt" does not
include indebtedness owed by a Restricted Subsidiary to an Obligor, by a
Restricted Subsidiary to a subsidiary or by an Obligor to a subsidiary.
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"Funded Debt" means any indebtedness for money borrowed, created, issued,
incurred, assumed or guaranteed that would be classified as long-term debt,
but in any event including all indebtedness for money borrowed, whether
secured or unsecured, maturing more than one year, or extendible at the option
of the obligor to a date more than one year, after the date of determination
thereof (excluding any amount thereof included in current liabilities).
"Permitted Subsidiary Refinancing Debt" means Debt of any subsidiary, the
proceeds of which are used to renew, extend, refinance or refund outstanding
Debt of such subsidiary, provided that such Debt is scheduled to mature no
earlier than the Debt being renewed, extended, refinanced or refunded;
provided, further, that such Debt shall be Permitted Subsidiary Refinancing
Debt only to the extent that the aggregate principal amount of such Debt does
not exceed the aggregate principal amount then outstanding under the Debt
being renewed, extended, refinanced or refunded.
"Preferred Stock" of any person means any capital stock of such person which
by its terms or by the terms of any security into which it is convertible or
exchangeable is preferred as to the payment of dividends or upon liquidation
to any class of the common stock of such person or which matures or is
mandatorily redeemable at the option of the holder thereof, in whole or in
part, on or prior to the maturity date of any outstanding Old Securities.
"Principal Property" means each acute-care hospital providing general
medical and surgical services (excluding equipment, personal property and
hospitals that primarily provide specialty medical services, such as
psychiatric and obstetrical and gynecological services) owned solely by the
Obligor and/or one or more subsidiaries and located in the United States.
"Restricted Subsidiary" means (a) any subsidiary other than an Unrestricted
Subsidiary and (b) any subsidiary which was an Unrestricted Subsidiary but
which, subsequent to the date hereof, is designated by the Obligor to be a
Restricted Subsidiary; provided, however, that the Obligor may not designate
any such subsidiary to be a Restricted Subsidiary if the Obligor would thereby
breach any covenant or agreement contained in the Indenture (on the assumption
that any transaction to which such subsidiary was a party at the time of such
designation and which would have given rise to Debt or Preferred Stock or
constituted a Sale and Lease-back Transaction at the time it was entered into
had such subsidiary then been a Restricted Subsidiary was entered into at the
time of such designation).
"Unrestricted Subsidiary" means (a) any subsidiary acquired or organized
after the date of the Company Indenture, provided, however, that such
subsidiary is not a successor, directly or indirectly, to and does not,
directly or indirectly, own any equity interest in, any Restricted Subsidiary;
(b) any subsidiary the principal business of which consists of obtaining
financing in capital markets outside the United States of America or financing
the acquisition or disposition of machinery, equipment, inventory, accounts
receivable and other real, personal and intangible property by persons
including the Obligor or a subsidiary; (c) any subsidiary the principal
business of which is owning, leasing, dealing in or developing real property
for residential or office building purposes or land, buildings or related real
property owned by the Obligor or any subsidiary as of the date of the
Indenture; (d) any Joint Venture Subsidiary; or (e) stock or other securities
of an Unrestricted Subsidiary of the character described in clauses (a)
through (d) of this definition, unless and until, in each of the cases
specified in this paragraph, any such subsidiary shall have been designated to
be a Restricted Subsidiary pursuant to clause (b) of the definition of
"Restricted Subsidiary."
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DESCRIPTION OF NEW SECURITIES
GENERAL
The New Securities will be issued under an indenture, dated as of December
15, 1993 (the "Company Indenture"), between the Company and The First National
Bank of Chicago, as trustee (the "New Trustee"). The terms of the New
Securities include those stated in the Company Indenture, those incorporated
in the Company Indenture by reference to the Trust Indenture Act of 1939 (the
"Trust Indenture Act") and those set forth in certain resolutions adopted as
of April 12, 1995 by the Board of Directors of the Company (the "Board
Resolutions"). The New Securities are subject to all such terms and holders
are referred to each of the Company Indenture, the Trust Indenture Act and the
Board Resolutions for a statement of such terms.
The statements and definitions of terms under this caption are summaries and
do not purport to be complete and are qualified in their entirety by express
reference to the Company Indenture, the Trust Indenture Act and the Board
Resolutions. The Board Resolutions have been filed with the Commission as an
exhibit to the Registration Statement of which this Prospectus is a part.
The Company Indenture does not limit the aggregate principal amount of debt
securities that may be issued thereunder and provides that debt securities may
be issued thereunder from time to time in series. The New 2005 Notes, New 2000
Notes and New 2025 Notes will each be a series of debt securities under the
Company Indenture. The Company Indenture limits the ability of the Company and
its subsidiaries, under certain circumstances, to secure Debt by mortgaging
its Principal Properties or entering into Sale and Lease-Back Transactions and
restricts certain of the Company's subsidiaries from incurring Debt or issuing
Preferred Stock, as more fully described below.
The New Securities will be unsecured obligations of the Company. Unlike the
Old Securities, which are subordinated to senior indebtedness of Healthtrust
and the Company, the New Securities will be unsubordinated senior obligations
of the Company and will rank pari passu with all existing and future unsecured
and unsubordinated senior indebtedness of the Company. Each issue of New
Securities will bear interest from the Exchange Date at the rate described
below for such issue. Interest on the New Securities will be payable
semiannually in arrears on each June 1 and December 1, commencing December 1,
1995; provided that if any June 1 or December 1 is not a business day,
interest will be paid on the next succeeding business day. The New Securities
will be issued in denominations of $1,000 and integral multiples thereof.
As of the date hereof, the Company's debt securities are rated A3 by Moody's
and BBB+ by S&P. The Company expects that the New Securities will receive
similar ratings; however, the ratings given the New Securities should be
evaluated independently from similar ratings on other types of securities. A
security rating is not a recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time by the assigning rating
agency.
New 2005 Notes. The New 2005 Notes will be limited to $500,000,000 aggregate
principal amount and will mature on June 1, 2005. The New 2005 Notes will bear
interest from the Exchange Date at a rate per annum equal to the sum of (i)
the yield on the 7 1/2% U.S. Treasury Note due February 15, 2005, as of the
Pricing Time, plus (ii) %.
New 2000 Notes. The New 2000 Notes will be limited to $200,000,000 aggregate
principal amount and will mature on June 1, 2000. The New 2000 Notes will bear
interest from the Exchange Date at a rate per annum equal to the sum of (i)
the yield on the 6 3/4% U.S. Treasury Note due April 30, 2000, as of the
Pricing Time, plus (ii) %.
New 2025 Notes. The New 2025 Notes will be limited to $300,000,000 aggregate
principal amount and will mature on June 1, 2025. The New 2025 Notes will bear
interest from the Exchange Date at a rate per annum equal to the sum of (i)
the yield on the 7 1/2% U.S. Treasury Note due November 15, 2024, as of the
Pricing Time, plus (ii) %.
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BOOK-ENTRY NOTES
The certificates representing the New Securities will be issued in fully
registered form without coupons. Each issue of New Securities will be
represented by a single, fully registered global security (a "Global
Security"). Each Global Security will be deposited with The Depository Trust
Company, New York, New York (sometimes referred to herein as the
"Depositary"), which will act as securities depositary for the New Securities,
and will be registered in the name of Cede & Co., a nominee of the Depositary.
No Global Security may be transferred except as a whole by a nominee of the
Depositary to the Depositary or to another nominee of the Depositary, or by
the Depositary or any such nominee to a successor of the Depositary or such
nominee.
So long as the Depositary or its nominee is the registered owner of a Global
Security, the Depositary or its nominee, as the case may be, will be the sole
holder of the New Securities represented thereby for all purposes under the
Company Indenture. Unlike the Old Securities, which were issued in
certificated form, except as otherwise provided in this section, the
beneficial owners of New Securities will not be entitled to receive New
Securities in certificated form and will not be considered the holders thereof
for any purpose under the Company Indenture. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depositary and, if such person is not a Participant (as defined below), on the
procedures of the Participant through which such person owns his or her
interest in order to exercise any rights of a holder under the Company
Indenture. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated form.
Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security representing New Securities.
Each Global Security is exchangeable for certificated securities of like
tenor and terms and of differing authorized denominations aggregating a like
amount, only if (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for the Global Security, (ii) the
Depositary ceases to be a clearing agency registered under the Exchange Act,
(iii) the Company in its sole discretion determines that the Global Security
shall be exchangeable for certificated securities or (iv) there shall have
occurred and be continuing an Event of Default under the Company Indenture
with respect to the relevant series of New Securities.
In general, the Depositary holds securities that its participants
("Participants") deposit with the Depositary. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to the Depositary's system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with
the Commission.
Acquisitions of New Securities under the Depositary's system must be made by
or through Direct Participants, which receive a credit on the Depositary's
records for such New Securities acquired. The ownership interest of each
actual purchaser of New Securities represented by a Global Security (a
"Beneficial Owner") is in turn to be recorded on the relevant Direct and
Indirect Participants' records. A Beneficial Owner will not receive written
confirmation from the Depositary of its purchase. Transfers of ownership
interests in a Global Security representing New Securities are to be
accomplished by entries made on the books of Direct or Indirect Participants
acting on behalf of Beneficial Owners.
The deposit of Global Securities with the Depositary and their registration
in the name of Cede & Co. effect no change in beneficial ownership. The
Depositary has no knowledge of the actual Beneficial Owners of the Global
Securities representing the New Securities; the Depositary's records reflect
only the identity of the Direct Participants to whose accounts such New
Securities are credited, which may
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or may not be the Beneficial Owners. The Participants will be responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Securities representing the New Securities. Under its usual
procedures, the Depositary mails an Omnibus Proxy to the Company as soon as
possible after the applicable record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose
accounts the New Securities are credited on the applicable record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Securities representing the
New Securities will be made to the Depositary. The Depositary's practice is to
credit Direct Participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the Depositary's records
unless the Depositary has reason to believe that it will not receive payment
on such date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of
the Depositary, the New Trustee or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to the Depositary is the responsibility of the Company
or the Trustee, disbursement of such payments to Direct Participants shall be
the responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
The Depositary may discontinue providing its services as securities
depositary with respect to the New Securities at any time by giving reasonable
notice to the Company or the New Trustee. Under such circumstances, in the
event that a successor securities depositary is not obtained, certificated
securities will be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor securities depository). In
that event, certificated securities will be printed and delivered.
The information in this section concerning the Depositary and the
Depositary's system has been obtained from sources that the Company believes
to be reliable, but the Company takes no responsibility for the accuracy
thereof.
OPTIONAL REDEMPTION
Unlike the Old Securities, the New Securities may not be redeemed by the
Company prior to the maturity thereof.
CERTAIN COVENANTS
The restrictive covenants applicable to the Company and its subsidiaries
pursuant to the New Securities are substantially less restrictive than those
currently applicable pursuant to the Old Securities. See "The Proposed
Amendments" for a description of certain covenants currently applicable with
respect to the Old Securities. Set forth below are certain covenants that will
be applicable with respect to the New Securities.
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Limitations on Mortgages. The Company Indenture provides that neither the
Company nor any subsidiary will issue, assume or guarantee any indebtedness
secured by any mortgages, liens, pledges or other encumbrances ("Mortgages")
upon any Principal Property without effectively providing that the New
Securities then outstanding (together with, if the Company so determines, any
other indebtedness or obligation then existing or thereafter created ranking
equally with the New Securities) shall be secured equally and ratably with (or
prior to) such indebtedness so long as such indebtedness shall be so secured,
except that this restriction will not apply to: (1) Mortgages securing the
purchase price or cost of construction of property (or additions, substantial
repairs, alterations or substantial improvements thereto if the amount of such
indebtedness does not exceed the cost thereof), provided such indebtedness and
the Mortgages are incurred within 18 months of the acquisition or completion
of construction and full operation (or within 18 months of the completion of
such repairs, alterations or improvements); (2) Mortgages existing on property
at the time of its acquisition by the Company or a subsidiary or on the
property of a corporation at the time of the acquisition of such corporation
by the Company or a subsidiary (including acquisitions through merger or
consolidation); (3) Mortgages to secure indebtedness on which the interest
payments are exempt from federal income tax under Section 103 of the Internal
Revenue Code of 1986 (the "Code"); (4) in the case of a consolidated
subsidiary, Mortgages in favor of the Company or a consolidated subsidiary;
(5) Mortgages existing on the date of the Company Indenture; (6) certain
Mortgages to governmental entities; (7) Mortgages incurred in connection with
the borrowing of funds, if within 120 days such funds are used to repay
indebtedness in the same principal amount secured by other Mortgages on
Principal Property with an independently appraised fair market value at least
equal to the appraised fair market value of the Principal Property which
secures the new Mortgage; (8) Mortgages incurred within 90 days (or any longer
period, not in excess of one year, as permitted by law) after acquisition of
the related property or equipment subject to such Mortgage arising solely in
connection with the transfer of tax benefits in accordance with Section
168(f)(8) of the Code (or any similar provision); and (9) any extension,
renewal or replacement of any Mortgage referred to in the foregoing clauses
(1) through (8) provided the amount secured is not increased and that such
extension, renewal or replacement Mortgage is limited to substantially the
same property that secured the Mortgage extended.
Limitations on Sale and Lease-Back Transactions. The Company Indenture
provides that neither the Company nor any subsidiary will enter into any Sale
and Lease-Back Transaction with respect to any Principal Property with any
person (other than the Company or a subsidiary) unless either (i) the Company
or such subsidiary would be entitled, pursuant to the provisions described in
clauses (1) through (9) under "Limitations on Mortgages" above, to incur
indebtedness secured by a Mortgage on the Principal Property to be leased
without equally and ratably securing the New Securities, or (ii) the Company
during or immediately after the expiration of 120 days after the effective
date of such transaction applies to the voluntary retirement of its Funded
Debt and/or the acquisition or construction of Principal Property an amount
equal to the greater of the net proceeds of the sale of the property leased in
such transaction or the fair value in the opinion of the chief financial
officer of the Company of the leased property at the time such transaction was
entered into in each case net of the principal amount of all the debt
securities delivered for cancellation within such 120 day period under the
Company Indenture.
Limitations on Subsidiary Debt and Preferred Stock. The Company Indenture
provides that the Company may not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume or otherwise become
liable with respect to, extend the maturity of, or become responsible for the
payment of, as applicable, any Debt or Preferred Stock other than (1) Debt
outstanding on the date of the Company Indenture; (2) Debt of a Restricted
Subsidiary which represents the assumption by such Restricted Subsidiary of
Debt of another Restricted Subsidiary; (3) Debt or Preferred Stock of any
corporation or partnership existing at the time such corporation or
partnership becomes a subsidiary; (4) Debt of a Restricted Subsidiary arising
from agreements providing for indemnification, adjustment of purchase price or
similar obligations or from guarantees, letters of credit, surety bonds or
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performance bonds securing any obligations of the Company or any of its
subsidiaries incurred or assumed in connection with the disposition of any
business, property or subsidiary, other than guarantees or similar credit
support by any Restricted Subsidiary of indebtedness incurred by any person
acquiring all or any portion of such business, property or subsidiary for the
purpose of financing such acquisition; (5) Debt of a Restricted Subsidiary in
respect of performance, surety and other similar bonds, bankers acceptances
and letters of credit provided by such Restricted Subsidiary in the ordinary
course of business; (6) Debt secured by a Mortgage incurred to finance the
purchase price or cost of construction of property (or additions, substantial
repairs, alterations or substantial improvements thereto), provided that (A)
such Mortgage and the Debt secured thereby are incurred within 18 months of
the later of such acquisition or completion of construction (or such addition,
repair, alteration or improvement) and full operation thereof and (B) such
Mortgage does not relate to any property other than the property so purchased
or constructed (or added, repaired, altered or improved); (7) Permitted
Subsidiary Refinancing Debt; (8) Debt (including, without limitation, Debt
arising from a guarantee) of a Restricted Subsidiary to the Company or another
subsidiary, but only for so long as held or owned by the Company or another
subsidiary; or (9) any obligation pursuant to a Sale and Lease-Back
Transaction permitted pursuant to the provisions described under "Limitations
on Sale and Lease-Back Transactions" above.
Notwithstanding the foregoing, the Company and any subsidiary may issue,
assume or guarantee indebtedness secured by Mortgages and enter into Sale and
Lease-Back Transactions that would otherwise be subject to the restrictions of
"Limitations on Mortgages" or "Limitations on Sale and Lease-Back
Transactions," and any Restricted Subsidiary may issue, assume or otherwise
become liable for any Debt or Preferred Stock that would otherwise be subject
to "Limitations on Subsidiary Debt and Preferred Stock," in an aggregate
amount which, together with all other such Debt or Preferred Stock of the
Company and its subsidiaries (not including Debt or Preferred Stock permitted
pursuant to the foregoing paragraphs) and the aggregate Attributable Debt in
respect of Sale and Lease-Back Transactions, does not exceed 15% of
Consolidated Net Tangible Assets of the Company and its consolidated
subsidiaries.
CONSOLIDATION, MERGER, SALE OR LEASE OF ASSETS
The limitations on consolidations, mergers and asset sales under the Company
Indenture are somewhat less restrictive than those set forth in the 1992
Indenture and the 1993 Indenture. See "The Proposed Amendments" for a
description of the limitations on consolidations, mergers and asset sales set
forth in the 1992 Indenture and the 1993 Indenture. Under the Company
Indenture, the Company, without the consent of the holders of the New
Securities, may consolidate with or merge into, or transfer or lease its
assets substantially as an entirety to any corporation organized under the
laws of any domestic jurisdiction, provided, that (i) the successor
corporation assumes the Company's obligations on the New Securities and under
the Company Indenture, (ii) immediately after giving effect to the
transactions no Event of Default, and no event which with notice or passage of
time, or both, would become an Event of Default, shall have occurred and be
continuing and (iii) certain other conditions are met.
CHANGE OF CONTROL
The Company will not be required to offer to repurchase the New Securities
in the event of any change of control of the Company. In contrast, the 1992
Indenture and the 1993 Indenture currently require that an offer be made to
repurchase the Old Securities in the event of a Change of Control and a Rating
Decline (as each such term is defined in such Indenture). See "The Proposed
Amendments."
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EVENTS OF DEFAULT
The following are Events of Default under the Company Indenture with respect
to each series of New Securities:
(i) failure to pay principal of any New Security of that series when due;
(ii) failure to pay any interest on any New Security of that series when
due, continued for 30 days;
(iii) failure to perform any other covenant of the Company set forth in
the Company Indenture (other than a covenant included in the Company
Indenture solely for the benefit of a series of debt securities other than
the relevant series), continued for 60 days after written notice is given
as provided in the Company Indenture;
(iv) the entry of a decree or order for relief in respect of the Company
in an involuntary case under any applicable federal or state bankruptcy,
insolvency or similar law, or a decree or order adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement adjustment or composition of or in respect of
the Company under any applicable federal or state law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for 60
consecutive days; and
(v) the commencement by the Company of a voluntary case under any
applicable federal or state bankruptcy, insolvency or similar law, or the
consent by it to the entry of an order for relief in an involuntary case
under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or the making by it of
an assignment for the benefit of its creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
actions.
The Old Securities contain events of default substantially similar to those
set forth in the New Securities. However, unlike the New Securities, the Old
Securities include as an event of default the acceleration of the maturity of
any Indebtedness (as defined in the Indentures) of an Obligor or certain of
its subsidiaries in principal amount of, at least $50,000,000 in the case of
the Old 10 1/4% Notes and the Old 8 3/4% Debentures, or $25,000,000 in the
case of the Old 10 3/4% Notes, or any failure of an Obligor or certain of its
subsidiaries to pay any such Indebtedness at final maturity. In addition,
under the Old 10 3/4% Notes, unlike the New Securities, final judgments
rendered against an Obligor or certain of its subsidiaries for the payment of
money exceeding $25 million, constitute an event of default.
If any Event of Default with respect to a series of New Securities occurs
and is continuing, either the New Trustee or the holders of at least 25% in
aggregate principal amount of the outstanding New Securities of that series,
may declare the principal amount of all securities of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to a series of New Securities has been made, but before a judgment or
decree based on that acceleration has been obtained, the holders of a majority
in aggregate principal amount of the New Securities of that series may, under
certain circumstances, rescind and annul such acceleration.
The Company Indenture provides that, subject to the duty of the New Trustee
during a default to act with the required standard of care, the New Trustee
will be under no obligation to exercise any of its rights or powers under the
Company Indenture at the request or direction of any of the holders of New
Securities unless such holders shall have offered a reasonable indemnity to
the New Trustee. Subject to such provisions for the indemnification of the New
Trustee, the holders of a majority in aggregate principal amount of any series
of New Securities will have the right to direct the time, method
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and place of conducting any proceeding for any remedy available to the New
Trustee, or exercising any trust or power conferred on the New Trustee, with
respect to the securities of that series.
The Company is required to furnish the New Trustee annually with a statement
as to the performance by the Company of certain of its obligations under the
Company Indenture and as to any default in such performance.
MODIFICATION AND WAIVER
Modifications of and amendments to the Company Indenture may be made by the
Company and the New Trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the New Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each New
Security affected thereby, (a) change the stated maturity of the principal of,
or any installment of interest on, any New Security, (b) reduce the principal
amount of, or reduce the amount of any installment of interest on, any New
Security, (c) change the currency of payment of principal of, or interest on,
any New Security, (d) impair the right to institute suit for the enforcement
of any payment on, or with respect to, any New Security, or (f) reduce the
percentage in principal amount of New Securities of that series, the consent
of whose holders is required for modification or amendment of the Company
Indenture or for waiver of compliance with certain provisions of the Company
Indenture or for waiver of certain defaults.
The holders of a majority in aggregate principal amount of the New
Securities of each series may, on behalf of all holders of New Securities of
that series, waive any past default under the Company Indenture with respect
to New Securities of that series, except a default with respect to the payment
of principal or interest or a covenant or provision that cannot be modified or
amended without the consent of the holders of each New Security affected
thereby.
DEFEASANCE
With respect to each series of New Securities, the Company, at its option,
(i) will be discharged from any and all obligations in respect of the New
Securities of that series (except for certain obligations to register the
transfer or exchange of New Securities of that series, replace stolen, lost or
mutilated New Securities of that series, maintain paying agencies and hold
moneys for payment in trust) or (ii) will not be subject to provisions of the
Company Indenture described above under "--Certain Covenants" and "--
Consolidation, Merger, Sale or Lease of Assets," in each case if the Company
deposits with the New Trustee, in trust, money or certain debt securities
issued by the government of the United States which through the payment of
interest thereon and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay all the principal and interest on
the New Securities of that series on the dates such payments are due in
accordance with the terms of such New Securities. To exercise any such option,
the Company is required, among other things, to deliver to the New Trustee an
opinion of counsel to the effect that (1) the deposit and related defeasance
would not cause the holders of the New Securities of that series to recognize
income, gain or loss for United States income tax purposes and (2) if the New
Securities of that series are then listed on any national securities exchange,
such New Securities would not be de-listed from such exchange as a result of
the exercise of such option.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Company Indenture.
"Attributable Debt" means (i) as to any capitalized lease obligations, the
Debt carried on the balance sheet, and (ii) as to any operating leases, the
total net minimum rent required to be paid under
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such leases during the remaining term thereof discounted at the rate of 1% per
annum over the weighted average yield to maturity of all debt securities
issued and outstanding under the Company Indenture, compounded semi-annually.
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities as disclosed on the consolidated balance
sheet of the Company (excluding any thereof that are by their terms extendible
or renewable at the option of the obligor thereon to a time more than 12
months after the time as of which the amount thereof is being computed and
excluding any deferred income taxes that are included in current liabilities),
and (ii) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangible assets, all as set forth on the
most recent consolidated balance sheet of the Company.
"Debt" means (i) indebtedness for borrowed money, (ii) indebtedness
(including capitalized lease obligations) for the deferred payment of the
purchase price of property or assets purchased, and (iii) guarantees or other
contingent obligations of or for borrowed money of another person or
indebtedness of another person for the deferred payment of the purchase price
of property or assets purchased; provided, however, that with respect to the
Company or a Restricted Subsidiary, as the case may be, "Debt" does not
include indebtedness owed by a Restricted Subsidiary to the Company, by a
Restricted Subsidiary to a subsidiary or by the Company to a subsidiary.
"Funded Debt" means any indebtedness for money borrowed, created, issued,
incurred, assumed or guaranteed that would be classified as long-term debt,
but in any event including all indebtedness for money borrowed, whether
secured or unsecured, maturing more than one year, or extendible at the option
of the obligor to a date more than one year, after the date of determination
thereof (excluding any amount thereof included in current liabilities).
"Permitted Subsidiary Refinancing Debt" means Debt of any subsidiary, the
proceeds of which are used to renew, extend, refinance or refund outstanding
Debt of such subsidiary, provided that such Debt is scheduled to mature no
earlier than the Debt being renewed, extended, refinanced or refunded;
provided, further, that such Debt shall be Permitted Subsidiary Refinancing
Debt only to the extent that the aggregate principal amount of such Debt does
not exceed the aggregate principal amount then outstanding under the Debt
being renewed, extended, refinanced or refunded.
"Preferred Stock" of any person means any capital stock of such person which
by its terms or by the terms of any security into which it is convertible or
exchangeable is preferred as to the payment of dividends or upon liquidation
to any class of the common stock of such person or which matures or is
mandatorily redeemable at the option of the holder thereof, in whole or in
part, on or prior to the maturity date of any outstanding debt securities
issued under the Company Indenture.
"Principal Property" means each acute-care hospital providing general
medical and surgical services (excluding equipment, personal property and
hospitals that primarily provide specialty medical services, such as
psychiatric and obstetrical and gynecological services) owned solely by the
Company and/or one or more subsidiaries and located in the United States.
"Restricted Subsidiary" means (a) any subsidiary other than an Unrestricted
Subsidiary and (b) any subsidiary which was an Unrestricted Subsidiary but
which, subsequent to the date hereof, is designated by the Company to be a
Restricted Subsidiary; provided, however, that the Company may not designate
any such subsidiary to be a Restricted Subsidiary if the Company would thereby
breach any covenant or agreement contained in the Company Indenture (on the
assumption that any transaction to which such subsidiary was a party at the
time of such designation and which would have given rise to Debt or Preferred
Stock or constituted a Sale and Lease-Back Transaction at the time it
55
<PAGE>
SCHEDULE A
Fixed Spread Pricing Formula
For Determining the Reference Total Price
For an Issue of Old Securities
YLD =Reference Yield, equal to the Benchmark Treasury Yield for such issue
plus the applicable fixed spread for such issue, expressed as a decimal
number.
CPN =The nominal rate of interest payable on such issue expressed as a
decimal number.
N =The number of regular semiannual interest payments, from (but
excluding) the Exchange Date to (and including) the relevant redemption
date (the "Redemption Date") for such issue.
S =The number of days from (and including) the most recent semiannual
interest payment date for such issue to (but excluding) the Exchange
Date. The number of days is computed using the 30/360 day count method.
RED =The redemption price per $1,000 principal amount of Old Securities on
the Redemption Date (the "Redemption Price") for such issue.
PRICE=The Reference Total Price per $1,000 principal amount of Old Securities
for such issue. The Reference Total Price is rounded to the nearest
cent.
- RED CPN -
( ---- -- ---)
CPN 1000 YLD
PRICE=1000 X --- + ----------- X (1 + YLD) (S/180)
YLD ( YLD ) N ---
1 + --- 2
2
- -
<PAGE>
SCHEDULE B
Example Determinations of Reference Total Prices
Demonstrating Application of
The Methodology Specified in Schedule A
THE REFERENCE TOTAL PRICES SET FORTH ON THIS SCHEDULE B ARE FOR ILLUSTRATIVE
PURPOSES ONLY AND NO REPRESENTATION IS INTENDED WITH RESPECT TO THE ACTUAL
CONSIDERATION THAT MAY BE PAID PURSUANT TO THE EXCHANGE OFFERS. THE ACTUAL
REFERENCE TOTAL PRICES MAY BE GREATER OR LESS THAN THOSE DEPICTED HEREIN
DEPENDING ON THE ACTUAL BENCHMARK TREASURY YIELDS AS OF THE PRICING TIME.
<TABLE>
<CAPTION>
OLD 10 OLD 10 OLD 8
3/4% NOTES 1/4% NOTES 3/4% DEBENTURES
---------- ---------- ---------------
<S> <C> <C> <C>
Terms of Old Securities:
Interest Rate 10.75% 10.25% 8.75%
Maturity Date 5/1/02 4/15/04 3/15/05
Redemption Price(/1/) $1,040.00 $1,038.44 $1,000.00
Redemption Date(/1/) 5/1/97 4/15/99 3/15/01
Benchmark Treasury Security:
Interest Rate 6 7/8% 7% 7 3/4%
Maturity Date 4/30/97 4/15/99 2/15/01
Assumed Benchmark
Treasury Yield(/2/) X.XX% X.XX% X.XX%
Fixed Spread 0.XX% 0.XX% 0.XX%
Assumed Exchange Date(/3/) X/XX/95 X/XX/95 X/XX/95
Computation of Reference Total Price
for these Examples:
YLD 0.0XXX 0.0XXX 0.0XXX
CPN 0.1075 0.1025 0.0875
N 4 8 12
S XX XX XX
RED 1,040.00 1,038.44 1,000.00
Reference Total Price
for this Example(/4/) XXXX.XX XXXX.XX XXXX.XX
</TABLE>
- --------
(1) As defined in Schedule A. These are used only for the purpose of computing
the Reference Total Price.
(2) The assumed Benchmark Treasury Yields for these examples are the yields on
the Benchmark Treasury Securities as of 4:00 p.m., New York City time, on
, 1995.
(3) The assumed Exchange Date for these examples is the scheduled Exchange
Date for each Exchange Offer and will be the Exchange Date unless such
Exchange Offer is extended.
(4) These are the Reference Total Prices for these examples only and assume
Benchmark Treasury Yields and an Exchange Date as indicated.
<PAGE>
The Dealer Manager for the Exchange Offers is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-3738 (call collect)
(800) 558-3745 (toll free)
Attention: Liability Management Group
Any questions concerning the terms of the Exchange Offers
may be directed to the Dealer Manager.
The Information Agent for the Exchange Offers is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(800) 829-6554 (toll free)
Any questions concerning tender procedures or requests
for additional copies of this Prospectus may be
directed to the Information Agent or the Dealer Manager.
The Exchange Agent for the Exchange Offers is:
CHEMICAL BANK
By Mail: By Hand or Overnight Delivery: By Facsimile:
Chemical Bank 55 Water Street (212) 629-8015
P.O. Box 3085 Second Floor--Room 234 (212) 629-8016
GPO Station New York, New York 10041
New York, New York Confirm By Telephone:
10116
(212) 946-7137
The Trustee for the New Securities is:
THE FIRST NATIONAL BANK OF CHICAGO
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS OF OFFICERS.
The Registrant's Restated Certificate of Incorporation provides that each
person who was or is made a party to, or is involved in, any action, suit or
proceeding by reason of the fact that he or she was a director or officer of
the Registrant (or was serving at the request of the Registrant as a director,
officer, employee or agent for another entity) will be indemnified and held
harmless by the Registrant, to the full extent authorized by the Delaware
General Corporation Law.
Under Section 145 of the Delaware General Corporation Law, a corporation may
indemnify a director, officer, employee or agent of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her if he or she acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. In the case of an action brought by or in the right of a
corporation, the corporation may indemnify a director, officer, employee or
agent of the corporation against expenses (including attorneys' fees) actually
and reasonably incurred by him or her if he or she acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless a court finds that, in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court shall deem proper.
The Registrant's Restated Certificate of Incorporation provides that to the
fullest extent permitted by Delaware General Corporation Law as the same
exists or may hereafter be amended, a director of the Registrant shall not be
liable to the Registrant or its stockholders for monetary damages for breach
of fiduciary duty as a director. The Delaware General Corporation Law permits
Delaware corporations to include in their certificates of incorporation a
provision eliminating or limiting director liability for monetary damages
arising from breaches of their fiduciary duty. The only limitations imposed
under the statute are that the provision may not eliminate or limit a
director's liability (i) for breaches of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or involving intentional misconduct or known violations of law, (iii) for the
payment of unlawful dividends or unlawful stock purchases or redemptions, or
(iv) for transactions in which the director received an improper personal
benefit.
The Registrant is insured against liabilities which it may incur by reason
of its indemnification of officers and directors in accordance with its
Restated Certificate of Incorporation. In addition, directors and officers are
insured, at the Registrant's expense, against certain liabilities that might
arise out of their employment and are not subject to indemnification under the
Restated Certificate of Incorporation.
The foregoing summaries are necessarily subject to the complete text of the
statutes, Restated Certificate of Incorporation and agreements referred to
above and are qualified in their entirety by reference thereto.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES.
(a) Exhibits
<TABLE>
<C> <S>
1* --Form of Dealer Manager Agreement between the Registrant and the
Dealer Manager.
4.1** --Indenture dated as of December 15, 1993 between the Registrant and
The First National Bank of Chicago, as Trustee (filed as Exhibit
4.11 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, and incorporated herein by refer-
ence).
</TABLE>
- --------
* filed herewith
** previously filed
II-1
<PAGE>
<TABLE>
<C> <S>
4.2** --Indenture dated as of May 1, 1992 between Healthtrust and The First
National Bank of Boston, as Trustee (filed as Exhibit 4.5 to
Healthtrust's Annual Report on Form 10-K for the fiscal year ended
August 31, 1992, and incorporated herein by reference).
4.3** --Indenture dated as of March 30, 1993 between Healthtrust and The
First National Bank of Boston, as Trustee (filed as Exhibit 2 to
Healthtrust's Registration Statement on Form 8-A dated April 22,
1993, and incorporated herein by reference).
4.4* --First Supplemental Indenture dated as of April 24, 1995 among the
Registrant, Healthtrust and The First National Bank of Boston, as
Trustee, with respect to the Old 10 3/4% Notes.
4.5* --First Supplemental Indenture dated as of April 24, 1995 among the
Registrant, Healthtrust and The First National Bank of Boston, as
Trustee, with respect to the Old 10 1/4% Notes and the Old 8 3/4%
Debentures.
4.6* --Form of Second Supplemental Indenture among the Registrant,
Healthtrust and The First National Bank of Boston, as Trustee, with
respect to the Old 10 3/4% Notes.
4.7* --Form of Second Supplemental Indenture among the Registrant,
Healthtrust and The First National Bank of Boston, as Trustee, with
respect to the Old 10 1/4% Notes and the Old 8 3/4% Debentures.
4.8* --Resolutions of the Board of Directors of the Registrant dated April
12, 1995 regarding the terms of the New Securities.
5* --Opinion of Stephen T. Braun, Esq., Senior Vice President and Gen-
eral Counsel of the Registrant, regarding the issuance of the regis-
tered securities.
8* --Opinion of Stephen T. Braun, Esq., Senior Vice President and Gen-
eral Counsel of the Registrant, regarding certain United States fed-
eral income tax matters (incorporated in Exhibit 5).
12.1* --Statement regarding computation of Registrant's supplemental ratios
of earnings to fixed charges (incorporated in the Prospectus at p.
15).
12.2** --Statement regarding computation of Registrant's historical ratios
of earnings to fixed charges (filed as Exhibit 12 to the Regis-
trant's Annual Report on Form 10-K for the year ended December 31,
1994, and incorporated herein by reference).
12.3* --Statement regarding computation of Healthtrust's ratios of earnings
to fixed charges.
23.1* --Consent of Ernst & Young LLP with respect to the Registrant.
23.2* --Consent of Ernst & Young LLP with respect to Healthtrust.
23.3* --Consent of Stephen T. Braun, Esq., Senior Vice President and Gen-
eral Counsel of the Registrant (incorporated in Exhibit 5).
24* --Power of Attorney (incorporated in Registration Statement at p. II-
4).
25.1** --The First National Bank of Boston Statement of Eligibility and
Qualification under the Trust Indenture Act of 1939 on Form T-1
(filed as Exhibit 26.1 to Healthtrust's Registration Statement on
Form S-3 dated April 22, 1994, and incorporated herein by refer-
ence).
25.2** --The First National Bank of Chicago Statement of Eligibility and
Qualification under the Trust Indenture Act of 1939 on Form T-1
(filed as Exhibit 26 to the Registrant's Registration Statement on
Form S-3 dated November 10, 1993, and incorporated herein by refer-
ence).
99.1* --Letter of Transmittal and Consent with respect to the Old 10 3/4%
Notes.
99.2* --Letter of Transmittal and Consent with respect to the Old 10 1/4%
Notes.
99.3* --Letter of Transmittal and Consent with respect to the Old 8 3/4%
Debentures.
</TABLE>
(b) Financial Schedules.
Not applicable.
(c) Opinions of Financial Advisors.
Not applicable.
- --------
* filed herewith
** previously filed
II-2
<PAGE>
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(3) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(4) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement or amendment thereto to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Nashville, State of Tennessee, on the 28th day of April, 1995.
Columbia/HCA Healthcare Corporation
/s/ Stephen T. Braun
By: _________________________________
Stephen T. Braun
Senior Vice President and
General Counsel
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen T. Braun, David C. Colby and Richard A.
Lechleiter, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform such and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Thomas F. Frist, Jr. Chairman of the April 28, 1995
_____________________________________ Board
THOMAS F. FRIST, JR., M.D.
/s/ Richard L. Scott President, Chief April 28, 1995
_____________________________________ Executive Officer
RICHARD L. SCOTT (Principal
Executive Officer)
and Director
/s/ David C. Colby Senior Vice April 28, 1995
_____________________________________ President, Chief
DAVID C. COLBY Financial Officer
and Treasurer
(Principal
Financial Officer)
II-4
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Richard A. Lechleiter Vice President and April 28, 1995
____________________________________ Controller
RICHARD A. LECHLEITER (Principal
Accounting
Officer)
/s/ Magdalena Averhoff Director April 14, 1995
____________________________________
MAGDALENA AVERHOFF, M.D.
/s/ J. David Grissom Director April 28, 1995
____________________________________
J. DAVID GRISSOM
/s/ Charles J. Kane Director April 28, 1995
____________________________________
CHARLES J. KANE
/s/ John W. Landrum Director April 15, 1995
____________________________________
JOHN W. LANDRUM
/s/ T. Michael Long Director April 17, 1995
____________________________________
T. MICHAEL LONG
/s/ Darla D. Moore Director April 13, 1995
____________________________________
DARLA D. MOORE
/s/ Rodman W. Moorhead III Director April 28, 1995
____________________________________
RODMAN W. MOORHEAD III
/s/ Carl F. Pollard Director April 13, 1995
____________________________________
CARL F. POLLARD
II-5
<PAGE>
SIGNATURE TITLE DATE
/s/ Carl E. Reichardt Director April 28, 1995
_____________________________________
CARL E. REICHARDT
/s/ Frank S. Royal, M.D. Director April 28, 1995
_____________________________________
FRANK S. ROYAL, M.D.
/s/ Robert D. Walter Director April 28, 1995
_____________________________________
ROBERT D. WALTER
/s/ William T. Young Director April 28, 1995
_____________________________________
WILLIAM T. YOUNG
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS PAGE
NO. NO.
-------- ----
<C> <S> <C>
1* --Form of Dealer Manager Agreement between the Registrant and
the Dealer Manager.
4.1** --Indenture dated as of December 15, 1993 between the Regis-
trant and The First National Bank of Chicago, as Trustee
(filed as Exhibit 4.11 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, and
incorporated herein by reference).
4.2** --Indenture dated as of May 1, 1992 between Healthtrust and
The First National Bank of Boston, as Trustee (filed as Ex-
hibit 4.5 to Healthtrust's Annual Report on Form 10-K for the
fiscal year ended August 31, 1992, and incorporated herein by
reference).
4.3** --Indenture dated as of March 30, 1993 between Healthtrust and
The First National Bank of Boston, as Trustee (filed as
Exhibit 2 to Healthtrust's Registration Statement on Form 8-A
dated April 22, 1993, and incorporated herein by reference).
4.4* --First Supplemental Indenture dated as of April 24, 1995
among the Registrant, Healthtrust and The First National Bank
of Boston, as Trustee, with respect to the Old 10 3/4% Notes.
4.5* --First Supplemental Indenture dated as of April 24, 1995
among the Registrant, Healthtrust and The First National Bank
of Boston, as Trustee, with respect to the Old 10 1/4% Notes
and the Old 8 3/4% Debentures.
4.6* --Form of Second Supplemental Indenture among the Registrant,
Healthtrust and The First National Bank of Boston, as Trust-
ee, with respect to the Old 10 3/4% Notes.
4.7* --Form of Second Supplemental Indenture among the Registrant,
Healthtrust and The First National Bank of Boston, as Trust-
ee, with respect to the Old 10 1/4% Notes and the Old 8 3/4%
Debentures.
4.8* --Resolutions of the Board of Directors of the Registrant
dated April 12, 1995 regarding the terms of the New Securi-
ties.
5* --Opinion of Stephen T. Braun, Esq., Senior Vice President and
General Counsel of the Registrant, regarding the issuance of
the registered securities.
8* --Opinion of Stephen T. Braun, Esq., Senior Vice President and
General Counsel of the Registrant, regarding certain United
States federal tax matters (incorporated in Exhibit 5).
12.1* --Statement regarding computation of Registrant's supplemental
ratios of earnings to fixed charges (incorporated in the Pro-
spectus at p. 15).
12.2** --Statement regarding computation of Registrant's historical
ratios of earnings to fixed charges (filed as Exhibit 12 to
the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1994, and incorporated herein by refer-
ence).
12.3* --Statement regarding computation of Healthtrust's ratios of
earnings to fixed charges.
23.1* --Consent of Ernst & Young LLP with respect to the Registrant.
23.2* --Consent of Ernst & Young LLP with respect to Healthtrust.
23.3* --Consent of Stephen T. Braun, Esq., Senior Vice President and
General Counsel of the Registrant (incorporated in Exhibit
5).
24* --Power of Attorney (incorporated in Registration Statement at
p. II-4).
25.1** --The First National Bank of Boston Statement of Eligibility
and Qualification under the Trust Indenture Act of 1939 on
Form T-1 (filed as Exhibit 26.1 to Healthtrust's Registration
Statement on Form S-3 dated April 22, 1994, and incorporated
herein by reference).
</TABLE>
- --------
* filed herewith
** previously filed
<PAGE>
EXHIBIT 1
April ___, 1995
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Columbia/HCA Healthcare Corporation, a Delaware corporation (the
"Company"), plans to make an offer (the "Exchange Offer") to exchange: (i)
$1,000 principal amount of the Company's Notes due May 15, 2005 (the "New 2005
Notes") plus an amount of cash based on a fixed spread formula for each $1,000
principal amount of 103/4 Subordinated Notes of Healthtrust, Inc.The Hospital
Company ("Healthtrust") due 2002 (the "Old 103/4% Notes") properly tendered,
(ii) $1,000 principal amount of the Company's Notes due May 15, 2000 (the "New
2000 Notes") plus an amount of cash based on a fixed spread formula for each
$1,000 principal amount of 10 1/4% Subordinated Notes of Healthtrust due 2004
(the "Old 10 1/4% Notes") properly tendered, and (iii) $1,000 principal amount
of the Company's Notes due May 15, 2025 (the "New 2025 Notes", and together with
the New 2005 Notes and the New 2004 Notes, the "New Securities") plus an amount
of cash based on a fixed spread formula for each $1,000 principal amount of
83/4% Subordinated Debentures of Healthtrust due 2004 (the "Old 83/4%
Debentures", and together with the Old 103/4% Notes and the Old 10 1/4 Notes,
the "Old Securities") properly tendered, in each case on the terms and subject
to the conditions set forth in the Prospectus (as hereinafter defined).
Concurrently with the Exchange Offer, the Company is soliciting (the
"Solicitation") consents ("Consents") from (i) the holders of the Old 103/4%
Notes to certain amendments to the indenture, date of May 1, 1992, as amended
(the "1992 Indenture"), between Healthtrust and The First National Bank of
Boston, as trustee (the "Old Trustee"), pursuant to which the Old 103/4% Notes
were issued, (ii) the holders of the Old 10 1/4% Notes to certain amendments,
with respect to the Old 10 1/4% Notes, to the indenture, dated as of March 30,
1993, as amended (the "1993 Indenture"), between Healthtrust and the Old
Trustee, pursuant to which the Old 10 1/4% Notes were issued, and (iii) the
holders of the Old 83/4% Debentures to certain amendments, with respect to the
Old 83/4% Debentures, to the 1993 Indenture, pursuant to which the Old 83/4%
Debentures were issued. On or before the Commencement Date (as hereinafter
defined), the Company and the Old Trustee shall enter into indentures
supplementing the 1992 Indenture and the 1993 Indenture (the "First Supplemental
Indentures"). If Consents are
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 2
received from the holders of a majority in principal amount of the Old 103/4%
Notes, the Old 10 1/4% Notes and/or the Old 83/4% Debentures, the proposed
amendments with respect to such issue shall be adopted and indentures
supplementing the 1992 Indenture or the 1993 Indenture, as applicable, shall be
entered into by the Company and the Old Trustee (the "Second Supplemental
Indentures" and together with the First Supplemental Indentures, the
"Supplemental Indentures").
The New Securities are to be issued pursuant to an indenture (the
"Indenture") dated as of December 15, 1993 between the Company and The First
National Bank of Chicago, as trustee (the "Trustee"). The Company has filed, or
will file, with the Securities and Exchange Commission (the "SEC') a
registration statement on Form S-4 for the registration of the New Securities
under the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof pursuant to the Exchange Offer. Such registration statement either has
been declared effective by the SEC or will be declared effective by the SEC
prior to the date that the Prospectus is first distributed to the holders of the
Old Securities (the "Commencement Date"), and the Indenture has been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such
registration statement and the prospectus and consent solicitation constituting
a part thereof, including all documents incorporated therein by reference, as
from time to time amended or supplemented by the filing of documents pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), or the 1933
Act or otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus", respectively, except that if any revised prospectus shall be
provided to the Dealer-Manager by the Company for use in connection with the
Exchange Offer or the Solicitation, whether or not such revised prospectus is
required to be filed by the Company pursuant to Rule 424(b) under the rules and
regulations of the SEC under the 1933 Act (the "1933 Act Regulations"), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Dealer-Manager for such use.
SECTION 1. APPOINTMENT AS DEALER-MANAGER.
-----------------------------
(a) The Company and you hereby agree that you will act, in accordance
with your customary practices, as Dealer-Manager for the Exchange Offer and the
Solicitation.
(b) The Company will not file, use or publish any material in
connection with the Exchange Offer or the Solicitation, or refer to you in any
such material, without first consulting you. The Company will promptly inform
you of any litigation or administrative action with respect to the Exchange
Offer or the Solicitation.
(c) You agree that all actions taken by you as Dealer-Manager will
comply in all material respects with all applicable laws, regulations and rules
of the United States including, without limitation, the applicable rules and
regulations of the registered national securities
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 3
exchanges of which you are a member and of the National Association of
Securities Dealers, Inc.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Company represents and warrants to you as of the date hereof and as
of the Commencement Date as follows:
(a) The Registration Statement either has become effective or will
become effective prior to the Commencement Date, as applicable; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the SEC.
(b) (i) Each document, if any, filed or to be filed pursuant to the
1934 Act and incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the 1934 Act and the applicable
rules and regulations of the SEC thereunder (the "1934 Act Regulations"), (ii)
each part of the Registration Statement, when such part became effective, did
not contain, and each such part, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) the Registration Statement and the Prospectus comply, and,
as amended or supplemented, if applicable, will comply in all material respects
with the 1933 Act and the 1933 Act Regulations and, to the extent applicable,
the 1934 Act and the 1934 Act Regulations, and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this Section 2(b) do not apply (A) to statements or omissions in
the Registration Statement or the Prospectus based upon information relating to
you furnished to the Company in writing by you expressly for use therein or (B)
to that part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the 1939 Act of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
Material Subsidiaries (as hereinafter defined), taken as a whole.
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 4
(d) Each direct and indirect corporate subsidiary of the Company that
is a "Significant Subsidiary" within the meaning of the 1933 Act Regulations
(the "Material Corporate Subsidiaries") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
Material Subsidiaries, taken as a whole.
(e) Each of the partnerships owned or controlled, directly or
indirectly, by the Company that is a "Significant Subsidiary" within the meaning
of the 1933 Act Regulations (the "Material Partnerships," and together with the
Material Corporate Subsidiaries, the "Material Subsidiaries") has been duly
formed and is validly existing under the laws of its jurisdiction of formation
and has the partnership power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties, and each
is duly qualified as a foreign partnership authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and its
Material Subsidiaries, taken as a whole.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The Indenture has been duly qualified under the 1939 Act and has
been duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(b) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(h) The New Securities have been or will be prior to the Closing Date
duly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to the holders of Old Securities who
tender their Old Securities in accordance with the terms of the Exchange Offer,
will be entitled to the benefits of the Indenture, and will be valid and binding
obligations of the Company, in each case enforceable against the Company in
accordance with their respective terms except as (a) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) rights of acceleration, if any, and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 5
(i) The Old Securities that remain outstanding following the Closing
Date will have been duly authorized, executed and authenticated in accordance
with the provisions of the 1992 Indenture or 1993 Indenture, as applicable, and
will be entitled to the benefits of the 1992 Indenture or 1993 Indenture, as
applicable and as amended by the Supplemental Indentures, and will be valid and
binding obligations of the Company, in each case enforceable against the Company
in accordance with their respective terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration, if any, and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(j) The Supplemental Indentures, in each case, will be duly qualified
under the 1939 Act and will be duly authorized, executed and delivered by the
Company and will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(k) The performance by the Company of the Exchange Offer and the
Solicitation, and the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the New Securities, the Supplemental Indentures and the Old
Securities will not contravene any provision of applicable law or the
certificate of incorporation or bylaws of the Company or any agreement or other
instrument binding upon the Company or any of its Material Subsidiaries that is
material to the Company and its Material Subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any Subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of the Exchange Offer or
the Solicitation or its obligations under this Agreement, the Indenture, the New
Securities, the Supplemental Indentures or the Old Securities except such as may
have been made or obtained prior to the Commencement Date and such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the New Securities.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its Material Subsidiaries, taken as a whole, from that set forth in
the Prospectus.
(m) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its Material
Subsidiaries is a party or to which any of the properties of the Company or any
of its Material Subsidiaries is subject
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 6
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(n) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(o) The Company and its Material Subsidiaries are (a) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (b) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses, and (c) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its Material Subsidiaries,
taken as a whole.
(p) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its Material Subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a material adverse effect on the
Company and its Material Subsidiaries, taken as a whole.
(q) The Company has sufficient funds available to pay the cash portion
of the purchase price for the Old Securities tendered pursuant to the Exchange
Offer.
(r) The Company has complied with and will comply with, in all material
respects, all laws, regulations and rules and corporate requirements applicable
to the Exchange Offer, the Solicitation and this Agreement and the Company has
provided or filed, as applicable, all exchange and other notices required to be
provided or filed by us in connection with the Exchange Offer and the
Solicitation. The Exchange Offer and the Solicitation with respect to the Old
103/4% Notes are in full compliance with all provisions of the 1992 Indenture,
and the
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 7
Exchange Offer and the Solicitation with respect to the Old 10 1/4% Notes and
the 83/4% Debentures are in full compliance with all provisions of the 1993
Indenture. If Consents are received from the holders of a majority in principal
amount of the outstanding Old 103/4% Notes, the amendments to the 1992 Indenture
relating to the Old 103/4 Notes described in the Prospectus will be validly
approved, the 1992 Indenture will be validly amended and the execution and
delivery of the Supplemental Indenture with respect thereto will comply with all
provisions of the 1992 Indenture. If Consents are received from the holders of a
majority in principal amount of the outstanding Old 10 1/4% Notes, the
amendments to the 1993 Indenture relating to the Old 103/4% Notes described in
the Prospectus will be validly approved, the 1993 Indenture will be validly
amended and the execution and delivery of the Supplemental Indenture with
respect thereto will comply with all provisions of the 1993 Indenture. If
Consents are received from the holders of a majority in principal amount of the
outstanding Old 83/4% Debentures, the amendments to the 1993 Indenture relating
to the Old 83/4% Debentures described in the Prospectus will be validly
approved, the 1993 Indenture will be validly amended and the execution and
delivery of the Supplemental Indenture with respect thereto will comply with all
provisions of the 1993 Indenture.
SECTION 3. COVENANTS OF THE COMPANY.
------------------------
The Company covenants with you as follows:
(a) The Company will notify you immediately (i) of the effectiveness of
any amendment to the Registration Statement prior to the date that the New
Securities are issued pursuant to the Exchange Offer (the "Closing Date"), (ii)
of the transmittal to the SEC for filing of any supplement to the Prospectus or
any document to be filed pursuant to the 1934 Act which will be incorporated by
reference in the Prospectus prior to the Closing Date, (iii) of the receipt of
any comments from the SEC with respect to the Registration Statement or the
Prospectus, (iv) of any request by the SEC for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, and (v) of the issuance by the SEC prior to the Closing Date of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings prior to the Closing Date for that purpose. The
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will give you advance notice of its intention to file
any amendment to the Registration Statement or to make any amendment or
supplement to the Prospectus prior to the Closing Date, whether by the filing of
documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will furnish
you with copies of any such amendment or supplement or other documents proposed
to be filed in advance of such proposed filing.
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 8
(c) The Company will deliver to you as many conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as you may reasonably
request. The Company will furnish to you as many copies of the Prospectus (as
amended or supplemented) as you shall reasonably request so long as you are
required to deliver a Prospectus in connection with the Exchange Offer.
(d) If at any time prior to the Closing Date any event shall occur or
condition exist as a result of which it is necessary, in the reasonable opinion
of counsel for you or counsel for the Company, to further amend or supplement
the Prospectus in order that the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the reasonable opinion of either such counsel, to amend or
supplement the Registration Statement or the Prospectus in order to comply with
the requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations, immediate notice shall be given, and confirmed in writing,
to you to cease the Exchange Offer and the Solicitation, and the Company will
promptly amend the Registration Statement and the Prospectus, whether by filing
documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(e) The Company will endeavor, in cooperation with you, to qualify the
New Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as you may designate,
and will maintain such qualifications in effect for as long as may be required
for the distribution of the New Securities pursuant to the Exchange Offer;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will file such
statements and reports as may be required by the laws of each jurisdiction in
which the New Securities have been qualified as above provided. The Company will
promptly advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the New Securities for sale in
any such state or jurisdiction or the initiating or threatening of any
proceeding for such purpose.
(f) From the date hereof through the Closing Date, the Company will
file promptly all documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act during such period.
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 9
(g) On the Commencement Date and on the Closing Date, you shall receive
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to you:
(1) Opinion of Company Counsel. The opinion of Stephen T. Braun,
--------------------------
Senior Vice President and General Counsel of the Company, to the effect
that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its Material Subsidiaries,
taken as a whole;
(ii) each Material Corporate Subsidiary has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its Material Subsidiaries, taken as a whole;
(iii) each of the Material Partnerships has been duly formed and
is validly existing under the laws of its jurisdiction of formation and
has the partnership power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties,
and each is duly qualified as a foreign partnership authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the Company and its Material Subsidiaries, taken as a whole;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Indenture has been duly qualified under the 1939 Act and
has been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 10
terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(vi) the New Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered in exchange for the Old Securities in accordance
with the Exchange Offer will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, in each case
enforceable against the Company in accordance with their respective terms
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (b)
rights of acceleration, if any, and the availability of equitable
remedies may be limited by equitable principles of general applicability;
(vii) the First Supplemental Indentures as of the Commencement Date
and the Second Supplemental Indentures as of the Closing Date have been
duly authorized and delivered by the Company, constitute valid amendments
to the 1992 Indenture and the 1993 Indenture permitted by the terms of
the 1992 Indenture or the 1993 Indenture, as the case may be, and the
1992 Indenture and the 1993 Indenture, in each case as amended by the
applicable Supplemental Indenture, constitute valid and binding
obligations of the Company, in each case enforceable against the Company
in accordance with their respective terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) rights of
acceleration, if any, and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(viii) the performance by the Company of the Exchange Offer and the
Solicitation and the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the New Securities, the Supplemental Indentures and the Old
Securities will not contravene any provision of applicable law or the
certificate of incorporation or bylaws of the Company or, to the best of
such counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its Material Subsidiaries that is material to the
Company and its Material Subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over the Company or, to the best of such counsel's
knowledge, any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations under this
Agreement, the Indenture, the New Securities, the Supplemental Indentures
or the Old Securities except such as may
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 11
be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the New Securities;
(ix) the statements (1) in the Prospectus under the captions "The
Proposed Amendments" and "Description of New Securities" and (2) in the
Registration Statement under Item 20, (3) in "Item 3 - Legal Proceedings"
of the Company's most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (4) in "Item 1 - Legal Proceedings" of
Part II of the Company's quarterly reports on Form 10-Q, if any, filed
since such annual report, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(x) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or
any of its Material Subsidiaries is a party or to which any of the
properties of the Company or any of its Material Subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or incorporated by reference or of
any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be
filed or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as required;
(xi) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended;
(xii) such counsel (1) is of the opinion that each document, if
any, filed pursuant to the 1934 Act and incorporated by reference in the
Prospectus (except for financial statements and schedules included
therein as to which such counsel need not express any opinion), complied
when so filed as to form in all material respects with the 1934 Act and
the applicable rules and regulations of the Commission thereunder and (2)
is of the opinion that the Registration Statement and Prospectus (except
for financial statements and schedules as to which such counsel need not
express any opinion), comply as to form in all material respects with the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations.
In addition, such counsel shall state his belief that (1) each
part of the Registration Statement (except for financial statements and
schedules as to which such counsel need not express any belief and except
for that part of the Registration Statement that
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 12
constitutes the Form T-1 heretofore referred to), when such part became
effective did not, and, as of the date such opinion is delivered, does
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) the Prospectus (except for
financial statements and schedules as to which such counsel need not
express any belief) as of the date such opinion is delivered does not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Such counsel may state that his belief is based upon his participation in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are
without independent check or verification, except as specified.
(2) Opinion of Counsel to the Dealer-Manager. The opinion of
----------------------------------------
Jenkens & Gilchrist, a Professional Corporation, counsel for you,
covering the matters referred to in subparagraphs (v), (vi), (ix) (but
only as to the statements in the Prospectus under "The Proposed
Amendments" and "Description of New Securities") and (xii) (2) of
paragraph (1) above.
In addition, such counsel shall state their belief that (1) each
part of the Registration Statement (except for financial statements and
schedules as to which such counsel need not express any belief and except
for that part of the Registration Statement that constitutes the Form T-1
heretofore referred to), when such part became effective did not, and, as
of the date such opinion is delivered, does not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (2) the Prospectus (except for financial statements and
schedules as to which such counsel need not express any belief) as of the
date such opinion is delivered does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading. Such counsel may state that their belief
is based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto (but
not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated
therein by reference), but are without independent check or verification,
except as specified.
(h) On the Commencement Date and on the Closing Date, you shall receive
a letter from the Company's independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" with respect to the financial
<PAGE>
Salomon Brothers Inc
April ____, 1995
Page 13
statements and certain financial information contained in or incorporated by
reference into the Prospectus.
(i) On the Commencement Date and on the Closing Date, you shall receive
a certificate signed by the President, the Chief Financial Officer, any Vice
President, the Treasurer or an Assistant Treasurer of the Company, dated as of
the date hereof, to the effect that (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any material adverse change in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, (ii) the other representations and warranties of the Company
contained in Section 2 hereof are true and correct with the same force and
effect as though expressly made at and as of the date of such certificate, (iii)
the Company has performed or complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the date of
such certificate, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the SEC.
SECTION 5. CONDITIONS OF OBLIGATIONS.
-------------------------
Your obligation to act as Dealer-Manager with respect to the Exchange
Offer and the Solicitation shall at all times be subject to the conditions that:
(a) All statements of the Company contained herein are now, and at all
times during the period of the Exchange Offer and the Solicitation shall be,
true and correct in all material respects, it being understood that your
agreeing to act as Dealer-Manager at a time when you should know that any such
statement is or may be untrue or incorrect in a material respect shall be
without prejudice to your right subsequently to cease so to act by reason of
such untruth or incorrectness;
(b) The Company at all times shall have performed all of its material
obligations hereunder and thereunder theretofore required to have been
performed;
(c) No stop order or restraining order shall have been issued and no
litigation shall have been commenced or threatened with respect to the Exchange
Offer, the Solicitation or with respect to any of the transactions in connection
with, or contemplated by, the Exchange Offer, the Solicitation or this Agreement
before any agency, court or other governmental body of any jurisdiction which
you, in good faith after consultation with us, believe renders it inadvisable
for you to continue to act hereunder; and
(d) The Company shall have obtained all consents, approvals,
authorizations and orders of, and shall have duly made all registrations,
qualifications and filings with, any court
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 14
or regulatory authority or other governmental agency or instrumentality in the
United States required in connection with the making and consummation of the
Exchange Offer and the execution, delivery and performance of this Agreement,
and will have available funds, and authorization to use such funds under
applicable law, to pay the cash portion of the purchase price of the Old
Securities that we may become committed to purchase pursuant to the Exchange
Offer and all related fees and expenses.
SECTION 6. INDEMNIFICATION.
---------------
We agree to indemnify and hold harmless you and your affiliates, your and
your affiliates' respective directors, officers, agents and employees and each
other person, if any, controlling you or any of your affiliates, as provided in
the letter agreement attached hereto as EXHIBIT A.
SECTION 7. PAYMENT OF EXPENSES.
-------------------
We agree to pay you a fee in connection with the Exchange Offer and the
Solicitation as set forth on SCHEDULE A hereto, and promptly reimburse you for
your reasonable out-of-pocket expenses in preparing for and performing your
functions as Dealer-Manager, as well as all advertising, printing and mailing
expenses, exchange agent expenses and information agent expenses. We further
agree to be responsible for the fees, costs and out-of-pocket expenses of your
counsel for their representation of you in connection therewith up to a maximum
amount of $40,000.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
--------------------------------------------------------------
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of you or any controlling
person of you, or by or on behalf of the Company, and shall survive delivery of
and payment for any of the New Securities, the obtaining of any Consents and the
execution and delivery of the Supplemental Indentures.
SECTION 9. NOTICES.
-------
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
<PAGE>
Salomon Brothers Inc
April___, 1995
Page 15
If to the Company:
Columbia/HCA Healthcare Corporation
One Park Plaza
Nashville, Tennessee 37203
Attention: General Counsel
Fax: 615-320-2598
If to you:
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Attention: Liability Management Group
Fax: 212-783-2319
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 9.
SECTION 10. GENERAL.
-------
(a) We agree not to use the name Salomon Brothers Inc or refer to you
or your relationship with us except with your prior written consent to the form
of such use or reference. There shall be no fee for any such permitted use or
reference other than as set forth above. We further agree not to disclose the
provisions of this Agreement to any other person unless we reasonably determine
that the failure to make such disclosure would violate applicable law or
otherwise adversely affect our interests.
(b) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original.
(c) The representations, warranties and indemnifications contained or
referenced in this Agreement shall continue in effect after completion of the
Exchange Offer and the Solicitation and shall be effective even if we withdraw,
abandon or terminate any or all of the Exchange Offer or the Solicitation.
(d) THIS AGREEMENT AND THE RELATED INDEMNIFICATION AGREEMENT REFERRED
TO ABOVE SHALL BE DEEMED MADE IN NEW YORK. SUCH AGREEMENTS SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO SUCH STATE'S RULES
CONCERNING CONFLICTS OF LAWS. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
<PAGE>
Salomon Brothers Inc
April___,1995
Page 16
CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS ENGAGEMENT OR ANY
TRANSACTION OR CONDUCT IN CONNECTION HEREWITH, IS WAIVED.
<PAGE>
Salomon Brothers Inc
April___,1995
Page 17
Very truly yours,
COLUMBIA/HCA HEALTHCARE
CORPORATION
By: ______________________________
Name:______________________________
Title:_____________________________
Accepted and agreed to as
of the date of this letter:
SALOMON BROTHERS INC
By: ____________________________
Name: Marwan Marshi
Title: Vice President
<PAGE>
Schedule A
----------
1. With respect to any issue of Old Securities of which not more than
50% of the principal amount outstanding at the commencement of the Exchange
Offer (the "Outstanding Principal Amount") is tendered, the Company shall pay a
fee in the amount of .45% of the principal amount of the Old Securities of such
issue so tendered.
2. With respect to any issue of Old Securities of which more than 50%
of the Outstanding Principal Amount is tendered, the Company shall pay a fee as
follows:
(a) with respect to the Old Securities that constitute 0% to 50% of the
Outstanding Principal Amount of the Old Securities of such issue so
tendered, a fee in the amount of .6% of the principal amount of such
securities;
(b) with respect to the Old Securities that constitute 50.01% to 70% of
the Outstanding Principal Amount of the Old Securities of such issue so
tendered, a fee in the amount of .75% of the principal amount of such
securities;
(c) with respect to the Old Securities that constitute 70.01% to 90% of
the Outstanding Principal Amount of the Old Securities of such issue so
tendered, a fee in the amount of .9% of the principal amount of such
securities; and
(d) with respect to the Old Securities that constitute 90.01% to 100%
of the Outstanding Principal Amount of the Old Securities of such issue
so tendered, a fee in the amount of .7% of the principal amount of such
securities.
<PAGE>
EXHIBIT A
SALOMON BROTHERS INC
SEVEN WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
Ladies and Gentlemen:
In connection with your engagement to assist Columbia/HCA Healthcare
Corporation (the "Company") with the matters set forth in the Dealer-Manager
Agreement between you and the Company of even date herewith, including
modifications or future additions to such engagement and related activities
prior to this date (the "Dealer-Manager Agreement"), the Company agrees that it
will indemnify and hold harmless you and your affiliates, any director, officer,
agent or employee of you or any of your affiliates and each other person, if
any, controlling you or any of your affiliates (hereinafter collectively
referred to as "you" and "your"), to the full extent lawful, from and against,
and that you shall have no liability to the Company or its owners, parents,
creditors or security holders for, any losses, expenses, claims or proceedings
including shareholder actions (hereinafter collectively referred to as "losses")
(i) related to or arising out of (A) written information provided by the
Company, its employees or its other agents, which either the Company or you
provide to any actual or potential buyers, sellers, investors or offerees, (B)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (as defined in the Dealer-Manager Agreement) as it
became effective or in any amendment or supplement thereof, or in the Prospectus
(as defined in the Dealer-Manager Agreement), or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading (in each case other than
statements or omissions relating to you furnished to the Company in writing by
you expressly for use therein) or (C) other action or failure to act by the
Company, its employees or its other agents or by you at the Company's request or
with the Company's consent, or (ii) otherwise related to or arising out of such
engagement or any transaction or conduct in connection therewith except that
this clause (ii) shall not apply with respect to any losses that are finally
judicially determined to have resulted primarily from your bad faith or gross
negligence.
You agree to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity referred to in clause (i)(B) above from the Company to you, but only
with reference to information relating to you furnished to the Company in
writing by you expressly for use in the Registration Statement and Prospectus
(each as defined in the Dealer-Manager Agreement) (including any omission or
alleged
<PAGE>
omission to include with such information a material fact required to be
stated therein or necessary to make statements therein not misleading).
In the event that the foregoing indemnity is unavailable to the party
seeking indemnification (the "indemnified party") for any reason, the party
against whom indemnification is sought (the "indemnifying party") agrees to
contribute to any losses related to or arising out of such engagement or any
transaction or conduct in connection therewith. For such losses referred to in
clause (i) of the preceding paragraph, the indemnifying party shall contribute
in such proportion as is appropriate to reflect the relative benefits received
(or anticipated to be received) by the indemnifying party and the other parties
from the actual or proposed transaction giving rise to such engagement;
provided, however, that the indemnifying party shall not be responsible for any
amounts in excess of the amount of the benefits received (or anticipated to be
received) by such indemnifying party. For any other losses, or for losses
referred to in clause (i) if the allocation provided by the immediately
preceding sentence is unavailable for any reason, the indemnifying party shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also such indemnifying party's relative fault in
connection with the statements, omissions or other conduct which resulted in
such losses, as well as any other relevant equitable considerations. Relative
benefits received (or anticipated to be received) by the Company shall be deemed
to be equal to the aggregate consideration payable by to it in cash or
securities as a result of such transaction or proposed transaction, and benefits
received by you shall be deemed to be equal to the compensation payable by the
Company to you in connection with such engagement. Relative fault shall be
determined by reference to, among other things, whether any alleged untrue
statement or omission or any other alleged conduct relates to information
provided by the Company or other conduct by the Company (or its employees or
other Agents) on the one hand or by you on the other hand. You and the Company
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to above. Notwithstanding
anything to the contrary herein, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) or the 1933 Act (as
defined in the Dealer-Manager Agreement)) shall be entitled to contribution from
any person who was not guilty of fraudulent misrepresentation. For purposes of
this paragraph, each person who controls you within the meaning of the 1933 Act
of the 1934 Act (as defined in the Dealer-Manager Agreement) shall have the same
rights to contribution as you, and each person who controls the Company within
the meaning of the 1933 Act or the 1934 Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject to the
immediately preceding sentence of this paragraph.
No indemnifying party shall, without the prior written consent of the
indemnified party settle any pending or threatened claim or proceeding related
to or arising out of such engagement or transactions or conduct in connection
therewith (whether or not you are a party to such claim or proceeding) unless
such settlement includes a provision unconditionally releasing such indemnified
party from and holding such indemnified party
<PAGE>
harmless against all liability in respect of claims by any releasing party
related to or arising out of such engagement or any transaction or conduct in
connection therewith. The indemnifying party will also promptly reimburse the
indemnified party for all reasonable expenses (including counsel fees) as they
are incurred by such indemnified party in connection with investigating,
preparing or defending, or providing evidence in, any pending or threatened
claim or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not such indemnified party is a party to such claim
or proceeding) or in enforcing this agreement provided, however, that any
-------- -------
amounts so reimbursed shall be subject to repayment in proportion to the
percentage of any contribution required of such indemnified party on account of
such indemnified party having been financially judicially determined to have
acted in bad faith or with gross negligence.
The foregoing agreement shall be in addition to any rights that you or the
Company may have at common law or otherwise. Solely for purposes of enforcing
this agreement, you and the Company hereby consent to personal jurisdiction,
service and venue in any court in which any claim or proceeding which is subject
to this agreement is brought. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
CLAIM OR PROCEEDING ARISING HEREUNDER IS WAIVED. This agreement shall remain in
full force and effect following the completion or termination of such
engagement.
Agreed: Very truly yours,
SALOMON BROTHERS INC COLUMBIA/HCA HEALTHCARE
CORPORATION
By: By:
------------------------ -----------------------------------------
Name: Name:
---------------------- ---------------------------------------
Title: Title:
--------------------- --------------------------------------
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
TO
THE FIRST NATIONAL BANK OF BOSTON, TRUSTEE
-------------------------
FIRST SUPPLEMENTAL INDENTURE
TO
INDENTURE OF HEALTHTRUST, INC. - THE HOSPITAL COMPANY
DATED AS OF APRIL 24, 1995
---------------------------
Supplementing the Indenture, dated as of May 1, 1992, by and between
Healthtrust, Inc. - The Hospital Company ("Healthtrust"), and The First National
Bank of Boston, Trustee (the "Trustee"), relating to the 10 3/4% Subordinated
Notes due May 1, 2002, of Healthtrust.
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as
of April 24, 1995, by and among Healthtrust, Inc. - The Hospital Company, a
corporation duly organized and existing under the laws of the State of Delaware
("Healthtrust" or the "Company"), having its principal offices at One Park
Plaza, Nashville, Tennessee 37203, Columbia/HCA Healthcare Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
("Columbia"), having its principal offices at One Park Plaza, Nashville,
Tennessee 37203, and The First National Bank of Boston, a national banking
association duly organized and existing under the laws of the United States of
America (the "Trustee"), having its principal corporate trust offices at 150
Royall Street, Canton, Massachusetts 02021.
WHEREAS, Healthtrust duly executed and delivered to The First National Bank
of Boston, Trustee, that certain Indenture, dated as of May 1, 1992, (the
"Indenture"), relating to $500,000,000 original principal amount of its 10 3/4%
Subordinated Notes due May 1, 2002 (the "Securities");
WHEREAS, effective as of April 24, 1995, pursuant to the terms of that
certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of
October 4, 1994, by and among Columbia, COL Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Columbia ("Merger Sub"), and
Healthtrust, Merger Sub was merged with and into Healthtrust, which thereby
became a wholly owned subsidiary of Columbia (the "Merger"), and the shares of
Common Stock, $.001 par value, of Healthtrust were exchanged for shares of
Common Stock, $.01 par value, of Columbia at the Exchange Ratio defined and
specified in the Merger Agreement;
WHEREAS, following the Merger and pursuant to Section 801(a)(i) of the
Indenture "the Company shall be the continuing corporation...," and in
accordance with Section 801(b) of the Indenture "immediately after giving effect
to such transaction... the Company... (i) shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company immediately
prior to such transaction and (ii) could incur at least $1.00 of additional
Indebtedness...;" and therefore, no further action on the part of the Company is
required under the Indenture to consummate the Merger.
WHEREAS, immediately following the Merger and pursuant to Section 901(b)
and (c) of the Indenture, the Company has agreed to amend, supplement and
clarify the Indenture to provide an additional provision for the benefit and
protection of the Holders of the Securities following a merger transaction in
which the Company survives, but becomes a wholly-owned subsidiary of the
acquiring corporation (the "Parent Corporation") by requiring the Parent
Corporation to assume, as co-obligor, the obligations under the Indenture.
WHEREAS, pursuant to the Merger, the Company survived and became a wholly-
owned subsidiary of Columbia and pursuant to Section 803 (as added herein) and
Section 901, the Company and Columbia desire to execute and deliver a
supplemental indenture to the Trustee providing for, among other matters, the
assumption by Columbia, as co-obligor, of the due and punctual payment of the
principal of (and premium, if any) and interest on all the Securities and
2
<PAGE>
the performance or observance of every covenant agreement and obligation of the
Indenture on the part of the Company be performed or observed;
WHEREAS, pursuant to Sections 901 and 903 of the Indenture, this
Supplemental Indenture may be executed and delivered by the Trustee, Healthtrust
and Columbia without the consent of the Holders of the Securities;
WHEREAS, the Boards of Directors of Columbia and Healthtrust have
authorized the execution of this Supplemental Indenture and its delivery to the
Trustee; and
WHEREAS, all acts and things necessary to make this Supplemental Indenture
the valid, binding and legal obligation of the Company and Columbia in
accordance with its terms have been done.
NOW, THEREFORE, in consideration of the premises and mutual covenants, it
is mutually agreed for the equal and proportionate benefit of all Holders of the
Securities as follows. Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Indenture.
ARTICLE I
AMENDMENT TO THE INDENTURE
Section 1.1. Immediately following the Merger and pursuant to Sections
901(b) and (c) of the Indenture, the Board of Directors of the Company approved
an amendment to the Indenture to provide an additional provision in the
Indenture for the benefit and protection of the Holders of the Securities
following a merger transaction in which the Company survives, but becomes a
wholly-owned subsidiary of the Parent Corporation by requiring the Parent
Corporation to assume, as co-obligor, the obligations under the Indenture as set
forth below.
Section 1.2. Article Eight is hereby amended to add the following section:
Section 8.03 Co-obligor.
----------
Upon any merger transaction in which the Company is the surviving
corporation but becomes a wholly-owned subsidiary of an acquiring
corporation (the "Parent Corporation"), the Parent Corporation shall
assume, as co-obligor, the obligations of the Company under the
Indenture, and may exercise every right and power of the Company under
this Indenture with the same effect as if such Parent Corporation had
been named as the Company herein.
3
<PAGE>
ARTICLE II
ASSUMPTION OF HEALTHTRUST'S OBLIGATIONS BY COLUMBIA
Section 2.1. Simultaneous with the Merger and pursuant to Section 803 (as
added herein) and Section 901 of the Indenture, Columbia, a corporation duly
organized and validly existing under the laws of the State of Delaware, hereby
expressly assumes, as co-obligor, the due and punctual payment of the principal
of (and premium, if any, on) and interest on all the Securities and the
performance and observance of every covenant, agreement and obligation of the
Indenture to be performed or observed by the Company.
Section 2.2. The form of Securities set forth in Section 201 of the
Indenture shall be amended for Securities issued after the date of this
Supplemental Indenture by adding the following legend thereto: "Effective April
24, 1995, Columbia/HCA Healthcare Corporation assumed, as co-obligor, all
obligations of Healthtrust, Inc. - The Hospital Company under this Security and
under the related Indenture."
Section 2.3. Columbia hereby represents and warrants that, immediately
after the Effective Time (as defined in the Merger Agreement) of the Merger, no
Event of Default and no event which, after notice or lapse of time or both,
would become an Event of Default, has occurred or is continuing.
Section 2.4. The indebtedness represented by the Securities and the
payment of the Securities are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all senior indebtedness of
Columbia.
ARTICLE III
MISCELLANEOUS
Section 3.1. The Indenture shall be deemed to be amended and modified as
herein provided, but, except as modified by this Supplemental Indenture, the
Indenture shall continue in full force and effect.
Section 3.2. The Indenture and this Supplemental Indenture shall be read,
taken and construed as one and the same instrument.
Section 3.3. This Supplemental Indenture shall become effective as of the
date first written above.
Section 3.4. The Trustee makes no representations as to the validity or
sufficiency of this Supplemental Indenture, except the due and valid execution
hereof by the Trustee. The Trustee's execution of this Supplemental Indenture
should not be construed to be an approval or disapproval of the advisability of
the action taken by Columbia and Healthtrust with respect to the Merger.
4
<PAGE>
Section 3.5. This Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
Section 3.6. This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and duly attested, all as of the day and year first above
written.
COLUMBIA/HCA HEALTHCARE CORPORATION
By: /s/ Stephen T. Braun
--------------------------------
Stephen T. Braun
Senior Vice President
Attest:
/s/ Rachel A. Seifert
- ------------------------------
Rachel A. Seifert
Assistant Secretary
HEALTHTRUST, INC. - THE HOSPITAL
COMPANY
By: /s/ Stephen T. Braun
--------------------------------
Stephen T. Braun
Senior Vice President
Attest:
/s/ Rachel A. Seifert
- ------------------------------
Rachel A. Seifert
Assistant Secretary
THE FIRST NATIONAL BANK OF BOSTON, Trustee
By: /s/ Donna L. Germano
--------------------------------------
Name: Donna L. Germano
Title: Account Manager
Attest:
/s/ J. Mogavero
- ------------------------------
J. Mogavero
Assistant Cashier
5
<PAGE>
COMMONWEALTH OF KENTUCKY )
)SS
COUNTY OF JEFFERSON )
On the 24th day of April, 1995, before me personally came Stephen T. Braun
and Rachel A. Seifert, to me known, who, being by me duly sworn, did depose and
say that they are a Senior Vice President and Assistant Secretary, respectively,
of Columbia/HCA Healthcare Corporation, one of the corporations described in and
which executed the foregoing instrument.; that they know the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that is was so affixed by authority of the Board of Directors of said
corporation; and that they signed their respective names thereto by like
authority.
/s/ Notary Public
-----------------------------------
Notary Public
COMMONWEALTH OF KENTUCKY )
)SS
COUNTY OF JEFFERSON )
On the 24th day of April, 1995, before me personally came Stephen T. Braun
and Rachel A. Seifert, to me known, who, being by me duly sworn, did depose and
say that they are a Senior Vice President and Assistant Secretary, respectively,
of Healthtrust, Inc. -The Hospital Company, one of the corporations described in
and which executed the foregoing instrument; that they know the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that is was so affixed by authority of the Board of Directors of said
corporation; and that they signed their respective names thereto by like
authority.
/s/ Notary Public
-----------------------------------
Notary Public
6
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
TO
THE FIRST NATIONAL BANK OF BOSTON, TRUSTEE
--------------------------
FIRST SUPPLEMENTAL INDENTURE
TO
INDENTURE OF HEALTHTRUST, INC. - THE HOSPITAL COMPANY
DATED AS OF APRIL 24, 1995
--------------------------
Supplementing the Indenture, dated as of March 30, 1993, by and between
Healthtrust, Inc. - The Hospital Company ("Healthtrust"), and The First National
Bank of Boston, Trustee (the "Trustee"), relating to the 10 1/4% Subordinated
Notes due April 15, 2004 and 8 3/4% Subordinated Debentures due March 15, 2005,
of Healthtrust.
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as
of April 24, 1995, by and among Healthtrust, Inc. - The Hospital Company, a
corporation duly organized and existing under the laws of the State of Delaware
("Healthtrust" or the "Company"), having its principal offices at One Park
Plaza, Nashville, Tennessee 37203, Columbia/HCA Healthcare Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
("Columbia"), having its principal offices at One Park Plaza, Nashville,
Tennessee 37203, and The First National Bank of Boston, a national banking
association duly organized and existing under the laws of the United States of
America (the "Trustee"), having its principal corporate trust offices at 150
Royall Street, Canton, Massachusetts 02021.
WHEREAS, Healthtrust duly executed and delivered to The First National Bank
of Boston, Trustee, that certain Indenture, dated as of March 30, 1993, (the
"Indenture"), relating to $200,000,000 original principal amount of its 10 1/4%
Subordinated Notes due April 15, 2004 and $300,000,000 original principal amount
of its 8 3/4% Subordinated Debentures due March 15, 2005 (collectively the
"Securities");
WHEREAS, effective as of April 24, 1995, pursuant to the terms of that
certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of
October 4, 1994, by and among Columbia, COL Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Columbia ("Merger Sub"), and
Healthtrust, Merger Sub was merged with and into Healthtrust, which thereby
became a wholly owned subsidiary of Columbia (the "Merger"), and the shares of
Common Stock, $.001 par value, of Healthtrust were exchanged for shares of
Common Stock, $.01 par value, of Columbia at the Exchange Ratio defined and
specified in the Merger Agreement;
WHEREAS, following the Merger and pursuant to Section 10.01(a)(i) of the
Indenture "the Company shall be the continuing corporation...," and in
accordance with Section 10.01(b) of the Indenture "immediately after giving
effect to such transaction... the Company... (i) shall have a Consolidated Net
Worth equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction and (ii) could incur at least $1.00 of
additional Indebtedness...;" and therefore, no further action on the part of the
Company is required under the Indenture to consummate the Merger.
WHEREAS, immediately following the Merger and pursuant to Sections 9.01(c)
and 9.01 (e) of the Indenture, the Company has agreed to amend, supplement and
clarify the Indenture to provide an additional provision for the benefit and
protection of the Holders of the Securities following a merger transaction in
which the Company survives, but becomes a wholly-owned subsidiary of the
acquiring corporation (the "Parent Corporation") by requiring the Parent
Corporation to assume, as co-obligor, the obligations under the Indenture.
WHEREAS, pursuant to the Merger, the Company survived and became a wholly-
owned subsidiary of Columbia and pursuant to Sections 9.01 and 10.03 (as added
herein) the Company and Columbia desire to execute and deliver a supplemental
indenture to the Trustee providing for, among other matters, the assumption by
Columbia, as co-obligor, of the due and punctual payment of the principal of
(and premium, if any) and interest on all the Securities and the
2
<PAGE>
performance or observance of every covenant agreement and obligation of the
Indenture on the part of the Company to be performed or observed;
WHEREAS, pursuant to Sections 9.01 and 9.03 of the Indenture, this
Supplemental Indenture may be executed and delivered by the Trustee, Healthtrust
and Columbia without the consent of the Holders of the Securities;
WHEREAS, the Boards of Directors of Columbia and Healthtrust have
authorized the execution of this Supplemental Indenture and its delivery to the
Trustee; and
WHEREAS, all acts and things necessary to make this Supplemental Indenture
the valid, binding and legal obligation of the Company and Columbia in
accordance with its terms have been done.
NOW, THEREFORE, in consideration of the premises and mutual covenants, it
is mutually agreed for the equal and proportionate benefit of all Holders of the
Securities as follows. Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Indenture.
ARTICLE I
AMENDMENT TO THE INDENTURE
Section 1.1. Immediately following the Merger and pursuant to Sections
9.01(c) and 9.01 (e) of the Indenture, the Board of Directors of the Company
approved an amendment to the Indenture to provide an additional provision in the
Indenture for the benefit and protection of the Holders of the Securities
following a merger transaction in which the Company survives, but becomes a
wholly-owned subsidiary of the Parent Corporation by requiring the Parent
Corporation to assume, as co-obligor, the obligations under the Indenture as set
forth below.
Section 1.2. Article Ten is hereby amended to add the following section:
Section 10.03. Co-obligor. Upon any merger transaction in which the
--------------------------
Company is the surviving corporation but becomes a wholly-owned
subsidiary of an acquiring corporation (the "Parent Corporation"), the
Parent Corporation shall assume, as co-obligor, the obligations of the
Company under the Indenture, and may exercise every right and power of
the Company under this Indenture with the same effect as if such
Parent Corporation had been named as the Company herein.
3
<PAGE>
ARTICLE II
ASSUMPTION OF HEALTHTRUST'S OBLIGATIONS BY COLUMBIA
Section 2.1. Simultaneous with the Merger and pursuant to Section 9.01 and
Section 10.03 (as added herein) of the Indenture, Columbia, a corporation duly
organized and validly existing under the laws of the State of Delaware, hereby
expressly assumes, as co-obligor, the due and punctual payment of the principal
of (and premium, if any, on) and interest on all the Securities and the
performance and observance of every covenant, agreement and obligation of the
Indenture to be performed or observed by the Company.
Section 2.2. The form of Securities set forth in Section 2.03 of the
Indenture shall be amended for Securities issued after the date of this
Supplemental Indenture by adding the following legend thereto: "Effective April
24, 1995, Columbia/HCA Healthcare Corporation assumed, as co-obligor, all
obligations of Healthtrust, Inc. - The Hospital Company under this Security and
under the related Indenture."
Section 2.3. Columbia hereby represents and warrants that, immediately
after the Effective Time (as defined in the Merger Agreement) of the Merger, no
Event of Default and no event which, after notice or lapse of time or both,
would become an Event of Default, has occurred or is continuing.
Section 2.4. The indebtedness represented by the Securities and the
payment of the Securities are hereby expressly made subordinate and subject in
right of payment to the prior payment in full of all senior indebtedness of
Columbia.
ARTICLE III
MISCELLANEOUS
Section 3.1. The Indenture shall be deemed to be amended and modified as
herein provided, but, except as modified by this Supplemental Indenture, the
Indenture shall continue in full force and effect.
Section 3.2. The Indenture and this Supplemental Indenture shall be read,
taken and construed as one and the same instrument.
Section 3.3. This Supplemental Indenture shall become effective as of the
date first written above.
Section 3.4. The Trustee makes no representations as to the validity or
sufficiency of this Supplemental Indenture, except the due and valid execution
hereof by the Trustee. The Trustee's execution of this Supplemental Indenture
should not be construed to be an approval or disapproval of the advisability of
the action taken by Columbia and Healthtrust with respect to the Merger.
4
<PAGE>
Section 3.5. This Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
Section 3.6. This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be deemed to constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and duly attested, all as of the day and year first above
written.
COLUMBIA/HCA HEALTHCARE CORPORATION
By: /s/ Stephen T. Braun
--------------------------------
Stephen T. Braun
Senior Vice President
Attest:
/s/ Rachel A. Seifert
- -------------------------------
Rachel A. Seifert
Assistant Secretary
HEALTHTRUST, INC. - THE HOSPITAL
COMPANY
By: /s/ Stephen T. Braun
--------------------------------
Stephen T. Braun
Senior Vice President
Attest:
/s/ Rachel A. Seifert
- -------------------------------
Rachel A. Seifert
Assistant Secretary
THE FIRST NATIONAL BANK OF BOSTON, Trustee
By: /s/ Donna L. Germano
---------------------------------------
Name: Donna L. Germano
Title: Account Manager
Attest:
/s/ J. Mogavero
- -------------------------------
J. Mogavero
Assistant Cashier
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SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (the "Second Supplemental
Indenture"), dated as of May __, 1995, by and among Healthtrust, Inc. - The
Hospital Company, a corporation duly organized and existing under the laws of
the State of Delaware ("Healthtrust"), having its principal offices at 4225
Harding Road, Nashville, Tennessee 37205, Columbia/HCA Healthcare Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
("Columbia"), having its principal offices at One Park Plaza, Nashville,
Tennessee 37203, and The First National Bank of Boston, a national banking
association duly organized and existing under the laws of the United States of
America (the "Trustee"), having its principal corporate trust offices at 150
Royall Street, Canton, Massachusettes 02021. Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Indenture
(as such term is defined below).
WHEREAS, Healthtrust and the Trustee duly executed, and Healthtrust
duly delivered to the Trustee, the Indenture, dated as of May 1, 1992 (as
amended by the First Supplemental Indenture, the "Indenture"), relating to
$500,000,000 original principal amount of Healthtrust's 10 3/4% Subordinated
Notes due May 1, 2002 (the "Securities");
WHEREAS, effective as of April 24, 1995, pursuant to the terms of the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of October 4,
1994, by and among Columbia, COL Acquisition Corporation, a Delaware corporation
and a wholly owned subsidiary of Columbia ("Merger Sub"), and Healthtrust,
Merger Sub was merged with and into Healthtrust, which thereby became a wholly
owned subsidiary of Columbia (the "Merger"), and the shares of Common Stock,
$.001 par value, of Healthtrust were exchanged for shares of Common Stock, $.01
par value, of Columbia, at the Exchange Ratio defined and specified in the
Merger Agreement;
WHEREAS, Healthtrust, Columbia and the Trustee duly executed, and
Healthtrust and Columbia duly delivered to the Trustee, in accordance with the
terms of the Indenture, the First Supplemental Indenture, dated as of April 24,
1995 (the "First Supplemental Indenture"), pursuant to which Columbia became a
co-obligor with respect to the Securities;
WHEREAS, pursuant to Section 902 of the Indenture, the Company and the
Trustee have obtained the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities to the amendments contemplated
herein;
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WHEREAS, the Boards of Directors of Columbia and Healthtrust have
authorized the execution of this Second Supplemental Indenture and its delivery
to the Trustee; and
WHEREAS, all actions necessary to make this Second Supplemental
Indenture the legal, valid and binding obligation of the parties hereto in
accordance with its terms and the terms of the Indenture have been performed;
NOW THEREFORE, in consideration of the promises contained herein and
of other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, it is mutually covenanted and agreed for the equal and
proportionate benefit of all Holders of the Securities as follows.
ARTICLE I
AMENDMENTS
Upon execution of this Second Supplemental Indenture, the terms of the
Securities and the Indenture shall be amended as follows:
Section 1.1. The Indenture shall be amended by replacing all
references to the term "Indebtedness" with the term "Debt"; provided, however,
the term "Indebtedness" shall not be replaced with the term "Debt" in (i) the
definition of "Senior Indebtedness" in Section 101, (ii) Article Five and (iii)
Section 1201.
Section 1.2. Section 101 of the Indenture shall be amended by
deleting, in their entirety, the following definitions: "Change of Control",
"Change of Control Triggering Event", "Consolidated Capital Expenditure
Indebtedness", "Consolidated Interest Expense", "Consolidated Net Income",
"Consolidated Net Worth", "Consolidated Non-cash Charges", "Consolidated Tax
Expense", "Fixed Charge Coverage Ratio", "Investment", "Permitted Indebtedness",
"Permitted Investments", "Permitted Payments", "Physician Support Obligations",
"Rating Agencies", "Rating Category", "Rating Date" and "Rating Decline".
Section 1.3. Section 101 of the Indenture shall be further amended by
adding the following definitions in appropriate alphabetical order:
"Attributable Debt" means as of the date of determination, (i)
as to any capitalized lease obligations, the indebtedness carried on
the balance sheet in accordance with generally accepted accounting
principles and (ii) as to any operating leases, the total net amount
of rent required to be paid under such leases during the remaining
term thereof, discounted at
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the rate of 1% per annum over the weighted average yield to Stated
Maturity of all Debt Securities Outstanding (as such term is defined
in the Columbia Indenture) or, in the event there are no Debt
Securities Outstanding (as such term is defined in the Columbia
Indenture), Outstanding Securities hereunder, compounded semi-
annually. The net amount of rent required to be paid under any such
lease for any such period shall be the aggregate amount of the rent
payable by the lessee with respect to such period after excluding
amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges. The
net amount of rent required to be paid shall also exclude contingent
rent payments that are based on factors, such as revenue growth, that
are not part of required minimum rent payments. In the case of any
lease which is terminable by the lessee upon the payment of a penalty,
such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Attributable Debt" does not include any obligation to make payments
arising from the transfer of tax benefits under the United States
Economic Recovery Tax Act of 1981 to the extent such obligation is
conditioned upon receipt of payments from another Person.
"Code" means the Internal Revenue Code of 1986.
"Columbia" means Columbia/HCA Healthcare Corporation, a
Delaware corporation.
"Columbia Indenture" means the indenture, dated as of
December 15, 1993, from Columbia to The First National Bank of
Chicago, as trustee.
"Consolidated Net Tangible Assets" means the total amount of
assets (less applicable reserves and other properly deductible items)
after deducting therefrom (a) all current liabilities as disclosed on
the consolidated balance sheet of the Company (excluding any thereof
which are by their terms extendible or renewable at the option of the
obligor thereon to a time more than 12 months after the time as of
which the amount thereof is being computed and further excluding any
deferred income taxes that are included in current liabilities) and
(b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangible assets, all as set
forth on the most recent consolidated
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balance sheet of the Company and computed in accordance with generally
accepted accounting principles.
"Consolidated Subsidiaries" means those Subsidiaries that are
consolidated with the Company for financial reporting purposes.
"Debt" means (i) indebtedness of any Person for borrowed
money, (ii) indebtedness of any Person (including capitalized lease
obligations) for the deferred payment of the purchase price of
property or assets purchased, and (iii) guarantees or other contingent
obligations of any Person of or for borrowed money of another Person
or indebtedness of another Person for the deferred payment of the
purchase price of property or assets purchased; provided, however,
that with respect to the Company or a Restricted Subsidiary, as the
case may be, Debt shall not include indebtedness owed by a Restricted
Subsidiary to the Company, by a Restricted Subsidiary to a Subsidiary
or by the Company to a Subsidiary.
"Debt Securities" means any Debt Securities authenticated
and delivered under the Columbia Indenture.
"Funded Debt" means any indebtedness for money borrowed,
created, issued, incurred, assumed or guaranteed that would, in
accordance with generally accepted accounting principles, be
classified as long-term debt, but in any event including all
indebtedness for money borrowed, whether secured or unsecured,
maturing more than one year, or extendible at the option of the
obligor to a date more than one year, after the date of determination
thereof (excluding any amount thereof included in current
liabilities).
"Independent" when used with respect to any specified Person
means such a Person who (i) is in fact independent with respect to the
Company, (ii) does not have any direct financial interest or any
material indirect financial interest in the Company or in any other
obligor upon the Securities or in any Affiliate of the Company or of
such other obligor, and (iii) is not connected with the Company or
such other obligor or any Affiliate of the Company or of such other
obligor, as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Mortgages" means mortgages, liens, pledges or other
encumbrances.
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"Permitted Subsidiary Refinancing Debt" means Debt of any
Subsidiary, the proceeds of which are used to renew, extend, refinance
or refund outstanding Debt of such Subsidiary, provided that such Debt
is scheduled to mature no earlier than the Debt being renewed,
extended, refinanced or refunded; provided, further, that such Debt
shall be Permitted Subsidiary Refinancing Debt only to the extent that
the aggregate principal amount of such Debt (or, if such Debt is
issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom) does not exceed the
aggregate principal amount then outstanding under the Debt being
renewed, extended, refinanced or refunded (or if the Debt being
renewed, extended, refinanced or refunded, was issued at a price less
than the principal amount thereof, then not in excess of the amount of
liability in respect thereof determined in accordance with generally
accepted accounting principles.)
"Principal Property" means each acute care hospital providing
general medical and surgical services (excluding equipment, personal
property and hospitals that primarily provide specialty medical
services, such as psychiatric and obstetrical and gynecological
services) owned solely by the Company and/or one or more of its
Subsidiaries and located in the United States of America.
"Restricted Subsidiary" means (a) any Subsidiary other than an
Unrestricted Subsidiary and (b) any Subsidiary which was an
Unrestricted Subsidiary but which, subsequent to the date hereof, is
designated by the Company (by Board Resolution) to be a Restricted
Subsidiary; provided, however, that the Company may not designate any
such Subsidiary to be a Restricted Subsidiary if the Company would
thereby breach any covenant or agreement contained in the Indenture
(on the assumption that any transaction to which such Subsidiary was a
party at the time of such designation and which would have given rise
to Debt or Preferred Stock or constituted a Sale and Leaseback
Transaction at the time it was entered into had such Subsidiary then
been a Restricted Subsidiary was entered into at the time of such
designation).
"Sale and Lease-back Transaction" shall have the meaning set
forth in Section 1005.
"Second Supplemental Indenture" means the Second Supplemental
Indenture dated as of _______, 1995, from the Company and Columbia to
the Trustee.
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"Unrestricted Subsidiary" means (a) any Subsidiary acquired or
organized after the date of the Columbia Indenture, provided, however,
that such Subsidiary is not a successor, directly or indirectly, to,
and does not directly or indirectly own any equity interest in, any
Restricted Subsidiary; (b) any Subsidiary the principal business of
which consists of obtaining financing in capital markets outside the
United States of America or financing the acquisition or disposition
of machinery, equipment, inventory, accounts receivable and other
real, personal and intangible property by Persons including the
Company or a Subsidiary; (c) any Subsidiary the principal business of
which is owning, leasing, dealing in or developing real property for
residential or office building purposes or land, buildings or related
real property owned by the Company or any Subsidiary as of the date of
the Indenture; (d) any Subsidiary of the Company as of the date of the
Columbia Indenture of which the Company, directly or indirectly, owns
less than 100% of the voting securities entitling the holders thereof
to elect a majority of the directors (or, in the case of a
partnership, of which the Company, directly or indirectly, owns less
than 100% of the general partnership interests therein); or (e) stock
or other securities of an Unrestricted Subsidiary of the character
described in clauses (a) through (d) of this definition, unless and
until, in each of the cases specified in this paragraph, any such
Subsidiary shall have been designated to be a Restricted Subsidiary
pursuant to clause (b) of the definition of "Restricted Subsidiary."
Section 1.3. The definition of "Senior Indebtedness" in Section 101
of the Indenture shall be amended by deleting the words "permitted under Section
1005" in the thirteenth line thereof.
Section 1.4. The definition of "Stated Maturity" in Section 101 of
the Indenture shall be amended by adding (i) the words "or Debt Security, as the
context requires," after the word "Security" in the second line thereof, (ii)
the words "principal, premium or" after the word "any" in the second line
thereof and before the word "interest" in the fifth line thereof and (iii) the
words "or Debt Security" after the word "Security" in the third and fourth lines
thereof.
Section 1.5. The definition of "Subsidiary" in Section 101 of the
Indenture shall be amended by adding at the end thereof the following proviso:
"provided, however, that, for purposes of Sections 1004, 1005, 1006 and 1010 and
the defined terms as used in each such Section, the term Subsidiary shall not
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<PAGE>
include any corporation or partnership controlled by the Company (herein
referred to as an "Affiliated Entity") which:
(a) does not transact any substantial portion of its business or
regularly maintain any substantial portion of its operating assets within
the continental limits of the United States of America;
(b) is principally engaged in the business of financing (including,
without limitation, the purchase, holding, sale or discounting of or
lending upon any notes, contracts, leases or other forms of obligations)
the sale or lease of merchandise, equipment or services (1) by the Company,
or (2) by a Subsidiary (whether such sales or leases have been made before
or after the date when such corporation or partnership became a
Subsidiary), or (3) by another Affiliated Entity, or (4) by any corporation
or partnership prior to the time when substantially all its assets have
heretofore been or shall hereafter have been acquired by the Company;
(c) is principally engaged in the business of owning, leasing, dealing
in or developing real property;
(d) is principally engaged in the holding of stock in and/or the
financing of operations of, an Affiliated Entity; or
(e) is principally engaged in the business of (i) offering health
benefit products or (ii) insuring against professional and general
liability risks of the Company."
Section 1.6. Section 102 of the Indenture shall be amended by
deleting the references to the terms "incurrence", "net book value", "net
proceeds" and "Restricted Payments".
Section 1.7. The Form of Reverse of Security set forth in Section 203
of the Indenture shall be amended by deleting the following: "Upon a Change of
Control Triggering Event and the satisfaction of certain conditions regarding
Senior Indebtedness set forth in the Indenture, the Holder of this Security may
require the Company, subject to certain limitations provided in the Indenture,
to repurchase this Security at a purchase price in cash in an amount equal to
100% of the principal amount thereof plus accrued and unpaid interest."
Section 1.8. Section 303 of the Indenture shall be amended by (i)
replacing the words ",lease or otherwise dispose of" in the thirtieth line
thereof with the words "or lease" and (ii) replacing the words ",lease or other
disposition" in the thirty-fifth and the thirty-ninth lines thereof with the
words "or lease".
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Section 1.9. Section 801 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"Section 801. Company may Consolidate, etc., Only on
Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety (the "successor corporation") shall be a
corporation organized and existing under the laws of the United States
of America or any state or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities and the
performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(b) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time,
or both would become an Event of Default, shall have happened and be
continuing;
(c) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance that would not be permitted by this
Indenture, the Company or such successor corporation or Person, as the
case may be, shall take such steps as shall be necessary effectively
to secure all Securities equally and ratably with (or prior to) all
indebtedness secured thereby; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with."
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Section 1.10. Section 802 of the Indenture shall be amended by (i)
deleting the word "sale," in the first line thereof, (ii) deleting the word
"assignment," in the first and second lines thereof and (iii) replacing the
words "sale assignment, transfer, lease, conveyance or other disposition" in the
sixth and seventh lines thereof with the words "transfer, lease or conveyance".
Section 1.11. Section 901(g) of the Indenture shall be amended by
deleting from the end thereof the words ",including but not limited to Section
1004".
Section 1.12. Section 1004 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"Section 1004. Limitations on Mortgages.
Except as provided in Article Twelve, nothing in this
Indenture or in the Securities shall in any way restrict or prevent
the Company or any Subsidiary from incurring any indebtedness;
provided that the Company covenants and agrees that neither it nor any
Subsidiary will issue, assume or guarantee any indebtedness or
obligation secured by Mortgages upon any Principal Property, without
effectively providing that the Securities then Outstanding and
thereafter created (together with, if the Company so determines, any
other indebtedness or obligation then existing and any other
indebtedness or obligation thereafter created ranking equally with the
Securities) shall be secured equally and ratably with (or prior to)
such indebtedness or obligation as long as such indebtedness or
obligation shall be so secured, except that the foregoing provisions
shall not apply to:
(a) (i) Mortgages to secure all or any part of the purchase
price or the cost of construction of property acquired or constructed
by the Company or a Subsidiary, provided such indebtedness and related
Mortgage are incurred within 18 months after acquisition, or
completion of construction and full operation, whichever is later;
(ii) Mortgages on property owned by the Company or a
Subsidiary to secure indebtedness incurred to construct
additions, substantial repairs or alterations or substantial
improvements to such properties, provided the amount of such
indebtedness does not exceed the expense incurred to construct
such additions, substantial repairs or alterations or substantial
improvements and provided further that such indebtedness and
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related Mortgage are incurred within 18 months after the
completion of such construction, repairs, alterations or
improvements;
(b) Mortgages existing on property at the time of acquisition
of such property by the Company or a Subsidiary or on the property of
a corporation at the time of the acquisition of such corporation by
the Company or a Subsidiary (including acquisitions through merger or
consolidation);
(c) Mortgages to secure indebtedness on which the interest
payments to bondholders are exempt from federal income tax under
Section 103 of the Code;
(d) In the case of a Consolidated Subsidiary, Mortgages in
favor of the Company or another Consolidated Subsidiary;
(e) Mortgages existing on the date of the Second Supplemental
Indenture;
(f) Mortgages in favor of a government or governmental entity
that:
(i) secure indebtedness which is guaranteed by the
government or governmental entity, or
(ii) secure indebtedness incurred to finance all or
some of the purchase price or cost of construction of goods,
products or facilities produced under contract or subcontract for
the government or governmental entity, or
(iii) secure indebtedness incurred to finance all or
some of the purchase price or cost of construction of the
property subject to the Mortgage;
(g) Mortgages incurred in connection with the borrowing of
funds if within 120 days after entering into such Mortgage, such funds
are used to repay indebtedness in the same principal amount secured by
other Mortgages on Principal Property with a fair market value at
least equal to the fair market value of the Principal Property that
secures the new Mortgages, in each case based on an appraisal by an
Independent professional appraiser;
(h) Mortgages arising in connection with the transfer of tax
benefits in accordance with Section
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168(f)(8) of the Code (or any similar provision of law from time to
time in effect); provided, that such Mortgages (i) are incurred within
90 days (or any longer period, not in excess of one year, as any such
provision of law may from time to time permit) after the acquisition
of the property or equipment subject to said Mortgage, (ii) do not
extend to any other property or equipment and (iii) are solely for the
purpose of said transfer of tax benefits or otherwise permitted by
this Section 1004; and
(i) Any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Mortgage referred to in the foregoing clauses (a) to (h) inclusive or
of any indebtedness secured thereby; provided that the principal
amount of indebtedness secured thereby shall not exceed the principal
amount of indebtedness so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or
replacement Mortgage shall be limited to all or part of substantially
the same property that secured the Mortgage extended, renewed or
replaced (plus improvements on such property)."
Section 1.13. Section 1005 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"Section 1005. Limitations on Sale and Lease-Back.
The Company covenants and agrees that neither it nor any
Subsidiary will enter into any arrangement with any Person (other than
the Company or a Subsidiary), or to which any such Person is a party,
providing for the leasing to the Company or a Subsidiary for a period
of more than three years of any Principal Property that has been or is
to be sold or transferred by the Company or such Subsidiary to such
Person or to any other Person (other than the Company or a
Subsidiary), to which the funds have been or are to be advanced by
such Person on the security of the leased property ("Sale and Lease-
Back Transactions") unless either:
(i) the Company or such Subsidiary would be entitled,
pursuant to Section 1004, to incur indebtedness secured by a
Mortgage on the property to be leased, without equally and
ratable securing the Securities, or
(ii) the Company (and in any such case the Company
covenants and agrees that it will do so)
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during or immediately after the expiration of 120 days after the
effective date of such Sale and Lease-Back Transaction (whether
made by the Company or a Subsidiary) applies to the voluntary
retirement of Funded Debt and/or the acquisition or construction
of Principal Property an amount equal to the value of such Sale
and Lease-Back Transaction, less the principal amount of
Securities delivered, within 120 days after the effective date of
such arrangement, to the Trustee for retirement and cancellation
and the principal amount of other Funded Debt voluntarily retired
by the Company within such 120-day period, excluding retirements
of Securities and other Funded Debt as a result of conversions or
pursuant to mandatory sinking fund or prepayment provisions or by
payment at maturity.
For purposes of this Section 1005, the term "value" shall
mean, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (1) the net
proceeds of the sale or transfer of the property leased pursuant to
such Sale and Lease-Back Transaction or (2) the fair value in the
opinion of the Chief Financial Officer of the Company of such property
at the time of entering into such Sale and Lease-Back Transaction, in
either case divided first by the number of full years of the term of
the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal
or extension options contained in the lease."
Section 1.14. Section 1006 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"Section 1006. Limitations on Incurrence of Debt or
Issuance of Preferred Stock by
Restricted Subsidiaries.
The Company shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume or otherwise
become liable with respect to, extend the maturity of or become
responsible for the payment of, as applicable, any Debt or Preferred
Stock other than:
(i) Debt of the Company or a Restricted Subsidiary
outstanding on the date of the Second Supplemental Indenture;
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(ii) Debt of a Restricted Subsidiary that represents
the assumption by such Restricted Subsidiary of Debt of another
Restricted Subsidiary;
(iii) Debt or Preferred Stock of any corporation or
partnership existing at the time such corporation or partnership
becomes a Subsidiary;
(iv) Debt of a Restricted Subsidiary arising from
agreements providing for indemnification, adjustment of purchase
price or similar obligations or from guarantees, letters of
credit, surety bonds or performance bonds securing any
obligations of the Company or any of its Subsidiaries incurred or
assumed in connection with the disposition of any business,
property or Subsidiary, other than guarantees or similar credit
support by any Restricted Subsidiary of indebtedness incurred by
any Person acquiring all or any portion of such business,
property or Subsidiary for the purpose of financing such
acquisition, provided that the maximum aggregate liability in
respect of all such Debt in the nature of such guarantees will at
no time exceed the gross proceeds (including cash and the fair
market value of property other than cash) actually received from
the disposition of such business, property or Subsidiary;
(v) Debt of a Restricted Subsidiary in respect of
performance, surety and other similar bonds, bankers acceptances
and letters of credit provided by such Restricted Subsidiary in
the ordinary course of business;
(vi) Debt of the Company or a Restricted Subsidiary
secured by a Mortgage incurred to finance the purchase price or
cost of construction of property (or additions, substantial
repairs, alterations or substantial improvements thereto),
provided that (A) such Mortgage and the Debt secured thereby are
incurred within 18 months of the later of such acquisition or
completion of construction (or such addition, repair, alteration
or improvement) and full operation thereof and (B) such Mortgage
does not relate to any property other than the property so
purchased or constructed (or added, repaired, altered or
improved);
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(vii) Permitted Subsidiary Refinancing Debt;
(viii) Debt (including without limitation, Debt arising
from a guarantee) of a Restricted Subsidiary to the Company or
another Subsidiary, but only for so long as held or owned by the
Company or another Subsidiary; or
(ix) any obligation pursuant to a Sale and Lease-Back
Transaction permitted under Section 1005."
Section 1.15. Section 1010 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"Section 1010. Exempted Transactions.
Notwithstanding the provisions of Sections 1004, 1005 and
1006, the Company and any Subsidiary may issue, assume or guarantee
indebtedness secured by Mortgages and enter into Sale and Lease-Back
Transactions that would otherwise be subject to the restrictions in
Sections 1004 and 1005, respectively, and any Restricted Subsidiary
may issue, assume or otherwise become liable for any Debt or Preferred
Stock that would otherwise be subject to the restrictions in Section
1006, provided (a) the aggregate outstanding principal amount of all
other indebtedness of the Company and its Subsidiaries that is subject
to the restrictions in Section 1004 (not including indebtedness
permitted to be secured under clauses (a) to (i), inclusive of Section
1004), plus (b) the aggregate Attributable Debt in respect of the Sale
and Lease-Back Transactions in existence at such time (not including
Sale and Lease-Back Transactions permitted by Section 1005(i) or
(ii)), plus (c) the aggregate principal amount of all Debt or
Preferred Stock of any Restricted Subsidiary subject to the
restrictions in Section 1006, (not including Debt or Preferred Stock
permitted under clauses (i) to (ix), inclusive, of Section 1006) does
not exceed 15% of the Consolidated Net Tangible Assets of the Company
and its Consolidated Subsidiaries."
Section 1.16. Section 1201 of the Indenture shall be amended by
deleting "except as set forth in Section 1004," in the ninth line thereof.
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ARTICLE II
MISCELLANEOUS
Section 2.1 The Indenture shall be deemed to be modified as herein
provided, but, except as modified by this Second Supplemental Indenture, the
Indenture shall continue in full force and effect.
Section 2.2 The Indenture and this Second Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 2.3 This Second Supplemental Indenture shall become
effective as of the date first above written.
Section 2.4 The Trustee makes no representations as to the validity
or sufficiency of this Second Supplemental Indenture, except the due and valid
execution hereof by the Trustee. The Trustee's execution of this Second
Supplemental Indenture should not be construed to be an approval or disapproval
of the advisability of the amendments to the Indenture provided herein.
Section 2.5 THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 2.6 This Second Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall be deemed to constitute but one and the same instrument.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and duly attested, all as of the day and year first above
written.
COLUMBIA/HCA HEALTHCARE CORPORATION
By:
----------------------------------
Richard L. Scott
President and Chief Executive Officer
[CORPORATE SEAL]
Attest:
- ------------------------
Stephen T. Braun
Secretary
HEALTHTRUST, INC. - THE HOSPITAL COMPANY
By:
-----------------------------------
R. Clayton McWhorter
President and Chief Executive Officer
[CORPORATE SEAL]
Attest:
- ------------------------
Philip D. Wheeler
Secretary
THE FIRST NATIONAL BANK OF BOSTON, Trustee
By:
-----------------------------------
Name:
Title:
[CORPORATE SEAL]
Attest:
- ------------------------
16
<PAGE>
STATE OF TENNESSEE )
)SS
COUNTY OF DAVIDSON )
On the ___ day of April, 1995, before me personally came Richard L.
Scott and Stephen T. Braun, to me known, who, being by me duly sworn, did depose
and say that they are President and Chief Executive Officer and Secretary,
respectively, of Columbia/HCA Healthcare Corporation, one of the corporations
described in and which executed the foregoing instrument; that they know the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that they signed their respective names thereto by like
authority.
----------------------------------
Notary Public
STATE OF TENNESSEE )
)SS
COUNTY OF DAVIDSON )
On the ___ day of April, 1995, before me personally came R. Clayton
McWhorter and Philip D. Wheeler, to me known, who, being by me duly sworn, did
depose and say that they are President and Chief Executive Officer and
Secretary, respectively, of Healthtrust Inc. - The Hospital Company, one of the
corporations described in and which executed the foregoing instrument; that they
know the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that they signed their respective names
thereto by like authority.
----------------------------------
Notary Public
17
<PAGE>
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (the "Second Supplemental Indenture"),
dated as of May __, 1995, by and among Healthtrust, Inc. - The Hospital Company,
a corporation duly organized and existing under the laws of the State of
Delaware ("Healthtrust"), having its principal offices at 4225 Harding Road,
Nashville, Tennessee 37205, Columbia/HCA Healthcare Corporation, a corporation
duly organized and existing under the laws of the State of Delaware
("Columbia"), having its principal offices at One Park Plaza, Nashville,
Tennessee 37203, and The First National Bank of Boston, a national banking
association duly organized and existing under the laws of the United States of
America (the "Trustee"), having its principal corporate trust offices at 150
Royall Street, Canton, Massachusetts 02021. Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Indenture
(as such term is defined below).
WHEREAS, Healthtrust and the Trustee duly executed, and Healthtrust duly
delivered to the Trustee, the Indenture, dated as of March 30, 1993, (as amended
by the First Supplemental Indenture, the "Indenture"), relating to $200,000,000
original principal amount of Healthtrust's 10 1/4% Subordinated Notes due April
15, 2004 (the "10 1/4% Notes") and $300,000,000 original principal amount of
Healthtrust's 8 3/4% Subordinated Debentures due March 15, 2005 (the "8 3/4%
Debentures") (the 10 1/4% Notes together with the 8 3/4% Debentures, the
"Securities");
WHEREAS, effective as of April 24, 1995, pursuant to the terms of the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of October 4,
1994, by and among Columbia, COL Acquisition Corporation, a Delaware corporation
and a wholly owned subsidiary of Columbia ("Merger Sub"), and Healthtrust,
Merger Sub was merged with and into Healthtrust, which thereby became a wholly
owned subsidiary of Columbia (the "Merger"), and the shares of Common Stock,
$.001 par value, of Healthtrust were exchanged for shares of Common Stock, $.01
par value, of Columbia, at the Exchange Ratio defined and specified in the
Merger Agreement;
WHEREAS, Healthtrust, Columbia and the Trustee duly executed, and
Healthtrust and Columbia duly delivered to the Trustee, in accordance with the
terms of the Indenture, the First Supplemental Indenture, dated as of April 24,
1995 (the "First Supplemental Indenture"), pursuant to which Columbia became a
co-obligor with respect to the Securities;
WHEREAS, pursuant to Section 9.02 of the Indenture, the Company and the
Trustee have obtained the consent of the Holders
<PAGE>
of not less than a majority of the aggregate outstanding principal amount of
each of the 10 1/4% Notes and the 8 3/4% Debentures to the amendments
contemplated herein;
WHEREAS, the Boards of Directors of Columbia and Healthtrust have
authorized the execution of this Second Supplemental Indenture and its delivery
to the Trustee; and
WHEREAS, all actions necessary to make this Second Supplemental Indenture
the legal, valid and binding obligation of the parties hereto in accordance with
its terms and the terms of the Indenture have been performed;
NOW THEREFORE, in consideration of the promises contained herein and of
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, it is mutually covenanted and agreed for the equal and
proportionate benefit of all Holders of the Securities as follows.
ARTICLE I
AMENDMENTS
Upon execution of this Second Supplemental Indenture, the terms of the
Securities and the Indenture as it relates to the Securities shall be amended as
follows:
Section 1.1. The Indenture shall be amended by replacing all references to
the term "Indebtedness" with the term "Debt"; provided, however, the term
"Indebtedness" shall not be replaced with the term "Debt" in (i) the definition
of "Senior Indebtedness" in Section 1.01, (ii) Article Six and (iii) Section
13.01.
Section 1.2. Section 1.01 of the Indenture shall be amended by deleting,
in their entirety, the following definitions: "Change of Control", "Change of
Control Triggering Event", "Consolidated Capital Expenditure Indebtedness",
"Consolidated Interest Expense", "Consolidated Net Income", "Consolidated Net
Worth", "Consolidated Non-cash Charges", "Consolidated Tax Expense", "Fixed
Charge Coverage Ratio", "Healthcare Venture", "Investment", "Permitted
Indebtedness", "Permitted Investments", "Permitted Payments", "Physician Support
Obligations", "Rating Agencies", "Rating Category", "Rating Date" and "Rating
Decline".
Section 1.3. Section 1.01 of the Indenture shall be further amended by
adding the following definitions in appropriate alphabetical order:
"Attributable Debt" means as of the date of determination,
(i) as to any capitalized lease obligations, the indebtedness carried
on the balance
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<PAGE>
sheet in accordance with generally accepted accounting principles and
(ii) as to any operating leases, the total net amount of rent required
to be paid under such leases during the remaining term thereof,
discounted at the rate of 1% per annum over the weighted average yield
to Stated Maturity of all Debt Securities Outstanding (as such term is
defined in the Columbia Indenture), or, in the event there are no Debt
Securities Outstanding (as such term is defined in the Columbia
Indenture), Outstanding Securities hereunder, compounded semi-
annually. The net amount of rent required to be paid under any such
lease for any such period shall be the aggregate amount of the rent
payable by the lessee with respect to such period after excluding
amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges. The
net amount of rent required to be paid shall also exclude contingent
rent payments that are based on factors, such as revenue growth, that
are not part of required minimum rent payments. In the case of any
lease which is terminable by the lessee upon the payment of a penalty,
such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Attributable Debt" does not include any obligation to make payments
arising from the transfer of tax benefits under the United States
Economic Recovery Tax Act of 1981 to the extent such obligation is
conditioned upon receipt of payments from another Person.
"Code" means the Internal Revenue Code of 1986.
"Columbia" means Columbia/HCA Healthcare Corporation, a
Delaware corporation.
"Columbia Indenture" means the indenture, dated as of
December 15, 1993, from Columbia to The First National Bank of
Chicago, as trustee.
"Consolidated Net Tangible Assets" means the total amount of
assets (less applicable reserves and other properly deductible items)
after deducting therefrom (a) all current liabilities as disclosed on
the consolidated balance sheet of the Company (excluding any thereof
which are by their terms extendible or renewable at the option of the
obligor thereon to a time more than 12 months after the time as of
which the amount thereof is being computed and further excluding any
deferred income taxes that are
3
<PAGE>
included in current liabilities) and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other
like intangible assets, all as set forth on the most recent
consolidated balance sheet of the Company and computed in accordance
with generally accepted accounting principles.
"Consolidated Subsidiaries" means those Subsidiaries that
are consolidated with the Company for financial reporting purposes.
"Debt" means (i) indebtedness of any Person for borrowed
money, (ii) indebtedness of any Person (including capitalized lease
obligations) for the deferred payment of the purchase price of
property or assets purchased, and (iii) guarantees or other contingent
obligations of any Person of or for borrowed money of another Person
or indebtedness of another Person for the deferred payment of the
purchase price of property or assets purchased; provided, however,
that with respect to the Company or a Restricted Subsidiary, as the
case may be, Debt shall not include indebtedness owed by a Restricted
Subsidiary to the Company, by a Restricted Subsidiary to a Subsidiary
or by the Company to a Subsidiary.
"Debt Securities" means any Debt Securities authenticated
and delivered under the Columbia Indenture.
"Funded Debt" means any indebtedness for money borrowed,
created, issued, incurred, assumed or guaranteed that would, in
accordance with generally accepted accounting principles, be
classified as long-term debt, but in any event including all
indebtedness for money borrowed, whether secured or unsecured,
maturing more than one year, or extendible at the option of the
obligor to a date more than one year, after the date of determination
thereof (excluding any amount thereof included in current
liabilities).
"Independent" when used with respect to any specified Person
means such a Person who (i) is in fact independent with respect to the
Company, (ii) does not have any direct financial interest or any
material indirect financial interest in the Company or in any other
obligor upon the Securities or in any Affiliate of the Company or of
such other obligor, and (iii) is not connected with the Company or
such other obligor or any Affiliate of the Company or of such other
obligor, as an officer, employee, promoter, underwriter,
4
<PAGE>
trustee, partner, director or person performing similar functions.
"Mortgages" means mortgages, liens, pledges or other
encumbrances.
"Permitted Subsidiary Refinancing Debt" means Debt of any
Subsidiary, the proceeds of which are used to renew, extend, refinance
or refund outstanding Debt of such Subsidiary, provided that such Debt
is scheduled to mature no earlier than the Debt being renewed,
extended, refinanced or refunded; provided, further, that such Debt
shall be Permitted Subsidiary Refinancing Debt only to the extent that
the aggregate principal amount of such Debt (or, if such Debt is
issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom) does not exceed the
aggregate principal amount then outstanding under the Debt being
renewed, extended, refinanced or refunded (or if the Debt being
renewed, extended, refinanced or refunded, was issued at a price less
than the principal amount thereof, then not in excess of the amount of
liability in respect thereof determined in accordance with generally
accepted accounting principles.)
"Principal Property" means each acute care hospital
providing general medical and surgical services (excluding equipment,
personal property and hospitals that primarily provide specialty
medical services, such as psychiatric and obstetrical and
gynecological services) owned solely by the Company and/or one or more
of its Subsidiaries and located in the United States of America.
"Restricted Subsidiary" means (a) any Subsidiary other than
an Unrestricted Subsidiary and (b) any Subsidiary which was an
Unrestricted Subsidiary but which, subsequent to the date hereof, is
designated by the Company (by Board Resolution) to be a Restricted
Subsidiary; provided, however, that the Company may not designate any
such Subsidiary to be a Restricted Subsidiary if the Company would
thereby breach any covenant or agreement contained in the Indenture
(on the assumption that any transaction to which such Subsidiary was a
party at the time of such designation and which would have given rise
to Debt or Preferred Stock or constituted a Sale and Leaseback
Transaction at the time it was entered into had such Subsidiary then
been a Restricted Subsidiary was entered into at the time of such
designation).
5
<PAGE>
"Sale and Lease-back Transaction" shall have the meaning set
forth in Section 5.06.
"Second Supplemental Indenture" means the Second Supplemental
Indenture dated as of _______, 1995, from the Company and Columbia
to the Trustee.
"Unrestricted Subsidiary" means (a) any Subsidiary acquired
or organized after the date of the Columbia Indenture, provided,
however, that such Subsidiary is not a successor, directly or
indirectly, to, and does not directly or indirectly own any equity
interest in, any Restricted Subsidiary; (b) any Subsidiary the
principal business of which consists of obtaining financing in capital
markets outside the United States of America or financing the
acquisition or disposition of machinery, equipment, inventory,
accounts receivable and other real, personal and intangible property
by Persons including the Company or a Subsidiary; (c) any Subsidiary
the principal business of which is owning, leasing, dealing in or
developing real property for residential or office building purposes
or land, buildings or related real property owned by the Company or
any Subsidiary as of the date of the Indenture; (d) any Subsidiary of
the Company as of the date of the Columbia Indenture of which the
Company, directly or indirectly, owns less than 100% of the voting
securities entitling the holders thereof to elect a majority of the
directors (or, in the case of a partnership, of which the Company,
directly or indirectly, owns less than 100% of the general partnership
interests therein); or (e) stock or other securities of an
Unrestricted Subsidiary of the character described in clauses (a)
through (d) of this definition, unless and until, in each of the cases
specified in this paragraph, any such Subsidiary shall have been
designated to be a Restricted Subsidiary pursuant to clause (b) of the
definition of "Restricted Subsidiary."
Section 1.4 The definition of "Senior Indebtedness" in Section 1.01
of the Indenture shall be amended by deleting the words "permitted under Section
5.06" in the thirteenth line thereof.
Section 1.5. The definition of "Stated Maturity" in Section 1.01 of
the Indenture shall be amended by adding (i) the words "or Debt Security, as the
context requires," after the word "Security" in the second line thereof, (ii)
the words "principal, premium or" after the word "any" in the second line
thereof and before the word "interest" in the fourth line thereof and (iii)
6
<PAGE>
the words "or Debt Security" after the word "Security" in the third and fifth
lines thereof.
Section 1.6. The definition of "Subsidiary" in Section 1.01 of the
Indenture shall be amended by adding at the end thereof the following proviso:
"provided, however, that, for purposes of Sections 5.05, 5.06, 5.07 and 5.08 and
the defined term as used in each such Section, the term Subsidiary shall not
include any corporation or partnership controlled by the Company (herein
referred to as an "Affiliated Entity") which:
(a) does not transact any substantial portion of its business or
regularly maintain any substantial portion of its operating assets
within the continental limits of the United States of America;
(b) is principally engaged in the business of financing
(including, without limitation, the purchase, holding, sale or
discounting of or lending upon any notes, contracts, leases or other
forms of obligations) the sale or lease of merchandise, equipment or
services (1) by the Company, or (2) by a Subsidiary (whether such
sales or leases have been made before or after the date when such
corporation or partnership became a Subsidiary), or (3) by another
Affiliated Entity, or (4) by any corporation or partnership prior to
the time when substantially all its assets have heretofore been or
shall hereafter have been acquired by the Company;
(c) is principally engaged in the business of owning, leasing,
dealing in or developing real property;
(d) is principally engaged in the holding of stock in and/or the
financing of operations of, an Affiliated Entity; or
(e) is principally engaged in the business of (i) offering health
benefit products or (ii) insuring against professional and general
liability risks of the Company.
Section 1.7. Section 5.05 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"SECTION 5.05. Limitations on Mortgages.
Except as provided in Article Thirteen, nothing in this
Indenture or in the Securities shall in any way restrict or prevent
the Company or any Subsidiary from incurring any indebtedness;
provided that the Company covenants and agrees that neither it
7
<PAGE>
nor any Subsidiary will issue, assume or guarantee any indebtedness or
obligation secured by Mortgages upon any Principal Property, without
effectively providing that the Securities then Outstanding and
thereafter created (together with, if the Company so determines, any
other indebtedness or obligation then existing and any other
indebtedness or obligation thereafter created ranking equally with the
Securities) shall be secured equally and ratably with (or prior to)
such indebtedness or obligation as long as such indebtedness or
obligation shall be so secured, except that the foregoing provisions
shall not apply to:
(a) (i) Mortgages to secure all or any part of the purchase
price or the cost of construction of property acquired or constructed
by the Company or a Subsidiary, provided such indebtedness and related
Mortgage are incurred within 18 months after acquisition, or
completion of construction and full operation, whichever is later;
(ii) Mortgages on property owned by the Company or a
Subsidiary to secure indebtedness incurred to construct
additions, substantial repairs or alterations or substantial
improvements to such properties, provided the amount of such
indebtedness does not exceed the expense incurred to construct
such additions, substantial repairs or alterations or substantial
improvements and provided further that such indebtedness and
related Mortgage are incurred within 18 months after the
completion of such construction, repairs, alterations or
improvements;
(b) Mortgages existing on property at the time of acquisition of
such property by the Company or a Subsidiary or on the property of a
corporation at the time of the acquisition of such corporation by the
Company or a Subsidiary (including acquisitions through merger or
consolidation);
(c) Mortgages to secure indebtedness on which the interest
payments to bondholders are exempt from federal income tax under
Section 103 of the Code;
(d) In the case of a Consolidated Subsidiary, Mortgages in favor
of the Company or another Consolidated Subsidiary;
(e) Mortgages existing on the date of the Second Supplemental
Indenture;
8
<PAGE>
(f) Mortgages in favor of a government or governmental entity
that:
(i) secure indebtedness which is guaranteed by the
government or governmental entity, or
(ii) secure indebtedness incurred to finance all or some
of the purchase price or cost of construction of goods, products
or facilities produced under contract or subcontract for the
government or governmental entity, or
(iii) secure indebtedness incurred to finance all or
some of the purchase price or cost of construction of the
property subject to the Mortgage;
(g) Mortgages incurred in connection with the borrowing of funds
if within 120 days after entering into such Mortgage, such funds are
used to repay indebtedness in the same principal amount secured by
other Mortgages on Principal Property with a fair market value at
least equal to the fair market value of the Principal Property that
secures the new Mortgages, in each case based on an appraisal by an
Independent professional appraiser;
(h) Mortgages arising in connection with the transfer of tax
benefits in accordance with Section 168(f)(8) of the Code (or any
similar provision of law from time to time in effect); provided, that
such Mortgages (i) are incurred within 90 days (or any longer period,
not in excess of one year, as any such provision of law may from time
to time permit) after the acquisition of the property or equipment
subject to said Mortgage, (ii) do not extend to any other property or
equipment and (iii) are solely for the purpose of said transfer of tax
benefits or otherwise permitted by this Section 5.05; and
(i) Any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Mortgage referred to in the foregoing clauses (a) to (h) inclusive or
of any indebtedness secured thereby; provided that the principal
amount of indebtedness secured thereby shall not exceed the principal
amount of indebtedness so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or
replacement Mortgage shall be limited to all or part of substantially
the same property that secured the
9
<PAGE>
Mortgage extended, renewed or replaced (plus improvements on such
property)."
Section 1.8. Section 5.06 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"SECTION 5.06. Limitations on Sale and Lease-Back.
The Company covenants and agrees that neither it nor any
Subsidiary will enter into any arrangement with any Person (other than
the Company or a Subsidiary), or to which any such Person is a party,
providing for the leasing to the Company or a Subsidiary for a period
of more than three years of any Principal Property that has been or is
to be sold or transferred by the Company or such Subsidiary to such
Person or to any other Person (other than the Company or a
Subsidiary), to which the funds have been or are to be advanced by
such Person on the security of the leased property ("Sale and Lease-
Back Transactions") unless either:
(i) the Company or such Subsidiary would be entitled,
pursuant to Section 5.05, to incur indebtedness secured by a
Mortgage on the property to be leased, without equally and
ratable securing the Securities, or
(ii) the Company (and in any such case the Company covenants
and agrees that it will do so) during or immediately after the
expiration of 120 days after the effective date of such Sale and
Lease-Back Transaction (whether made by the Company or a
Subsidiary) applies to the voluntary retirement of Funded Debt
and/or the acquisition or construction of Principal Property an
amount equal to the value of such Sale and Lease-Back
Transaction, less the principal amount of Securities delivered,
within 120 days after the effective date of such arrangement, to
the Trustee for retirement and cancellation and the principal
amount of other Funded Debt voluntarily retired by the Company
within such 120-day period, excluding retirements of Securities
and other Funded Debt as a result of conversions or pursuant to
mandatory sinking fund or prepayment provisions or by payment at
maturity.
For purposes of this Section 5.06, the term "value" shall
mean, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (1) the net
proceeds of the
10
<PAGE>
sale or transfer of the property leased pursuant to such Sale and
Lease-Back Transaction or (2) the fair value in the opinion of the
Chief Financial Officer of the Company of such property at the time of
entering into such Sale and Lease-Back Transaction, in either case
divided first by the number of full years of the term of the lease and
then multiplied by the number of full years of such term remaining at
the time of determination, without regard to any renewal or extension
options contained in the lease."
Section 1.9. Section 5.07 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"SECTION 5.07. Limitations on Incurrence of Debt or
Issuance of Preferred Stock by
Restricted Subsidiaries.
The Company shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume or otherwise
become liable with respect to, extend the maturity of or become
responsible for the payment of, as applicable, any Debt or Preferred
Stock other than:
(i) Debt of the Company or a Restricted Subsidiary
outstanding on the date of the Second Supplemental Indenture;
(ii) Debt of a Restricted Subsidiary that represents the
assumption by such Restricted Subsidiary of Debt of another
Restricted Subsidiary;
(iii) Debt or Preferred Stock of any corporation or
partnership existing at the time such corporation or partnership
becomes a Subsidiary;
(iv) Debt of a Restricted Subsidiary arising from
agreements providing for indemnification, adjustment of purchase
price or similar obligations or from guarantees, letters of
credit, surety bonds or performance bonds securing any
obligations of the Company or any of its Subsidiaries incurred or
assumed in connection with the disposition of any business,
property or Subsidiary, other than guarantees or similar credit
support by any Restricted Subsidiary of indebtedness incurred by
any Person acquiring all or any portion of such business,
property or Subsidiary for the purpose of financing such
11
<PAGE>
acquisition, provided that the maximum aggregate liability in
respect of all such Debt in the nature of such guarantees will at
no time exceed the gross proceeds (including cash and the fair
market value of property other than cash) actually received from
the disposition of such business, property or Subsidiary;
(v) Debt of a Restricted Subsidiary in respect of
performance, surety and other similar bonds, bankers acceptances
and letters of credit provided by such Restricted Subsidiary in
the ordinary course of business;
(vi) Debt of the Company or a Restricted Subsidiary
secured by a Mortgage incurred to finance the purchase price or
cost of construction of property (or additions, substantial
repairs, alterations or substantial improvements thereto),
provided that (A) such Mortgage and the Debt secured thereby are
incurred within 18 months of the later of such acquisition or
completion of construction (or such addition, repair, alteration
or improvement) and full operation thereof and (B) such Mortgage
does not relate to any property other than the property so
purchased or constructed (or added, repaired, altered or
improved);
(vii) Permitted Subsidiary Refinancing Debt;
(viii) Debt (including without limitation, Debt arising
from a guarantee) of a Restricted Subsidiary to the Company or
another Subsidiary, but only for so long as held or owned by the
Company or another Subsidiary; or
(ix) any obligation pursuant to a Sale and Lease-Back
Transaction permitted under Section 5.06."
Section 1.10. Section 5.08 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"SECTION 5.08. Exempted Transactions.
Notwithstanding the provisions of Sections 5.05, 5.06 and
5.07, the Company and any Subsidiary may issue, assume or guarantee
indebtedness secured by Mortgages and enter into Sale and Lease-Back
Transactions that would otherwise be subject to the restrictions in
Sections 5.05 and 5.06, respectively,
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<PAGE>
and any Restricted Subsidiary may issue, assume or otherwise become
liable for any Debt or Preferred Stock that would otherwise be subject
to the restrictions in Section 5.07, provided (a) the aggregate
outstanding principal amount of all other indebtedness of the Company
and its Subsidiaries that is subject to the restrictions in Section
5.05 (not including indebtedness permitted to be secured under clauses
(a) to (i), inclusive of Section 5.05), plus (b) the aggregate
Attributable Debt in respect of the Sale and Lease-Back Transactions
in existence at such time (not including Sale and Lease-Back
Transactions permitted by Section 5.06(i) or (ii)), plus (c) the
aggregate principal amount of all Debt or Preferred Stock of any
Restricted Subsidiary subject to the restrictions in Section 5.07,
(not including Debt or Preferred Stock permitted under clauses (i) to
(ix), inclusive, of Section 5.07) does not exceed 15% of the
Consolidated Net Tangible Assets of the Company and its Consolidated
Subsidiaries."
Section 1.11. Section 10.01 of the Indenture shall be amended by
replacing it, in its entirety, with the following:
"SECTION 10.01. Company may Consolidate, etc., Only on
Certain Terms.
The Company shall not consolidate with or merge into any
other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety (the "successor corporation") shall be a
corporation organized and existing under the laws of the United States
of America or any state or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities and the
performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time, or both
would become an
13
<PAGE>
Event of Default, shall have happened and be continuing;
(c) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance that would not be permitted by this Indenture, the
Company or such successor corporation or Person, as the case may be,
shall take such steps as shall be necessary effectively to secure all
Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with."
Section 1.12. Section 10.02 of the Indenture shall be amended by (i)
deleting the words "sale, assignment," in the second and seventh lines thereof,
(ii) deleting the words "or other disposition" in the third line thereof and
(iii) deleting the words ", conveyance or other disposition" in the eighth line
thereof and replacing them with the words "or conveyance".
Section 1.13. Section 13.01 of the Indenture shall be amended by
deleting the words "except as set forth in Section 5.05," in the eleventh line
thereof.
ARTICLE II
MISCELLANEOUS
Section 2.1 The Indenture shall be deemed to be modified as herein
provided, but, except as modified by this Second Supplemental Indenture, the
Indenture shall continue in full force and effect.
Section 2.2 The Indenture and this Second Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
Section 2.3 This Second Supplemental Indenture shall become effective
as of the date first above written.
Section 2.4 The Trustee makes no representations as to the validity
or sufficiency of this Second Supplemental Indenture, except the due and valid
execution hereof by the
14
<PAGE>
Trustee. The Trustee's execution of this Second Supplemental Indenture should
not be construed to be an approval or disapproval of the advisability of the
amendments to the Indenture provided herein.
Section 2.5 THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 2.6 This Second Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall be deemed to constitute but one and the same instrument.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and duly attested, all as of the day and year first above
written.
COLUMBIA/HCA HEALTHCARE CORPORATION
By:
-------------------------------------
Richard L. Scott
President and Chief Executive Officer
[CORPORATE SEAL]
Attest:
- ------------------------
Stephen T. Braun
Secretary
HEALTHTRUST, INC. - THE HOSPITAL COMPANY
By:
-------------------------------------
R. Clayton McWhorter
President and Chief Executive Officer
[CORPORATE SEAL]
Attest:
- ------------------------
Philip D. Wheeler
Secretary
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
By:
-------------------------------------
Name:
Title:
[CORPORATE SEAL]
Attest:
- ------------------------
16
<PAGE>
STATE OF TENNESSEE )
)SS
COUNTY OF DAVIDSON )
On the ___ day of April, 1995, before me personally came Richard L.
Scott and Stephen T. Braun, to me known, who, being by me duly sworn, did depose
and say that they are President and Chief Executive Officer and Secretary,
respectively, of Columbia/HCA Healthcare Corporation, one of the corporations
described in and which executed the foregoing instrument; that they know the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that they signed their respective names thereto by like
authority.
-----------------------------------------
Notary Public
STATE OF TENNESSEE )
)SS
COUNTY OF DAVIDSON )
On the ___ day of April, 1995, before me personally came R. Clayton
McWhorter and Philip D. Wheeler, to me known, who, being by me duly sworn, did
depose and say that they are President and Chief Executive Officer and
Secretary, respectively, of Healthtrust Inc. - The Hospital Company, one of the
corporations described in and which executed the foregoing instrument; that they
know the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that they signed their respective names
thereto by like authority.
-----------------------------------------
Notary Public
17
<PAGE>
ACTIONS OF THE BOARD OF DIRECTORS
OF
COLUMBIA/HCA HEALTHCARE CORPORATION
ADOPTED BY UNANIMOUS CONSENT
APRIL 12, 1995
Pursuant to Section 141 of the Delaware General Corporation Law, the Board
of Directors of COLUMBIA/HCA HEALTHCARE CORPORATION, a Delaware corporation
("Company"), adopts the following resolutions in lieu of a Special Meeting and
consents to the corporate actions contemplated thereby:
RESOLVED, that the Board of Directors (the "Board") deems it
advisable and in the best interests of the Company for the Company to
exchange (i) $1,000 principal amount of the Company's Notes due May 15,
2005 (the "New 2005 Notes") plus an amount of cash based on a fixed spread
formula described in the Prospectus, as defined herein, for each $1,000
principal amount of 10 3/4% Subordinated Notes of Healthtrust, Inc -- The
Hospital Company ("Healthtrust") due 2002 (the "Old 10 3/4% Notes")
properly tendered, (ii) $1,000 principal amount of the Company's Notes due
May 15, 2000 (the "New 2000 Notes") plus an amount of cash based on a fixed
spread formula described in the Prospectus, for each $1,000 principal
amount of 10 1/4% Subordinated Notes of Healthtrust due 2004 (the "Old 10
1/4% Notes") properly tendered and (iii) $1,000 principal amount of the
Company's Notes due May 15, 2025 (the " New 2025 Notes") plus an amount of
cash based on a fixed spread formula described in the Prospectus, for each
$1,000 principal amount of 8 3/4% Subordinated Debentures of Healthtrust
due 2005 (the "Old 8 3/4% Debentures") properly tendered (collectively, the
"Exchange Offers"). The Old 10 3/4% Notes, Old 10 1/4% Notes and Old 8 3/4%
Debentures collectively, are referred to herein as the "Old Securities;"
the New 2005 Notes, New 2000 Notes and New 2025 Notes collectively, are
referred to herein as the "New Securities;" and further
RESOLVED, that, subject to the limitations set forth in these
resolutions, the Board hereby authorizes the Exchange Offers on such terms
and conditions as shall be determined by the Chairman of the Board, the
President, the Chief Executive Officer, the Chief Financial Officer, any
Senior Vice President, the Vice President-Finance or the Treasurer (the
"Authorized Officers"); and further
RESOLVED, that the appropriate officer(s) of the Company be, and
each of them hereby is, authorized in the name and on behalf of the
Company, to prepare and execute, or to cause to be prepared, a registration
statement on Form S-4 (the "Registration Statement"), relating to the
registration under the Securities Act of 1933, as amended (the "Act") of
the Exchange Offers, with such changes therein as
<PAGE>
the officers executing the same may approve, such execution to be
conclusive evidence of such approval, and to prepare and execute, or to
cause to be prepared, any and all amendments thereto, including post-
effective amendments, and all related preliminary prospectuses,
prospectuses and amendments or supplements thereto (the "Prospectus"),
together with all documents required as exhibits to such Registration
Statement, or any amendments or supplements thereto, and all certificates,
letters, instruments, applications and other documents which may be
required to be filed with the Securities and Exchange Commission (the
"Commission") with respect to the registration of the Exchange Offers, and
to take any and all actions that any such officer(s) may deem necessary or
desirable; and further
RESOLVED, that upon the execution of the Registration Statement or
any amendment thereto, including post-effective amendments, by directors
and officers of the Company, as required by law, either in person or by a
duly authorized attorney or attorneys, the proper officer(s) of the Company
be, and each of them hereby is, authorized to cause the Registration
Statement and any amendments thereto, including post-effective amendments,
to be filed with the Commission and to execute and file all such
instruments, make all such payments, and do such other acts and things as,
in such officer(s) opinion, may be desirable or necessary in order to
effect such filing, to cause the Registration Statement to become effective
and to maintain the Registration Statement in effect for as long as such
officer(s) deem it in the best interest of the Company; and further
RESOLVED, that the appointment of Stephen T. Braun, as the
Company's agent for service in connection with said Registration Statement
and amendments thereto, is hereby approved, with such agent to have all
powers enumerated in Rule 478 of the rules and regulations promulgated
under the Act by the Commission; and further
RESOLVED, that pursuant to the Exchange Offers, the New Securities
be issued under the Indenture, dated as of December 15, 1993, between the
Company and the First National Bank of Chicago, as Trustee (the
"Indenture"); that the proper officers of the Company be, and each of them
hereby is, authorized to execute and deliver, in similar manner, Indentures
supplemental thereto approved by any Authorized Officer (the Indenture, as
amended by any Indenture supplemental thereto as executed and delivered on
behalf of the Company, being hereinafter referred to as an "Indenture");
and that the proper officers of the Company be, and each of them hereby is,
authorized in the name of the Company to execute and deliver such other
agreements, documents, certificates and instruments as such officer or
officers may deem necessary or desirable in connection with the Indenture;
and further
RESOLVED, that, subject to the limitations set forth in these
resolutions, any Authorized Officer may approve the form of the New
Securities, provided that the form so approved shall be of the character
described in the Indenture, that any Authorized Officer is authorized to
execute, in the name and on behalf of the Company and under its corporate
seal attested by its Secretary or one of its Assistant Secretaries, the New
Securities of each issue in the principal amount thereof and with
<PAGE>
such terms as shall have been determined by an Authorized Officer; that the
signature of each of such officer on the New Securities may be manual or
facsimile; that if any officers of the Company who sign or whose facsimile
signatures shall appear on any New Securities cease to be such officers
prior to their authentication or delivery, the New Securities so signed
bearing such facsimile signatures shall nevertheless be valid; that the
proper officers of the Company be, and each of them hereby is, authorized
and directed to deliver or cause to be delivered such New Securities to the
trustee under the Indenture for authentication and delivery pursuant to the
provisions of Indenture in the principal amount thereof as shall have been
determined by any Authorized Officer and in accordance with the provisions
of the Indenture; and that upon the authentication of the New Securities of
each issue by the trustee under the Indenture, such trustee, is authorized
to deliver such New Securities as instructed by the proper officers of the
Company; and further
RESOLVED, that any Authorized Officer is, authorized to execute
and deliver, in the name and on behalf of the Company, a Dealer-Manager
Agreement, or a similar agreement, in such form as is approved by any
Authorized Officer, with its Dealer-Manager, in connection with the
Exchange Offer and each issuance of the New Securities, with such changes
therein as the officer executing the same may approve, such execution to be
conclusive evidence of such approval (each such Agreement, or similar
agreement as executed and delivered on behalf of the Company, together with
such Dealer-Manager agreement being hereinafter referred to as a "Dealer-
Manager Agreement"); and further
RESOLVED, that it is desirable and in the best interest of the
Company that its New Securities be qualified or registered for sale in
various states; that an Authorized Officer or any Vice President and the
Secretary or an Assistant Secretary hereby are authorized to determine the
states in which appropriate action shall be taken to qualify or register
for sale all or such part of the securities of the Company as said officers
may deem advisable; that said officers are hereby authorized to perform on
behalf of the Company any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such states,
and in connection therewith to execute and file all requisite papers and
documents, including, but not limited to, applications, reports, surety
bonds, irrevocable consents and appointments of attorneys for service of
process; and the execution by such officers of any such paper or document
or the doing by them of any act in connection with the foregoing matters
shall conclusively establish their authority therefor from the Company and
the approval and ratification by the Company of the papers and documents so
executed and the action so taken; and further
RESOLVED, that the proper officers of the Company be, and each of
them hereby is, authorized, in the name and on behalf of the Company, to
make applications to such securities exchanges as such officer acting shall
deem necessary or appropriate for the listing thereon of any issue of New
Securities or the delisting of any issue of the Old Securities and that
each such officer, or such other person as such officer may designate in
writing is authorized to appear before any officials or before any body of
any such exchange and to execute and deliver any and all papers
<PAGE>
and agreements, specifically including, without limitation, indemnity
agreements for the benefit of any such exchange relating to the use of
facsimile signatures, and to do any and all things which may be necessary
to effect such listing or delisting; and further
RESOLVED, that the officers of the Company be, and each of them
hereby is, authorized to enter into such arrangements with the Depository
Trust Company as such officer shall deem appropriate for the purpose of
facilitating the use of a "book entry" registration and transfer system for
the New Securities; and
FURTHER RESOLVED, that the proper officers of the Company, and
each of them hereby is, authorized and directed to do and perform, or cause
to be done and performed, all such acts, deeds and things, and to make,
execute and deliver, or cause to be made, executed and delivered all such
agreements, undertakings, documents, instruments or certificates in the
name and on behalf of the Company or otherwise as each such officer may
deem necessary or appropriate to effectuate or carry out fully the purpose
and intent of the foregoing resolutions, including the performance of the
obligations of the Company under the Dealer-Manager Agreement, the
Indenture, the New Securities, any Registration Statement or any other
agreement referred to herein or necessitated hereby.
Witness the signatures of the undersigned, who are all of the members of
the Board of Directors of the Company as of the date first written above.
/S/ THOMAS F. FRIST, JR., M.D. /S/ DARLA D. MOORE
/S/ RICHARD L. SCOTT /S/ RODMAN W. MOORHEAD III
/S/ MAGDALENA AVERHOFF, M.D. /S/ CARL F. POLLARD
/S/ J. DAVID GRISSOM /S/ CARL E. REICHARDT
<PAGE>
/S/ CHARLES J. KANE /S/ FRANK S. ROYAL, M.D.
/S/ JOHN W. LANDRUM /S/ ROBERT D. WALTER
/S/ T. MICHAEL LONG /S/ WILLIAM T. YOUNG
<PAGE>
APRIL 28, 1995
Columbia/HCA Healthcare Corporation
One Park Plaza
Nashville, Tennessee 37203
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of Columbia/HCA Healthcare
Corporation, a Delaware corporation (the "Company"), and have acted as counsel
to the Company in connection with the preparation and filing with the
Securities and Exchange Commission (the "Commission"), under the Securities Act
of 1933, as amended (the "Act"), of a Registration Statement on Form S-4 (the
"Registration Statement") relating to the exchange offer with respect to (i)
$1,000 principal amount of the Company's Notes due June 1, 2005 (the "New 2005
Notes") plus an amount of cash based on a fixed spread formula described in the
prospectus included in the Registration Statement (the "Prospectus"), for each
$1,000 principal amount of 10 3/4% Subordinated Notes of Healthtrust, Inc -- The
Hospital Company ("Healthtrust") due 2002 properly tendered, (ii) $1,000
principal amount of the Company's Notes due June 1, 2000 (the "New 2000 Notes")
plus an amount of cash based on a fixed spread formula described in the
Prospectus, for each $1,000 principal amount of 10 1/4% Subordinated Notes of
Healthtrust due 2004 properly tendered and (iii) $1,000 principal amount of the
Company's Notes due June 1, 2025 (the "New 2025 Notes") plus an amount of cash
based on a fixed spread formula described in the Prospectus, for each $1,000
principal amount of 8 3/4% Subordinated Debentures of Healthtrust due 2005
properly tendered (collectively, the "Exchange Offers"). The New 2005 Notes, New
2000 Notes and New 2025 Notes are referred to collectively herein as the "New
Securities." The New Securities will be issued under an Indenture (the
"Indenture") dated as of December 15, 1993 entered into between the Company and
The First National Bank of Chicago, as trustee (the "Trustee").
I have examined and relied on originals or copies, certified or otherwise
identified to my satisfaction, of all such corporate records of the Company and
such other instruments and certificates of public officials, officers and
representatives of the Company and such other persons, and I have made such
investigations of law, as I have deemed appropriate as a basis for the opinions
set forth below. I am familiar with the proceedings taken and proposed to be
taken by the Company in connection with the Exchange Offers and authorization,
issuance and sale of the New Securities.
<PAGE>
Columbia/HCA Healthcare Corporation
April 28, 1995
Page 2
Based upon the foregoing and subject to the proposed additional proceedings
contemplated prior to the issuance of the New Securities and the due execution,
authentication and delivery of the New Securities by the Company, I am of the
opinion that:
1. The Company is a corporation validly existing in good standing under the
laws of the State of Delaware.
2. The Issuance of the New Securities in the manner and on the terms set
forth in the Registration Statement will be duly authorized by all
necessary corporate action of the Company.
3. The Indenture constitutes a legal, valid, binding and enforceable
obligation of the Company, subject to applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
4. The New Securities, when delivered as contemplated in the Registration
Statement, will constitute legal, valid, binding and enforceable obligations
of the Company, entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
5. The statements contained in the Prospectus filed with the Registration
Statement under the caption "Certain Federal Income Tax Considerations",
insofar as such statements purport to summarize certain federal income tax
laws of the United States, constitute a fair summary of the principal U.S.
federal income tax consequences of the Exchange Offers.
This opinion is limited in all respects to the federal laws of the United
States of America and the Delaware General Corporation Law. You should be aware
that the undersigned is licensed to practice law in the States of Minnesota and
Texas but is not admitted to practice law in the State of Delaware. Accordingly,
any opinion herein as to the laws of the State of Delaware is based solely upon
review of the latest unofficial compilation of the Delaware General Corporation
Law.
I hereby consent to the use of my name under the caption "Legal Matters" in
the Registration Statement and any prospectus which constitutes a part thereof
and to the filing of this opinion as an exhibit to the Registration Statement.
In giving this consent, I do not hereby admit that I come within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Stephen T. Braun
Stephen T. Braun
Senior Vice President
and General Counsel
<PAGE>
Exhibit 12.3
HEALTHRUST, INC. THE HOSPITAL COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
FEBRUARY 28, FOR THE YEARS ENDED AUGUST 31,
--------------- --------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net income (loss)............ $111 $ 86 $173 $135 $ 93 $ 7 $(53)
Income tax charge (credit)... 80 59 116 91 72 15 (22)
---- ---- ---- ---- ---- ---- ----
Pretax income (loss)......... $191 $145 $289 $226 $165 $ 22 $(75)
---- ---- ---- ---- ---- ---- ----
Fixed Charges:
Interest (expensed or
capitalized)................. $ 82 $ 46 $116 $106 $118 $151 $155
Amortization of debt expenses,
discount or premium.......... 2 1 3 2 7 4 8
Estimated interest factor on
operating lease payments..... 13 8 19 14 12 10 8
---- ---- ---- ---- ---- ---- ----
Total fixed charges........ $ 97 $ 55 $138 $122 $137 $165 $171
---- ---- ---- ---- ---- ---- ----
Earnings:
Pre-tax income (loss)......... $191 $145 $289 $226 $165 $ 22 $(75)
Fixed charges................. 97 55 138 122 137 165 171
Interest capitalized.......... (3) (5) (5) (8) (5) (2) (2)
Amortization of interest
capitalized.................. 1 1 2 2 2 1 1
---- ---- ---- ---- ---- ---- ----
Total earnings............. $286 $196 $424 $342 $299 $186 $ 95
---- ---- ---- ---- ---- ---- ----
Ratio of earnings to fixed
charges...................... 2.96x 3.56x 3.08x 2.79x 2.18x 1.13x (A)
==== ==== ==== ==== ==== ==== ====
- -------------------
(A) Healthtrust's earnings were inadequate to cover fixed charges for the year ended August 31, 1990 by $76 million.
</TABLE>
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and prospectus of Columbia/HCA Healthcare
Corporation for the registration of $1,000,000,000 of notes in an offer to
exchange for any and all of certain subordinated notes of Healthtrust, Inc. -The
Hospital Company and to the incorporation by reference therein of our reports
dated February 28, 1995, with respect to the consolidated financial statements
and schedule of Columbia/HCA Healthcare Corporation included in its Annual
Report (Form 10-K) for the year ended December 31, 1994, and April 24, 1995 with
respect to the supplemental consolidated financial statements and schedule of
Columbia/HCA Healthcare Corporation included in its Current Report on Form 8-K
dated April 24, 1995 both as filed with the Securities and Exchange Commission.
Ernst & Young LLP
Louisville, Kentucky
April 24, 1995
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related prospectus of Columbia/HCA
Healthcare Corporation for the registration of $1,000,000,000 of notes in an
offer to exchange for any and all of certain subordinated notes of Healthtrust,
Inc. - The Hospital Company and to the incorporation by reference therein of our
report dated October 14, 1994, with respect to the consolidated financial
statements and schedules of Healthtrust, Inc. - The Hospital Company included in
its Annual Report (Form 10-K) for the year ended August 31, 1994, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Nashville, Tennessee
April 24, 1995
<PAGE>
[GREEN]
LETTER OF TRANSMITTAL AND CONSENT
To Tender and to Give Consent in Respect of
10 3/4% Subordinated Notes Due May 1, 2002
CUSIP No. 42221H-AF-4
of
HEALTHTRUST, INC. - THE HOSPITAL COMPANY
In Exchange for Notes Due June 1, 2005
of
COLUMBIA/HCA HEALTHCARE CORPORATION
Pursuant to the Prospectus and Consent Solicitation
dated ________, 1995
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE ON ________, ________, 1995, UNLESS EXTENDED (THE
"EXPIRATION DATE") AT 11:59 P.M., NEW YORK CITY TIME.
OLD 10 3/4% NOTES TENDERED FOR EXCHANGE MAY BE WITHDRAWN AT ANY TIME PRIOR TO
11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
NO GUARANTEED DELIVERY PROCEDURES ARE AVAILABLE WITH RESPECT TO THE EXCHANGE
OFFER.
- --------------------------------------------------------------------------------
TO: CHEMICAL BANK, EXCHANGE AGENT
<TABLE>
<CAPTION>
By Mail: Overnight or Hand Delivery: Facsimile Transmission:
<S> <C> <C>
Chemical Bank Chemical Bank (212) 629-8015
Reorganization Department 55 Water Street (212) 629-8016
P.O. Box 3085 Second Floor - Room 234
GPO Station New York, New York 10041 Confirm by Telephone:
New York, New York 10116-3086 Attention: Reorganization Department (212) 946-7137
</TABLE>
QUESTIONS REGARDING THE EXCHANGE OFFER OR COMPLETION OF THIS LETTER OF
TRANSMITTAL MAY BE DIRECTED TO D.F. KING & CO., INC., THE INFORMATION AGENT FOR
THE EXCHANGE OFFER, AT (800) 829-6554 (TOLL FREE).
DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT (THIS "LETTER OF
TRANSMITTAL") TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE
NUMBER, OTHER THAN AS SET FORTH ABOVE OR OTHER THAN IN ACCORDANCE WITH THE
INSTRUCTIONS HEREIN, WILL NOT CONSTITUTE VALID DELIVERY. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
This Letter of Transmittal is to be used in connection with (i) the
physical delivery of Old 10 3/4% Notes (as defined herein) to Chemical Bank, as
exchange agent (the "Exchange Agent") or (ii) the delivery of Old 10 3/4% Notes
by book-entry transfer to the account of the Exchange Agent at The Depository
Trust Company ("DTC"), the Midwest Securities Trust Company ("MSTC") or the
Philadelphia Depository Trust Company ("Philadep", and together with DTC and
MSTC, the "Book-Entry Transfer Facilities"), in accordance with the procedures
described in the Prospectus and Consent Solicitation dated __________, 1995
(together, the "Prospectus") under the heading "The Exchange Offers --
Procedures for Tendering Old Securities and Giving Consents."
Pursuant to the Prospectus, receipt of which is hereby acknowledged,
Columbia/HCA Healthcare Corporation (the "Company") is offering to exchange New
2005 Notes (as defined herein) plus an amount of cash consideration for Old 10
3/4% Notes properly tendered. Subject to the terms and conditions of the
Exchange Offer, the Company will accept for exchange all Old 10 3/4% Notes that
are properly tendered (and not withdrawn) prior to 11:59 p.m., New York City
time, on the Expiration Date.
Holders who tender Old 10 3/4% Notes are required to consent to the
proposed amendments (as defined below). THE COMPLETION, EXECUTION AND DELIVERY
OF THIS LETTER OF TRANSMITTAL WILL CONSTITUTE A CONSENT (AS DEFINED BELOW) TO
THE PROPOSED AMENDMENTS.
NO GUARANTEED DELIVERY PROCEDURES ARE AVAILABLE WITH RESPECT TO THE
EXCHANGE OFFERS. Therefore, the Exchange Agent must receive this Letter of
Transmittal and the Old 10 3/4% Notes tendered herewith by 11:59 P.M., New York
City time, on the Expiration Date in order for such Old 10 3/4% Notes to be
validly tendered.
Holders who wish to tender their Old 10 3/4% Notes (and thereby consent to
the Proposed Amendments) must, at a minimum, fill in the necessary account
information in the table below entitled "Account Information" (the "Account
Information Table"), complete columns (1) through (3) in the table below
entitled "Description of Old 10 3/4% Notes Tendered and In Respect of Which
Consent Is Given" (the "Description Table") and complete and sign in the box
below entitled "SIGN HERE." If only columns (1) through (3) are completed in
the Description Table, the holder will be deemed to have consented to the
Proposed Amendments in respect of, and to have tendered, all Old 10 3/4% Notes
listed in the Description Table. If a holder wishes to tender less than all of
such Old 10 3/4% Notes delivered to the Exchange Agent, column (4) of the
Description Table must be completed in full. See Instruction 4.
2
<PAGE>
IN ORDER TO EFFECT A VALID TENDER OF OLD 10 3/4% NOTES THE UNDERSIGNED MUST
COMPLETE THE ACCOUNT INFORMATION TABLE BELOW. NEW 2005 NOTES WILL BE DELIVERED
ONLY IN BOOK-ENTRY FORM THROUGH DTC AND ONLY TO THE DTC ACCOUNT OF THE
UNDERSIGNED OR THE UNDERSIGNED'S CUSTODIAN. ACCORDINGLY, IF THE UNDERSIGNED
TENDERS (I) BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC, THE
FIRST BOX IN THE ACCOUNT INFORMATION TABLE MUST BE CHECKED AND ANY NEW 2005
NOTES WILL BE DELIVERED TO THE DTC PARTICIPANT FROM WHICH TENDER WAS EFFECTED,
(II) BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT MSTC OR PHILADEP,
THE SECOND BOX IN THE ACCOUNT INFORMATION TABLE MUST BE CHECKED AND THE
UNDERSIGNED MUST PROVIDE INFORMATION REGARDING THE DTC PARTICIPANT TO WHICH ANY
NEW 2005 NOTES SHOULD BE DELIVERED, OR (III) BY PHYSICAL DELIVERY OF
CERTIFICATES TO THE EXCHANGE AGENT, THE THIRD BOX IN THE ACCOUNT INFORMATION
TABLE MUST BE CHECKED AND THE UNDERSIGNED MUST PROVIDE INFORMATION REGARDING THE
DTC PARTICIPANT TO WHICH ANY NEW 2005 NOTES SHOULD BE DELIVERED. FAILURE TO
PROVIDE THE INFORMATION NECESSARY TO EFFECT DELIVERY OF NEW 2005 NOTES WILL
RENDER SUCH HOLDER'S TENDER DEFECTIVE AND THE COMPANY WILL HAVE THE RIGHT, WHICH
IT MAY WAIVE, TO REJECT SUCH TENDER.
ATTENTION ANY TENDERING HOLDER WHOSE OLD 10 3/4% NOTES WILL NOT BE
---
DELIVERED TO THE EXCHANGE AGENT THROUGH DTC: Because New 2005 Notes will be
delivered only in book-entry form through DTC, you are urged to contact promptly
--------
a bank, broker or other intermediary (that has the facility to hold securities
custodially through DTC) to arrange for receipt of any New 2005 Notes delivered
pursuant to the Exchange Offer and to obtain the information necessary to
complete the Account Information Table.
- --------------------------------------------------------------------------------
TO VALIDLY COMPLETE THE LETTER OF TRANSMITTAL (AND THEREBY CONSENT TO THE
PROPOSED AMENDMENTS), COMPLETE PAGES 4 AND 5, COMPLETE AND SIGN PAGE 9, AND (IF
NECESSARY) COMPLETE AND SIGN PAGES 8, 10 AND 14.
THE INSTRUCTIONS STARTING ON PAGE 11 FORM A PART OF THE TERMS AND CONDITIONS OF
THE EXCHANGE OFFER AND SHOULD BE READ CAREFULLY.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
ACCOUNT INFORMATION
Complete One Method of Tender Only*
- --------------------------------------------------------------------------------
VIA DTC
- -------
[_] CHECK HERE IF TENDERED OLD 10 3/4% NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:
Name of DTC Participant___________________________________________________
DTC Participant Number____________________________________________________
________________________________________________________________________________
VIA MSTC OR PHILADEP
- --------------------
[_] CHECK HERE IF TENDERED OLD 10 3/4% NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY
OTHER THAN DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution______________________________________________
Name of Book-Entry Transfer Facility [_] MSTC [_] PHILADEP (check one)
DTC Participant Receiving New 2005 Notes:**
DTC Participant Name______________________________________________________
DTC Participant Number____________________________________________________
Customer Account Number___________________________________________________
Participant Contact Name/Phone Number_____________________________________
________________________________________________________________________________
VIA PHYSICAL DELIVERY
- ---------------------
[_] CHECK HERE IF TENDERED OLD 10 3/4% NOTES ARE BEING DELIVERED IN PHYSICAL
FORM AND COMPLETE THE FOLLOWING:
DTC Participant Receiving New 2005 Notes:**
DTC Participant Name______________________________________________________
DTC Participant Number____________________________________________________
Customer Account Number___________________________________________________
Participant Contact Name/Phone Number_____________________________________
________________________________________________________________________________
* Failure to complete one, and only one, method of tender will render the
undersigned's tender defective.
** Failure to provide the information necessary to effect delivery of New 2005
Notes will render the undersigned's tender defective.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF OLD 10 3/4% NOTES TENDERED AND IN RESPECT OF WHICH CONSENT IS
GIVEN
(SEE INSTRUCTIONS 3 AND 4)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OLD 10 3/4% NOTES TENDERED AND
NAME(S) AND ADDRESS(ES) IN RESPECT
OF HOLDER(S) OF WHICH CONSENT IS GIVEN
(PLEASE FILL IN EXACTLY (ATTACH ADDITIONAL SIGNED
AS SUCH NAME SCHEDULE IF NECESSARY)
APPEARS ON THE FACE OF THE
OLD SECURITIES
TENDERED OR ON A SECURIT
POSITION
LISTING WITH RESPECT
THERETO)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE TOTAL PRINCIPAL PRINCIPAL AMOUNT TENDERED**
NUMBER(S)* AMOUNT OF OLD 10 3/4% AND IN RESPECT OF WHICH
NOTES** CONSENT IS GIVEN
(IF LESS THAN ALL)
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
Total
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by holders tendering by book-entry transfer.
** You must consent to the Proposed Amendments in respect of all Old 10
3/4% Notes tendered by you; completion of column (3) will constitute a
Consent to the Proposed Amendments in respect of such Old 10 3/4% Notes,
unless less than all Old 10 3/4% Notes are to be tendered as specified
in column (4), in which case Consents only with respect to such lesser
amount of Old 10 3/4% Notes shall be given.
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby (i) consents (the "Consent") to the proposed
amendments described in the Prospectus (the "Proposed Amendments"), to the
Indenture, dated as of May 1, 1992 (the "Indenture"), between Healthtrust, Inc.-
The Hospital Company ("Healthtrust") and The First National Bank of Boston, as
trustee (the "Old Trustee"), pursuant to which the 10 3/4% Subordinated Notes of
Healthtrust due May 1, 2002 (the "Old 10 3/4% Notes") indicated above were
issued, and (ii) tenders to the Company the Old 10 3/4% Notes indicated above in
exchange for a like principal amount of the Company's Notes due June 1, 2005
(the "New 2005 Notes") and an amount of cash consideration, upon the terms and
subject to the conditions set forth in the Prospectus (receipt of which is
hereby acknowledged) and in this Letter of Transmittal, both of which together
constitute the Company's offer (the "Exchange Offer") to exchange New 2005 Notes
and an amount of cash consideration for Old 10 3/4% Notes properly tendered.
The amount of cash consideration to be paid by the Company with respect to
Old 10 3/4% Notes properly tendered and accepted by the Company will be
calculated as follows (and the results of such calculation will be publicly
announced no later than 9:00 a.m., New York City time, on the business day prior
to the Expiration Date). A price that includes accrued but unpaid interest to
the Exchange Date (as defined below) will be calculated with respect to the Old
10 3/4% Notes (the "Reference Total Price"), as described in the Prospectus.
Such Reference Total Price will be based on a yield to the first optional
redemption date with respect to such notes (May 1, 1997) equal to the sum of (i)
the yield on the 61/8% U.S. Treasury Note due April 30, 1997, as of 4:00 p.m.,
New York City time, on the second business day prior to the Expiration Date,
plus (ii) ___%. In exchange for each $1,000 principal amount of Old 10 3/4%
Notes properly tendered and accepted by the Company,
5
<PAGE>
the undersigned will receive, in addition to $1,000 principal amount of New 2005
Notes, an amount of cash consideration equal to the amount by which the
Reference Total Price for the Old 10 3/4% Notes exceeds $1,000. The New 2005
Notes will be delivered by book-entry transfer to the DTC account of the
undersigned or the undersigned's custodian as specified in the Account
Information Table above, and the appropriate cash payment will be made by check
to the undersigned (unless specified otherwise in "Special Issuance and Delivery
Instructions" below) in New York (next day) funds, on the fifth business day
following the Expiration Date (the "Exchange Date"). THE UNDERSIGNED
ACKNOWLEDGES THAT TENDERING OLD 10 3/4% NOTES IN ACCORDANCE WITH THE EXCHANGE
OFFER CONSTITUTES A CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT TO ALL OLD
10 3/4% NOTES SO TENDERED.
Subject to, and effective upon, acceptance for exchange of the Old 10 3/4%
Notes tendered hereby in accordance with the terms of the Exchange Offer, the
undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to, and any and all claims in
respect of or arising or having arisen as a result of the undersigned's status
as a holder of, all Old 10 3/4% Notes tendered hereby. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as the true and lawful
agent and attorney-in-fact of the undersigned, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for such Old 10 3/4% Notes or transfer
ownership of such Old 10 3/4% Notes on the account books maintained by a Book-
Entry Transfer Facility, in either such case, together with all accompanying
evidences of transfer and authenticity, to or upon the order of the Company, (b)
present such Old 10 3/4% Notes for transfer on the books of the Company, (c)
deliver the Consent contained herein to the Old Trustee, and (d) receive all
benefits and otherwise exercise all rights of beneficial ownership of such Old
10 3/4% Notes, all in accordance with the terms of the Exchange Offer.
The undersigned hereby represents and warrants that: (a) the undersigned
(i) has full power and authority to tender the Old 10 3/4% Notes tendered hereby
and to sell, assign and transfer all right, title and interest in and to such
Old 10 3/4% Notes and (ii) either has full power and authority to consent to the
Proposed Amendments or is delivering a duly executed Consent (which is included
in this Letter of Transmittal) from a person or entity having such power and
authority; and (b) the Company will acquire good, indefeasible and unencumbered
title to such Old 10 3/4% Notes, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
acquired by the Company. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable to complete the sale, assignment and transfer to the
Company of the Old 10 3/4% Notes tendered hereby or to perfect the undersigned's
Consent to the Proposed Amendments.
The undersigned understands that, subject to the terms and conditions of
the Exchange Offer, Old 10 3/4% Notes properly tendered and not withdrawn will
be exchanged for New 2005 Notes and an amount of cash consideration as described
above. If any amount of tendered Old 10 3/4% Notes is not exchanged for any
reason, or if certificates are submitted that evidence a greater principal
amount of Old 10 3/4% Notes than the principal amount to be tendered, such
unexchanged Old 10 3/4% Notes or Old 10 3/4% Notes for untendered amounts, as
the case may be, will be returned, without expense, to the undersigned, either
to the Book-Entry Transfer Facility account from which tender was effected or to
the address below if Old 10 3/4% Notes were tendered in physical form.
The undersigned understands that the Proposed Amendments will be adopted
with respect to the Old 10 3/4 Notes tendered herewith only upon consummation of
the Exchange Offer with respect to such Old 10 3/4% Notes.
The undersigned understands that tenders of Old 10 3/4% Notes pursuant to
the procedures described in the Prospectus under the heading "The Exchange
Offers --Procedures for Tendering Old Securities and Giving Consents" and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions described in the
Prospectus.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
6
<PAGE>
TENDERS OF OLD 10 3/4% NOTES MADE PURSUANT TO THE EXCHANGE OFFER MAY NOT BE
WITHDRAWN AFTER 11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. PRIOR TO
SUCH TIME, THE WITHDRAWAL OF OLD 10 3/4% NOTES IN ACCORDANCE WITH THE PROCEDURES
SET FORTH IN THE PROSPECTUS WILL EFFECT A REVOCATION OF THE CONSENT WITH RESPECT
TO SUCH OLD 10 3/4 NOTES. ANY VALID REVOCATION OF A CONSENT WILL RENDER THE
CORRESPONDING TENDER OF OLD 10 3/4% NOTES DEFECTIVE, AND THE COMPANY WILL HAVE
THE RIGHT, WHICH IT MAY WAIVE, TO REJECT SUCH TENDER. A PURPORTED NOTICE OF
WITHDRAWAL OR REVOCATION WILL BE EFFECTIVE ONLY IF DELIVERED TO THE EXCHANGE
AGENT IN ACCORDANCE WITH THE SPECIFIC PROCEDURES SET FORTH IN THE PROSPECTUS
UNDER THE HEADING "THE EXCHANGE OFFERS -- WITHDRAWAL AND REVOCATION RIGHTS."
Please credit all New 2005 Notes issued for any Old 10 3/4% Notes exchanged
to the DTC account of the undersigned or the undersigned's custodian as
specified in the Account Information Table above. Unless otherwise indicated
under "Special Issuance and Payment Instructions," please issue the check for
the appropriate cash consideration for any Old 10 3/4% Notes exchanged and issue
any Old 10 3/4% Notes not tendered or not exchanged in the name of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the appropriate cash consideration for
any Old 10 3/4% Notes exchanged and deliver any Old 10 3/4% Notes not tendered
or not exchanged (unless tender was effected by book-entry transfer, in which
case credit such Old 10 3/4% Notes to the Book-Entry Transfer Facility account
from which tender was effected) to the undersigned at the address shown below
the undersigned's signature.
In the event that "Special Issuance and Payment Instructions" is completed,
please issue the check for the appropriate cash consideration for any Old 10
3/4% Notes exchanged and/or issue any Old 10 3/4% Notes not tendered or not
exchanged in the name of the person so indicated. In the event that "Special
Delivery Instructions" is completed, please mail the check for the appropriate
cash consideration for any Old 10 3/4% Notes exchanged and/or deliver any
certificates for Old 10 3/4% Notes not tendered or not exchanged (unless tender
was effected by book-entry transfer, in which case credit such Old 10 3/4% Notes
to the Book-Entry Transfer Facility account from which tender was effected) to
the person at the address so indicated. The undersigned recognizes that the
Company has no obligation under the "Special Issuance and Payment Instructions"
provision or the "Special Delivery Instructions" provision of this Letter of
Transmittal to effect the transfer of any Old 10 3/4% Notes from the name of the
Record Holder (as defined below) thereof if the Company does not accept for
exchange any of the principal amount of the Old 10 3/4% Notes tendered pursuant
to this Letter of Transmittal.
7
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE AND PAYMENT
INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Old 10 3/4% Notes to be returned in the principal
amount of Old 10 3/4% Notes not tendered or not exchanged and/or the check for
the appropriate cash consideration for any Old 10 3/4% Notes exchanged, are to
be issued in the name of someone other than the undersigned.
Please issue (check one or both)
[_] check [_] Old 10 3/4% Notes not tendered or not
exchanged, to:
Name.........................................................................
(Please Print)
Address......................................................................
.............................................................................
.............................................................................
(Include Zip Code)
.............................................................................
(Taxpayer Identification or Social Security
Number(s)* of Payee)
.............................................................................
* Please also complete the enclosed Substitute Form
W-9.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Old 10 3/4% Notes to be issued in the principal
amount of Old 10 3/4% Notes not tendered or not exchanged and/or the check for
the appropriate cash consideration for any Old 10 3/4% Notes exchanged, are to
be sent to someone other than the undersigned, or to the undersigned at an
address other than that shown below the undersigned's signature.
Please send (check one or both)
[_] check [_] Old 10 3/4% Notes not tendered or not
exchanged, to:
Name.........................................................................
(Please Print)
Address......................................................................
.............................................................................
.............................................................................
(Include Zip Code)
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(PLEASE COMPLETE THE SUBSTITUTE FORM W-9 ON THIS LETTER OF TRANSMITTAL)
BY SIGNING THIS LETTER OF TRANSMITTAL THE HOLDER HEREBY CONSENTS TO THE PROPOSED
AMENDMENTS.
This Letter of Transmittal and Consent must be signed by (i) the holder(s)
exactly as the name(s) appear(s) on the Old 10 3/4% Notes or on a security
position listing with respect thereto (a person whose name so appears, a "Record
Holder") or (ii) person(s) authorized to become Record Holder(s) by Old 10 3/4%
Notes and/or instruments of transfer transmitted herewith. If the signature(s)
appearing below is (are) not of the Record Holder(s), then the Record Holder(s)
must sign the form of Consent appearing below and provide the necessary
instruments of transfer. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation, agent or other person
acting in a fiduciary or representative capacity, the line entitled "Capacity"
must be filled out. See Instruction 5.
__________________________________ _____________________________________
Signature of Owner Signature of Owner
(if more than one)
__________________________________ _____________________________________
Name of Owner (Please Print) Name of Owner (if more
than one) (Please Print)
Dated ______________________, 1995.
Address_________________________________________________________________________
(Please Print) (Include Zip Code)
Capacity (full title) __________________________________________________________
Taxpayer Identification Number or Social Security Number________________________
Telephone Number__________________________________
(Include Area Code)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm ________________________ Authorized Signature ___________________
Dated ______________________, 1995.
- --------------------------------------------------------------------------------
9
<PAGE>
CONSENT
IF THIS LETTER OF TRANSMITTAL IS SIGNED BY A HOLDER OF OLD 10 3/4% NOTES WHO IS
NOT THE RECORD HOLDER, THEN THE RECORD HOLDER MUST SIGN THE FOLLOWING CONSENT
(OR A SEPARATE DOCUMENT SUBSTANTIALLY IN THE FORM OF THE FOLLOWING CONSENT,
WHICH DOCUMENT MUST BE DELIVERED TO THE EXCHANGE AGENT BEFORE 11:59 P.M., NEW
YORK CITY TIME, ON THE EXPIRATION DATE), WITH SIGNATURE GUARANTEED BY AN
ELIGIBLE INSTITUTION (AS DEFINED IN INSTRUCTION 1):
This Consent must be signed by the Record Holder(s) exactly as the name(s)
appear(s) on the Old 10 3/4% Notes or on a security position listing respect
thereto. If the signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, the line entitled "Capacity" must be
filled out. See Instruction 5.
Pursuant to the Exchange Offer and the Company's solicitation of Consents to the
Proposed Amendments, the undersigned Record Holder(s) of the Old 10 3/4% Notes
tendered pursuant to this Letter of Transmittal hereby consent(s) to the
Proposed Amendments.
______________________________ ____________________________________________
Signature of Record Holder Signature of Record Holder (if more than
one)
______________________________ ____________________________________________
Name of Record Holder Name of Record Holder (Please Print)
(Please Print)
(if more than one)
Dated _____________________, 1995.
Address
____________________________________________________________________________
(Please Print) (Include Zip Code)
Capacity (full title)________________________________________________________
Taxpayer Identification Number or Social Security Number ____________________
Telephone Number__________________________________
(Include Area Code)
GUARANTEE OF SIGNATURE(S)
(If required -- See Instructions 1 and 5)
Name of Firm _______________________ Authorized Signature _______________
Dated ___________________________, 1995.
- --------------------------------------------------------------------------------
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. SIGNATURE GUARANTEES. All signatures on this Letter of Transmittal
must be guaranteed by a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, including (as such terms are
defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
dealer, municipal securities broker, government securities dealer or government
securities broker; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
institution that is a participant in a Securities Transfer Association
recognized program (each an "Eligible Institution"); HOWEVER NO GUARANTEE OF
SIGNATURE IS REQUIRED IF the Old 10 3/4% Notes tendered hereby are tendered (a)
by a Record Holder who has not completed either the box entitled "Special
Issuance and Payment Instructions" or the box entitled "Special Delivery
Instructions" or (b) for the account of an Eligible Institution. If the Record
Holder of the Old 10 3/4% Notes tendered hereby is a person other than the
signer of this Letter of Transmittal, see Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND OLD 10 3/4% NOTES; ISSUANCE OF
NEW 2005 NOTES IN BOOK-ENTRY FORM. All physically tendered Old 10 3/4% Notes, or
a confirmation of a book-entry transfer into the Exchange Agent's account at a
Book-Entry Transfer Facility of all Old 10 3/4% Notes delivered electronically,
together with a properly completed and duly executed Letter of Transmittal, and
any other documents required by this Letter of Transmittal, should be mailed or
delivered to the Exchange Agent at its address set forth on the front page
hereof and must be received by the Exchange Agent prior to 11:59 p.m., New York
City time, on the Expiration Date.
Because all New 2005 Notes will be delivered only in book-entry form
through DTC, the appropriate DTC participant name and number (along with any
other required account information) to permit such delivery must be provided in
the Account Information Table. Failure to do so will render a tender of Old 10
3/4% Notes defective, and the Company will have the right, which it may waive,
to reject such tender. Holders who anticipate tendering by a method other than
through DTC are urged to promptly contact a bank, broker or other intermediary
--------
(that has the facility to hold securities custodially through DTC) to arrange
for receipt of any New 2005 Notes delivered pursuant to the Exchange Offer and
to obtain the information necessary to complete the Account Information Table.
THE METHOD OF DELIVERY OF OLD 10 3/4% NOTES, THIS LETTER OF TRANSMITTAL AND
ANY REQUIRED SIGNATURE GUARANTEES, INCLUDING BOOK-ENTRY DELIVERY THROUGH A BOOK-
ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER AND,
EXCEPT AS OTHERWISE PROVIDED IN THIS LETTER OF TRANSMITTAL, DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
All tendering holders, by execution of this Letter of Transmittal, waive
any right to receive any notice of the acceptance of their tender, except as
expressly provided in the Prospectus.
3. INADEQUATE SPACE. If the space provided in the Description Table is
inadequate, the numbers and principal amount of the Old 10 3/4% Notes tendered
should be listed on a separate signed schedule and attached hereto.
4. PARTIAL TENDERS AND CONSENTS. Tenders of Old 10 3/4% Notes will be
accepted only in integral multiples of $1,000. The aggregate principal amount
of all Old 10 3/4% Notes delivered to the Exchange Agent will be deemed to have
been tendered and a Consent given with respect thereto unless otherwise
indicated in the Description Table. Book-entry transfers to the Exchange Agent
should be made in the exact principal amount of Old 10 3/4% Notes tendered and
in respect of which a Consent is given. With respect to a tender of Old 10 3/4%
Notes held in physical form, if the tender is made with respect to less than the
entire principal amount of the Old 10 3/4% Notes delivered herewith, enter the
principal amount (in integral multiples of $1,000) of the Old 10 3/4% Notes that
are to be tendered and in respect of which a Consent is given in the column in
the Description Table entitled "Principal Amount Tendered and in Respect of
Which Consent Is Given." In such case, a new Old 10 3/4% Note for the principal
amount of the untendered Old 10 3/4% Notes will be issued.
11
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS. IF
THIS LETTER OF TRANSMITTAL IS SIGNED BY A PERSON OTHER THAN THE RECORD HOLDER, A
CONSENT IN THE FORM PROVIDED IN THIS LETTER OF TRANSMITTAL MUST BE OBTAINED FROM
THE RECORD HOLDER WITH THE SIGNATURE GUARANTEED.
If this Letter of Transmittal is signed by the Record Holder(s) of the Old
10 3/4% Notes tendered hereby, the signature(s) must correspond with the name(s)
as written on the face of the Old 10 3/4% Notes or on a security position
listing with respect thereto without any change whatsoever. If any of the
tendered Old 10 3/4% Notes are held by two or more Record Holders, all such
persons must sign this Letter of Transmittal. If any of the tendered Old 10 3/4%
Notes are registered in different names, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations.
If this Letter of Transmittal is signed by the Record Holder(s) of the Old
10 3/4% Notes tendered and if any Old 10 3/4% Notes not tendered or not
exchanged are to be returned to the undersigned, then no endorsements of Old 10
3/4% Notes or separate bond powers or other instruments of transfer are required
to effect a valid tender. If the Letter of Transmittal is signed by someone
other than the Record Holder or if any Old 10 3/4% Notes not tendered or not
exchanged are to be returned to someone other than the undersigned, then
endorsement of the Old 10 3/4% Notes or separate bond powers or other
instruments of transfer will be required to effect a valid tender. Signatures on
any such Old 10 3/4% Notes or bond powers must be guaranteed by an Eligible
Institution. See Instruction 1.
If this Letter of Transmittal, any Consent or any Old 10 3/4% Notes or bond
powers or other instruments of transfer are signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, agent or
other person(s) acting in a fiduciary or representative capacity, such person
(s) should so indicate when signing and must submit proper evidence satisfactory
to the Exchange Agent of their authority so to act.
6. TRANSFER TAXES. The Company will pay or cause to be paid security
transfer taxes, if any, with respect to the sale and transfer of any Old 10 3/4%
Notes to it pursuant to the Exchange Offer. If, however, payment of the
appropriate cash consideration for any Old 10 3/4% Notes is to be made to, or
Old 10 3/4% Notes not tendered or not accepted for exchange are to be issued to
or returned in the name of, any person other than the Record Holder(s), the
amount of any security transfer taxes (whether imposed on the Record Holder(s),
such other person or otherwise) payable on account of the payment or transfer to
such person will be billed directly to the tendering holder and/or deducted from
any payments due with respect to the tendered Old 10 3/4% Notes unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted.
7. SPECIAL ISSUANCE AND PAYMENT AND DELIVERY INSTRUCTIONS. If Old 10 3/4%
Notes representing the aggregate principal amount of Old 10 3/4% Notes not
tendered or not exchanged under the Exchange Offer and/or checks for cash
consideration for any Old 10 3/4% Notes exchanged, are to be issued in the name
of a person other than the undersigned, or if such Old 10 3/4% Notes and/or
checks are to be sent to someone other than the undersigned or to the
undersigned at a different address than that appearing below the signature of
the undersigned in the signature box above, the boxes entitled "Special Issuance
and Payment Instructions" and "Special Delivery Instructions" in this Letter of
Transmittal must be completed as appropriate. Regardless of any information
appearing in "Special Issuance and Payment Instructions" or "Special Delivery
Instructions", all New 2005 Notes will be delivered only in book-entry form
through DTC and only to the DTC account of the undersigned or the undersigned's
custodian.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or additional copies of the Prospectus or this Letter of Transmittal should be
directed to the Information Agent at the address and telephone number set forth
on the back cover page hereof and on the back cover page of the Prospectus.
9. SUBSTITUTE FORM W-9. A tendering holder (or other payee) generally is
required to provide the Exchange Agent with a correct taxpayer identification
number ("TIN") on the Substitute Form W-9 that is provided on the back cover
page and to certify that it is not subject to backup withholding. Failure to
provide the information on the form may subject the tendering holder (or other
payee) to 31% federal backup withholding tax on the payments made to such
person, unless such person otherwise establishes an exemption from backup
withholding tax.
12
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL TOGETHER WITH THE OLD 10 3/4% NOTES
TENDERED AND ANY OTHER DOCUMENTS REQUIRED BY THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH HOLDER IS URGED TO CONSULT A TAX ADVISOR TO DETERMINE
THE PARTICULAR TAX CONSEQUENCES TO IT (INCLUDING THE APPLICATION AND EFFECT OF
FOREIGN, STATE AND LOCAL TAX LAWS) OF THE OFFER. CERTAIN HOLDERS (INCLUDING
INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FOREIGN TAXPAYERS) MAY BE
SUBJECT TO SPECIAL RULES NOT DISCUSSED BELOW. THE DISCUSSION DOES NOT CONSIDER
THE EFFECT OF ANY APPLICABLE FOREIGN, STATE AND LOCAL TAX LAWS.
SUBSTITUTE FORM W-9
Under the federal income tax laws backup withholding at a rate of 31% may
be required with respect to payments of interest or redemption proceeds made to
certain holders pursuant to the Exchange Offer or the terms of the New 2005
Notes. In order to avoid such backup withholding, each tendering holder must
provide the Exchange Agent with such holder's correct TIN by completing the
Substitute Form W-9 set forth below. In general, if a holder is an individual,
the TIN is the Social Security number of such individual. If the Exchange Agent
is not provided with the correct TIN, the holder may be subject to a penalty
imposed by the Internal Revenue Service.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that holder must submit a statement signed under penalty of perjury
attesting as to that status. Forms for such statement can be obtained from the
Exchange Agent.
CONSEQUENCES OF FAILURE TO COMPLETE SUBSTITUTE FORM W-9
Failure to complete Substitute Form W-9 will not, by itself, cause the Old
10 3/4% Notes to be deemed invalidly tendered but may require the Exchange Agent
to withhold 31% of the amount of any payments made pursuant to the Exchange
Offer. Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, the holder may claim a refund from the Internal Revenue Service.
13
<PAGE>
- --------------------------------------------------------------------------------
PAYER'S NAME: CHEMICAL BANK
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Social Security Number
SUBSTITUTE
FORM W-9 PART I -- PLEASE PROVIDE YOUR TAXPAYER
IDENTIFICATION NUMBER IN THE BOX AT or
THE RIGHT AND CERTIFY BY SIGNING
AND DATING BELOW
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
Employer Identification Number
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION ___________________________________________________
NUMBER (TIN) (if awaiting TIN write "Applied For")
----------------------------------------------------------------------------------------------------
PART II -- For Payees exempt from backup withholding, see the Important Tax Information above and
Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 enclosed
herewith and complete as instructed therein.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Certifications - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or a Taxpayer Identification Number has not been issued to me and either
(a) I have mailed or delivered an application to receive a Taxpayer
Identification Number to the appropriate Internal Tax Revenue Service
Center or Social Security Administration office or (b) I intend to mail or
deliver an application in the near future). (I understand that if I do not
provide a Taxpayer Identification Number to the payer, 31% of all
reportable payments made to me thereafter will be withheld until I provide
a number to the payer and that, if I do not provide my Taxpayer
Identification Number within sixty (60) days, such retained amounts shall
be remitted to the Internal Revenue Service ("IRS") as backup withholding.
(2) I am not subject to backup withholding either because I have not been
notified by the IRS that I am subject to backup withholding as a result of
a failure to report all interest or dividends or the IRS has notified me
that I am no longer subject to backup withholding.
Certification Instruction - You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to withholding you received another
notification from the IRS that you are no longer subject to backup withholding,
do not cross out item (2). (Also see the IMPORTANT TAX INFORMATION above.)
- --------------------------------------------------------------------------------
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Signature______________________________________________________ Date ___________
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
14
<PAGE>
The Dealer Manager for the Exchange Offers is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10006
Telephone: (800) 558-3745 (toll free)
Telephone: (212) 783-3738 (call collect)
Attention: Liability Management Group
Any questions concerning the terms of the Exchange Offers
may be directed to the Dealer Manager.
The Information Agent for the Exchange Offer is:
D.F. KING & CO. INC.
99 Water Street
New York, New York 10005
Telephone: (800) 829-6554
Any questions concerning the completion of this form,
tender procedures or requests
for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Information Agent.
<PAGE>
[YELLOW]
LETTER OF TRANSMITTAL AND CONSENT
To Tender and to Give Consent in Respect of
10 1/4% Subordinated Notes Due April 15, 2004
CUSIP No. 42221H-AH-0
of
HEALTHTRUST, INC. - THE HOSPITAL COMPANY
In Exchange for Notes Due June 1, 2000
of
COLUMBIA/HCA HEALTHCARE CORPORATION
Pursuant to the Prospectus and Consent Solicitation
dated ________, 1995
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE ON ________, ________, 1995, UNLESS EXTENDED
(THE "EXPIRATION DATE") AT 11:59 P.M., NEW YORK CITY TIME.
OLD 10 1/4% NOTES TENDERED FOR EXCHANGE MAY BE WITHDRAWN AT ANY TIME PRIOR
TO 11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
NO GUARANTEED DELIVERY PROCEDURES ARE AVAILABLE WITH RESPECT TO THE
EXCHANGE OFFER.
- --------------------------------------------------------------------------------
TO: CHEMICAL BANK, EXCHANGE AGENT
<TABLE>
<CAPTION>
By Mail: Overnight or Hand Delivery: Facsimile Transmission:
<S> <C> <C>
Chemical Bank Chemical Bank (212) 629-8015
Reorganization Department 55 Water Street (212) 629-8016
P.O. Box 3085 Second Floor - Room 234
GPO Station New York, New York 10041 Confirm by Telephone:
New York, New York 10116-3086 Attention: Reorganization Department (212) 946-7137
</TABLE>
QUESTIONS REGARDING THE EXCHANGE OFFER OR COMPLETION OF THIS LETTER OF
TRANSMITTAL MAY BE DIRECTED TO D.F. KING & CO., INC., THE INFORMATION AGENT FOR
THE EXCHANGE OFFER, AT (800) 829-6554 (TOLL FREE).
DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT (THIS "LETTER OF
TRANSMITTAL") TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE
NUMBER, OTHER THAN AS SET FORTH ABOVE OR OTHER THAN IN ACCORDANCE WITH THE
INSTRUCTIONS HEREIN, WILL NOT CONSTITUTE VALID DELIVERY. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
This Letter of Transmittal is to be used in connection with (i) the
physical delivery of Old 10 1/4% Notes (as defined herein) to Chemical Bank, as
exchange agent (the "Exchange Agent") or (ii) the delivery of Old 10 1/4% Notes
by book-entry transfer to the account of the Exchange Agent at The Depository
Trust Company ("DTC"), the Midwest Securities Trust Company ("MSTC") or the
Philadelphia Depository Trust Company ("Philadep", and together with DTC and
MSTC, the "Book-Entry Transfer Facilities"), in accordance with the procedures
described in the Prospectus and Consent Solicitation dated __________, 1995
(together, the "Prospectus"), under the heading "The Exchange Offers --
Procedures for Tendering Old Securities and Giving Consents."
Pursuant to the Prospectus, receipt of which is hereby acknowledged,
Columbia/HCA Healthcare Corporation (the "Company") is offering to exchange New
2000 Notes (as defined herein) plus an amount of cash consideration for Old 10
1/4% Notes properly tendered. Subject to the terms and conditions of the
Exchange Offer, the Company will accept for exchange all Old 10 1/4% Notes that
are properly tendered (and not withdrawn) prior to 11:59 p.m., New York City
time, on the Expiration Date.
Holders who tender Old 10 1/4% Notes are required to consent to the
proposed amendments (as defined below). THE COMPLETION, EXECUTION AND DELIVERY
OF THIS LETTER OF TRANSMITTAL WILL CONSTITUTE A CONSENT (AS DEFINED BELOW) TO
THE PROPOSED AMENDMENTS.
NO GUARANTEED DELIVERY PROCEDURES ARE AVAILABLE WITH RESPECT TO THE
EXCHANGE OFFERS. Therefore, the exchange agent must receive this Letter of
Transmittal and the Old 10 1/4% Notes tendered herewith by 11:59 p.m., New York
City time, on the expiration date in order for such Old 10 1/4% Notes to be
validly tendered.
Holders who wish to tender their Old 10 1/4% Notes (and thereby consent to
the Proposed Amendments) must, at a minimum, fill in the necessary account
information in the table below entitled "Account Information" (the "Account
Information Table"), complete columns (1) through (3) in the table below
entitled "Description of Old 10 1/4% Notes Tendered and In Respect of Which
Consent Is Given" (the "Description Table") and complete and sign in the box
below entitled "SIGN HERE." If only columns (1) through (3) are completed in the
Description Table, the holder will be deemed to have consented to the Proposed
Amendments in respect of, and to have tendered, all Old 10 1/4% Notes listed in
the Description Table. If a holder wishes to tender less than all of such Old 10
1/4% Notes delivered to the Exchange Agent, column (4) of the Description Table
must be completed in full. See Instruction 4.
2
<PAGE>
IN ORDER TO EFFECT A VALID TENDER OF OLD 10 1/4% NOTES THE UNDERSIGNED MUST
COMPLETE THE ACCOUNT INFORMATION TABLE BELOW. NEW 2000 NOTES WILL BE DELIVERED
ONLY IN BOOK-ENTRY FORM THROUGH DTC AND ONLY TO THE DTC ACCOUNT OF THE
UNDERSIGNED OR THE UNDERSIGNED'S CUSTODIAN. ACCORDINGLY, IF THE UNDERSIGNED
TENDERS (I) BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC, THE
FIRST BOX IN THE ACCOUNT INFORMATION TABLE MUST BE CHECKED AND ANY NEW 2000
NOTES WILL BE DELIVERED TO THE DTC PARTICIPANT FROM WHICH TENDER WAS EFFECTED,
(II) BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT MSTC OR PHILADEP,
THE SECOND BOX IN THE ACCOUNT INFORMATION TABLE MUST BE CHECKED AND THE
UNDERSIGNED MUST PROVIDE INFORMATION REGARDING THE DTC PARTICIPANT TO WHICH ANY
NEW 2000 NOTES SHOULD BE DELIVERED, OR (III) BY PHYSICAL DELIVERY OF
CERTIFICATES TO THE EXCHANGE AGENT, THE THIRD BOX IN THE ACCOUNT INFORMATION
TABLE MUST BE CHECKED AND THE UNDERSIGNED MUST PROVIDE INFORMATION REGARDING THE
DTC PARTICIPANT TO WHICH ANY NEW 2000 NOTES SHOULD BE DELIVERED. FAILURE TO
PROVIDE THE INFORMATION NECESSARY TO EFFECT DELIVERY OF NEW 2000 NOTES WILL
RENDER SUCH HOLDER'S TENDER DEFECTIVE AND THE COMPANY WILL HAVE THE RIGHT, WHICH
IT MAY WAIVE, TO REJECT SUCH TENDER.
ATTENTION ANY TENDERING HOLDER WHOSE OLD 10 1/4% NOTES WILL NOT BE
---
DELIVERED TO THE EXCHANGE AGENT THROUGH DTC: Because New 2000 Notes will be
delivered only in book-entry form through DTC, you are urged to contact promptly
--------
a bank, broker or other intermediary (that has the facility to hold securities
custodially through DTC) to arrange for receipt of any New 2000 Notes delivered
pursuant to the Exchange Offer and to obtain the information necessary to
complete the Account Information Table.
- --------------------------------------------------------------------------------
TO VALIDLY COMPLETE THE LETTER OF TRANSMITTAL (AND THEREBY CONSENT TO THE
PROPOSED AMENDMENTS), COMPLETE PAGES 4 AND 5, COMPLETE AND SIGN PAGE 9, AND
(IF NECESSARY) COMPLETE AND SIGN PAGES, 8, 10 AND 14.
THE INSTRUCTIONS STARTING ON PAGE 11 FORM A PART OF THE TERMS AND
CONDITIONS OF THE EXCHANGE OFFER AND SHOULD BE READ CAREFULLY.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
ACCOUNT INFORMATION
Complete One Method of Tender Only *
- --------------------------------------------------------------------------------
VIA DTC
- -------
[_] CHECK HERE IF TENDERED OLD 10 1/4% NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE
FOLLOWING:
Name of DTC Participant _________________________________________________
DTC Participant Number __________________________________________________
- --------------------------------------------------------------------------------
VIA MSTC OR PHILADEP
- --------------------
[_] CHECK HERE IF TENDERED OLD 10 1/4% NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT A BOOK-ENTRY TRANSFER FACILITY
OTHER THAN DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ___________________________________________
Name of Book-Entry Transfer Facility [_] MSTC [_] PHILADEP (check one)
DTC Participant Receiving New 2000 Notes: **
DTC Participant Name ____________________________________________________
DTC Participant Number __________________________________________________
Customer Account Number _________________________________________________
Participant Contact Name/Phone Number ___________________________________
- --------------------------------------------------------------------------------
VIA PHYSICAL DELIVERY
- ---------------------
[_] CHECK HERE IF TENDERED OLD 10 1/4% NOTES ARE BEING DELIVERED IN PHYSICAL
FORM AND COMPLETE THE FOLLOWING:
DTC Participant Receiving New 2000 Notes: **
DTC Participant Name ____________________________________________________
DTC Participant Number __________________________________________________
Customer Account Number _________________________________________________
Participant Contact Name/Phone Number ___________________________________
- --------------------------------------------------------------------------------
* Failure to complete one, and only one, method of tender will render the
undersigned's tender defective.
** Failure to provide the information necessary to effect delivery of New 2000
Notes will render the undersigned's tender defective.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF OLD 10 1/4% NOTES TENDERED AND IN RESPECT OF WHICH CONSENT IS
GIVEN
(SEE INSTRUCTIONS 3 AND 4)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OLD 10 1/4% NOTES TENDERED AND IN RESPECT
NAME(S) AND ADDRESS(ES) OF HOLDER(S) OF WHICH CONSENT IS GIVEN
(PLEASE FILL IN EXACTLY AS SUCH NAME (ATTACH ADDITIONAL SIGNED SCHEDULE IF NECESSARY)
APPEARS ON THE FACE OF THE OLD SECURITIES
TENDERED OR ON A SECURITY POSITION
LISTING WITH RESPECT THERETO)
- ------------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
- ------------------------------------------------------------------------------------------------------------------------------------
Certificate Total Principal Principal Amount Tendered**
Number(s)* Amount of Old 10 1/4% Notes** and in Respect of Which
Consent is Given
(if less than all)
<S> <C> <C> <C>
--------------------------------------------------------------------------------------
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by holders tendering by book-entry transfer.
** You must consent to the Proposed Amendments in respect of all Old 10 1/4%
Notes tendered by you; completion of column (3) will constitute a Consent
to the Proposed Amendments in respect of such Old 10 1/4% Notes, unless
less than all Old 10 1/4% Notes are to be tendered as specified in column
(4), in which case Consents only with respect to such lesser amount of Old
10 1/4% Notes shall be given.
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby (i) consents (the "Consent") to the proposed
amendments described in the Prospectus (the "Proposed Amendments"), to the
Indenture, dated as of March 30, 1993 (the "Indenture"), between Healthtrust,
Inc. - The Hospital Company ("Healthtrust") and The First National Bank of
Boston, as trustee (the "Old Trustee"), pursuant to which the 10 1/4%
Subordinated Notes of Healthtrust due April 15, 2004 (the "Old 10 1/4% Notes")
indicated above were issued, and (ii) tenders to the Company the Old 10 1/4%
Notes indicated above in exchange for a like principal amount of the Company's
Notes due June 1, 2000 (the "New 2000 Notes") and an amount of cash
consideration, upon the terms and subject to the conditions set forth in the
Prospectus (receipt of which is hereby acknowledged) and in this Letter of
Transmittal, both of which together constitute the Company's offer (the
"Exchange Offer") to exchange New 2000 Notes and an amount of cash consideration
for Old 10 1/4% Notes properly tendered.
The amount of cash consideration to be paid by the Company with respect to
Old 10 1/4% Notes properly tendered and accepted by the Company will be
calculated as follows (and the results of such calculation will be publicly
announced no later than 9:00 a.m., New York City time, on the business day prior
to the Expiration Date). A price that includes accrued but unpaid interest to
the Exchange Date (as defined below) will be calculated with respect to the Old
10 1/4% Notes (the "Reference Total Price"), as described in the Prospectus.
Such Reference Total Price will be based on a yield to the first optional
redemption date with respect to such notes (April 15, 1999) equal to the sum of
(i) the yield on the 7% U.S. Treasury Note due April 15, 1999, as of 4:00 p.m.,
New York City time, on the second business day prior to the Expiration Date,
plus (ii) ___%. In exchange for each $1,000 principal amount of Old 10 1/4%
Notes properly tendered and accepted by the Company,
5
<PAGE>
the undersigned will receive, in addition to $1,000 principal amount of New 2000
Notes, an amount of cash consideration equal to the amount by which the
Reference Total Price for the Old 10 1/4% Notes exceeds $1,000. The New 2000
Notes will be delivered by book-entry transfer to the DTC account of the
undersigned or the undersigned's custodian as specified in the Account
Information Table above, and the appropriate cash payment will be made by check
to the undersigned (unless specified otherwise in "Special Issuance and Delivery
Instructions" below) in New York (next day) funds, on the fifth business day
following the Expiration Date (the "Exchange Date"). THE UNDERSIGNED
ACKNOWLEDGES THAT TENDERING OLD 10 1/4% NOTES IN ACCORDANCE WITH THE EXCHANGE
OFFER CONSTITUTES A CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT TO ALL OLD
10 1/4% NOTES SO TENDERED.
Subject to, and effective upon, acceptance for exchange of the Old 10 1/4%
Notes tendered hereby in accordance with the terms of the Exchange Offer, the
undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to, and any and all claims in
respect of or arising or having arisen as a result of the undersigned's status
as a holder of, all Old 10 1/4% Notes tendered hereby. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent as the true and lawful
agent and attorney-in-fact of the undersigned, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for such Old 10 1/4% Notes or transfer
ownership of such Old 10 1/4% Notes on the account books maintained by a Book-
Entry Transfer Facility, in either such case, together with all accompanying
evidences of transfer and authenticity, to or upon the order of the Company, (b)
present such Old 10 1/4% Notes for transfer on the books of the Company, (c)
deliver the Consent contained herein to the Old Trustee, and (d) receive all
benefits and otherwise exercise all rights of beneficial ownership of such Old
10 1/4% Notes, all in accordance with the terms of the Exchange Offer.
The undersigned hereby represents and warrants that: (a) the undersigned
(i) has full power and authority to tender the Old 10 1/4% Notes tendered hereby
and to sell, assign and transfer all right, title and interest in and to such
Old 10 1/4% Notes and (ii) either has full power and authority to consent to the
Proposed Amendments or is delivering a duly executed Consent (which is included
in this Letter of Transmittal) from a person or entity having such power and
authority; and (b) the Company will acquire good, indefeasible and unencumbered
title to such Old 10 1/4% Notes, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
acquired by the Company. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable to complete the sale, assignment and transfer to the
Company of the Old 10 1/4% Notes tendered hereby or to perfect the undersigned's
Consent to the Proposed Amendments.
The undersigned understands that, subject to the terms and conditions of
the Exchange Offer, Old 10 1/4% Notes properly tendered and not withdrawn will
be exchanged for New 2000 Notes and an amount of cash consideration as described
above. If any amount of tendered Old 10 1/4% Notes is not exchanged for any
reason, or if certificates are submitted that evidence a greater principal
amount of Old 10 1/4% Notes than the principal amount to be tendered, such
unexchanged Old 10 1/4% Notes or Old 10 1/4% Notes for untendered amounts, as
the case may be, will be returned, without expense, to the undersigned, either
to the Book-Entry Transfer Facility account from which tender was effected or to
the address below if Old 10 1/4% Notes were tendered in physical form.
The undersigned understands that the Proposed Amendments will be adopted
with respect to the Old 10 1/4% Notes tendered herewith only upon consummation
of the Exchange Offer with respect to such Old 10 1/4% Notes.
The undersigned understands that tenders of Old 10 1/4% Notes pursuant to
the procedures described in the Prospectus under the heading "The Exchange
Offers --Procedures for Tendering Old Securities and Giving Consents" and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions described in the
Prospectus.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
6
<PAGE>
TENDERS OF OLD 10 1/4% NOTES MADE PURSUANT TO THE EXCHANGE OFFER MAY NOT BE
WITHDRAWN AFTER 11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. PRIOR TO
SUCH TIME, THE WITHDRAWAL OF OLD 10 1/4% NOTES IN ACCORDANCE WITH THE PROCEDURES
SET FORTH IN THE PROSPECTUS WILL EFFECT A REVOCATION OF THE CONSENT WITH RESPECT
TO SUCH OLD 10 1/4% NOTES. Any valid revocation of a Consent will render the
corresponding tender of Old 10 1/4% Notes defective, and the Company will have
the right, which it may waive, to reject such tender. A PURPORTED NOTICE OF
WITHDRAWAL OR REVOCATION WILL BE EFFECTIVE ONLY IF DELIVERED TO THE EXCHANGE
AGENT IN ACCORDANCE WITH THE SPECIFIC PROCEDURES SET FORTH IN THE PROSPECTUS
UNDER THE HEADING "THE EXCHANGE OFFERS -- WITHDRAWAL AND REVOCATION RIGHTS."
Please credit all New 2000 Notes issued for any Old 10 1/4% Notes exchanged
to the DTC account of the undersigned or the undersigned's custodian as
specified in the Account Information Table above. Unless otherwise indicated
under "Special Issuance and Payment Instructions," please issue the check for
the appropriate cash consideration for any Old 10 1/4% Notes exchanged and issue
any Old 10 1/4% Notes not tendered or not exchanged in the name of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the appropriate cash consideration for
any Old 10 1/4% Notes exchanged and deliver any Old 10 1/4% Notes not tendered
or not exchanged (unless tender was effected by book-entry transfer, in which
case credit such Old 10 1/4% Notes to the Book-Entry Transfer Facility account
from which tender was effected) to the undersigned at the address shown below
the undersigned's signature.
In the event that "Special Issuance and Payment Instructions" is completed,
please issue the check for the appropriate cash consideration for any Old 10
1/4% Notes exchanged and/or issue any Old 10 1/4% Notes not tendered or not
exchanged in the name of the person so indicated. In the event that "Special
Delivery Instructions" is completed, please mail the check for the appropriate
cash consideration for any Old 10 1/4% Notes exchanged and/or deliver any
certificates for Old 10 1/4% Notes not tendered or not exchanged (unless tender
was effected by book-entry transfer, in which case credit such Old 10 1/4% Notes
to the Book-Entry Transfer Facility account from which tender was effected) to
the person at the address so indicated. The undersigned recognizes that the
Company has no obligation under the "Special Issuance and Payment Instructions"
provision or the "Special Delivery Instructions" provision of this Letter of
Transmittal to effect the transfer of any Old 10 1/4% Notes from the name of the
Record Holder (as defined below) thereof if the Company does not accept for
exchange any of the principal amount of the Old 10 1/4% Notes tendered pursuant
to this Letter of Transmittal.
7
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE AND PAYMENT
INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Old 10 1/4% Notes to be returned in the principal
amount of Old 10 1/4% Notes not tendered or not exchanged and/or the check for
the appropriate cash consideration for any Old 10 1/4% Notes exchanged, are to
be issued in the name of someone other than the undersigned.
Please issue (check one or both)
[_] check [_] Old 10 1/4% Notes not tendered or not
exchanged, to:
Name ...........................................................................
(Please Print)
Address ........................................................................
................................................................................
................................................................................
(Include Zip Code)
................................................................................
(Taxpayer Identification or Social Security
Number(s) * of Payee)
................................................................................
* Please also complete the enclosed Substitute Form W-9.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Old 10 1/4% Notes to be issued in the principal
amount of Old 10 1/4% Notes not tendered or not exchanged and/or the check for
the any Old 10 1/4% Notes exchanged, are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown below the
undersigned's signature.
Please send (check one or both)
[_] check [_] Old 10 1/4% Notes not tendered or not
exchanged, to:
Name ...........................................................................
(Please Print)
Address ........................................................................
................................................................................
................................................................................
(Include Zip Code)
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(PLEASE COMPLETE THE SUBSTITUTE FORM W-9 ON THIS LETTER OF TRANSMITTAL)
BY SIGNING THIS LETTER OF TRANSMITTAL THE HOLDER HEREBY CONSENTS TO THE
PROPOSED AMENDMENTS.
This Letter of Transmittal and Consent must be signed by (i) the holder(s)
exactly as the name(s) appear(s) on the Old 10 1/4% Notes or on a security
position listing with respect thereto (a person whose name so appears, a "Record
Holder") or (ii) person(s) authorized to become Record Holder(s) by Old 10 1/4%
Notes and/or instruments of transfer transmitted herewith. If the signature(s)
appearing below is (are) not of the Record Holder(s), then the Record Holder(s)
must sign the form of Consent appearing below and provide the necessary
instruments of transfer. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation, agent or other person
acting in a fiduciary or representative capacity, the line entitled "Capacity"
must be filled out. See Instruction 5.
____________________________________ _________________________________________
Signature of Owner Signature of Owner (if more than one)
____________________________________ _________________________________________
Name of Owner (Please Print) Name of Owner (if more than one)
(Please Print)
Dated ______________________, 1995.
Address ________________________________________________________________________
(Please Print) (Include Zip Code)
Capacity (full title) __________________________________________________________
Taxpayer Identification Number or Social Security Number _______________________
Telephone Number___________________________
(Include Area Code)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED - SEE INSTRUCTIONS 1 AND 5)
Name of Firm ___________________________ Authorized Signature _________________
Dated _________________________, 1995.
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
CONSENT
IF THIS LETTER OF TRANSMITTAL IS SIGNED BY A HOLDER OF OLD 10 1/4% NOTES WHO IS
NOT THE RECORD HOLDER, THEN THE RECORD HOLDER MUST SIGN THE FOLLOWING CONSENT
(OR A SEPARATE DOCUMENT SUBSTANTIALLY IN THE FORM OF THE FOLLOWING CONSENT,
WHICH DOCUMENT MUST BE DELIVERED TO THE EXCHANGE AGENT BEFORE 11:59 P.M., NEW
YORK CITY TIME, ON THE EXPIRATION DATE), WITH SIGNATURE GUARANTEED BY AN
ELIGIBLE INSTITUTION (AS DEFINED IN INSTRUCTION 1):
This Consent must be signed by the Record Holder(s) exactly as the name(s)
appear(s) on the Old 10 1/4% Notes or on a security position listing respect
thereto. If the signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, the line entitled "Capacity" must be
filled out. See Instruction 5.
Pursuant to the Exchange Offer and the Company's solicitation of Consents to the
Proposed Amendments, the undersigned Record Holder(s) of the Old 10 1/4% Notes
tendered pursuant to this Letter of Transmittal hereby consent(s) to the
Proposed Amendments.
__________________________________ ___________________________________
Signature of Record Holder Signature of Record Holder (if
more than one)
__________________________________ ____________________________________
Name of Record Holder (Please Name of Record Holder (if more
Print) than one) (Please Print)
Dated __________________________, 1995.
Address ________________________________________________________________________
(Please Print) (Include Zip Code)
Capacity (full title) __________________________________________________________
Taxpayer Identification Number or Social Security Number ___________________
Telephone Number_________________________________
(Include Area Code)
GUARANTEE OF SIGNATURE(S)
(If required -- See Instructions 1 and 5)
Name of Firm ________________________ Authorized Signature _____________________
Dated _______________________, 1995.
- --------------------------------------------------------------------------------
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. SIGNATURE GUARANTEES. All signatures on this Letter of Transmittal must
be guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, including (as such terms are
defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
dealer, municipal securities broker, government securities dealer or government
securities broker; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
institution that is a participant in a Securities Transfer Association
recognized program (each an "Eligible Institution"); HOWEVER NO GUARANTEE OF
SIGNATURE IS REQUIRED IF the Old 10 1/4% Notes tendered hereby are tendered (a)
by a Record Holder who has not completed either the box entitled "Special
Issuance and Payment Instructions" or the box entitled "Special Delivery
Instructions" or (b) for the account of an Eligible Institution. If the Record
Holder of the Old 10 1/4% Notes tendered hereby is a person other than the
signer of this Letter of Transmittal, see Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND OLD 10 1/4% NOTES; ISSUANCE OF
NEW 2000 NOTES IN BOOK-ENTRY FORM. All physically tendered Old 10 1/4% Notes, or
a confirmation of a book-entry transfer into the Exchange Agent's account at a
Book-Entry Transfer Facility of all Old 10 1/4% Notes delivered electronically,
together with a properly completed and duly executed Letter of Transmittal, and
any other documents required by this Letter of Transmittal, should be mailed or
delivered to the Exchange Agent at its address set forth on the front page
hereof and must be received by the Exchange Agent prior to 11:59 p.m., New York
City time, on the Expiration Date.
Because all New 2000 Notes will be delivered only in book-entry form
through DTC, the appropriate DTC participant name and number (along with any
other required account information) to permit such delivery must be provided in
the Account Information Table. Failure to do so will render a tender of Old 10
1/4% Notes defective, and the Company will have the right, which it may waive,
to reject such tender. Holders who anticipate tendering by a method other than
through DTC are urged to promptly contact a bank, broker or other intermediary
--------
(that has the facility to hold securities custodially through DTC) to arrange
for receipt of any New 2000 Notes delivered pursuant to the Exchange Offer and
to obtain the information necessary to complete the Account Information Table.
THE METHOD OF DELIVERY OF OLD 10 1/4% NOTES, THIS LETTER OF TRANSMITTAL AND
ANY REQUIRED SIGNATURE GUARANTEES, INCLUDING BOOK-ENTRY DELIVERY THROUGH A BOOK-
ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER AND,
EXCEPT AS OTHERWISE PROVIDED IN THIS LETTER OF TRANSMITTAL, DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
All tendering holders, by execution of this Letter of Transmittal, waive
any right to receive any notice of the acceptance of their tender, except as
expressly provided in the Prospectus.
3. INADEQUATE SPACE. If the space provided in the Description Table is
inadequate, the numbers and principal amount of the Old 10 1/4% Notes tendered
should be listed on a separate signed schedule and attached hereto.
4. PARTIAL TENDERS AND CONSENTS. Tenders of Old 10 1/4% Notes will be
accepted only in integral multiples of $1,000. The aggregate principal amount of
all Old 10 1/4% Notes delivered to the Exchange Agent will be deemed to have
been tendered and a Consent given with respect thereto unless otherwise
indicated in the Description Table. Book-entry transfers to the Exchange Agent
should be made in the exact principal amount of Old 10 1/4% Notes tendered and
in respect of which a Consent is given. With respect to a tender of Old 10 1/4%
Notes held in physical form, if the tender is made with respect to less than the
entire principal amount of the Old 10 1/4% Notes delivered herewith, enter the
principal amount (in integral multiples of $1,000) of the Old 10 1/4% Notes that
are to be tendered and in respect of which a Consent is given in the column in
the Description Table entitled "Principal Amount Tendered and in Respect of
Which Consent Is Given." In such case, a new Old 10 1/4% Note for the principal
amount of the untendered Old 10 1/4% Notes will be issued.
11
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS. IF
THIS LETTER OF TRANSMITTAL IS SIGNED BY A PERSON OTHER THAN THE RECORD HOLDER, A
CONSENT IN THE FORM PROVIDED IN THIS LETTER OF TRANSMITTAL MUST BE OBTAINED FROM
THE RECORD HOLDER WITH THE SIGNATURE GUARANTEED.
If this Letter of Transmittal is signed by the Record Holder(s) of the Old
10 1/4% Notes tendered hereby, the signature(s) must correspond with the name(s)
as written on the face of the Old 10 1/4% Notes or on a security position
listing with respect thereto without any change whatsoever. If any of the
tendered Old 10 1/4% Notes are held by two or more Record Holders, all such
persons must sign this Letter of Transmittal. If any of the tendered Old 10 1/4%
Notes are registered in different names, it will be necessary to complete, sign
and submit as many separate Letters of Transmittal as there are different
registrations.
If this Letter of Transmittal is signed by the Record Holder(s) of the Old
10 1/4% Notes tendered and if any Old 10 1/4% Notes not tendered or not
exchanged are to be returned to the undersigned, then no endorsements of Old 10
1/4% Notes or separate bond powers or other instruments of transfer are required
to effect a valid tender. If the Letter of Transmittal is signed by someone
other than the Record Holder or if any Old 10 1/4% Notes not tendered or not
exchanged are to be returned to someone other than the undersigned, then
endorsement of the Old 10 1/4% Notes or separate bond powers or other
instruments of transfer will be required to effect a valid tender. Signatures on
any such Old 10 1/4% Notes or bond powers must be guaranteed by an Eligible
Institution. See Instruction 1.
If this Letter of Transmittal, any Consent or any Old 10 1/4% Notes or bond
powers or other instruments of transfer are signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, agent or
other person(s) acting in a fiduciary or representative capacity, such person
(s) should so indicate when signing and must submit proper evidence satisfactory
to the Exchange Agent of their authority so to act.
6. TRANSFER TAXES. The Company will pay or cause to be paid security
transfer taxes, if any, with respect to the sale and transfer of any Old 10 1/4%
Notes to it pursuant to the Exchange Offer. If, however, payment of the
appropriate cash consideration for any Old 10 1/4% Notes is to be made to, or
Old 10 1/4% Notes not tendered or not accepted for exchange are to be issued to
or returned in the name of, any person other than the Record Holder(s), the
amount of any security transfer taxes (whether imposed on the Record Holder(s),
such other person or otherwise) payable on account of the payment or transfer to
such person will be billed directly to the tendering holder and/or deducted from
any payments due with respect to the tendered Old 10 1/4% Notes unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted.
7. SPECIAL ISSUANCE AND PAYMENT AND DELIVERY INSTRUCTIONS. If Old 10 1/4%
Notes representing the aggregate principal amount of Old 10 1/4% Notes not
tendered or not exchanged under the Exchange Offer and/or checks for cash
consideration for any Old 10 1/4% Notes exchanged, are to be issued in the name
of a person other than the undersigned, or if such Old 10 1/4% Notes and/or
checks are to be sent to someone other than the undersigned or to the
undersigned at a different address than that appearing below the signature of
the undersigned in the signature box above, the boxes entitled "Special Issuance
and Payment Instructions" and "Special Delivery Instructions" in this Letter of
Transmittal must be completed as appropriate. Regardless of any information
appearing in "Special Issuance and Payment Instructions" or "Special Delivery
Instructions", all New 2000 Notes will be delivered only in book-entry form
through DTC and only to the DTC account of the undersigned or the undersigned's
custodian.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or additional copies of the Prospectus or this Letter of Transmittal should be
directed to the Information Agent at the address and telephone number set forth
on the back cover page hereof and on the back cover page of the Prospectus.
9. SUBSTITUTE FORM W-9. A tendering holder (or other payee) generally is
required to provide the Exchange Agent with a correct taxpayer identification
number ("TIN") on the Substitute Form W-9 that is provided on the back cover
page and to certify that it is not subject to backup withholding. Failure to
provide the information on the form may subject the tendering holder (or other
payee) to 31% federal backup withholding tax on the payments made to such
person, unless such person otherwise establishes an exemption from backup
withholding tax.
12
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL TOGETHER WITH THE OLD 10 1/4% NOTES
TENDERED AND ANY OTHER DOCUMENTS REQUIRED BY THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH HOLDER IS URGED TO CONSULT A TAX ADVISOR TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO IT (INCLUDING THE APPLICATION AND EFFECT OF
FOREIGN, STATE AND LOCAL TAX LAWS) OF THE OFFER. CERTAIN HOLDERS (INCLUDING
INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FOREIGN TAXPAYERS) MAY BE
SUBJECT TO SPECIAL RULES NOT DISCUSSED BELOW. THE DISCUSSION DOES NOT CONSIDER
THE EFFECT OF ANY APPLICABLE FOREIGN, STATE AND LOCAL TAX LAWS.
SUBSTITUTE FORM W-9
Under the federal income tax laws backup withholding at a rate of 31% may
be required with respect to payments of interest or redemption proceeds made to
certain holders pursuant to the Exchange Offer or the terms of the New 2000
Notes. In order to avoid such backup withholding, each tendering holder must
provide the Exchange Agent with such holder's correct TIN by completing the
Substitute Form W-9 set forth below. In general, if a holder is an individual,
the TIN is the Social Security number of such individual. If the Exchange Agent
is not provided with the correct TIN, the holder may be subject to a penalty
imposed by the Internal Revenue Service.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that holder must submit a statement signed under penalty of perjury
attesting as to that status. Forms for such statement can be obtained from the
Exchange Agent.
CONSEQUENCES OF FAILURE TO COMPLETE SUBSTITUTE FORM W-9
Failure to complete Substitute Form W-9 will not, by itself, cause the Old
10 1/4% Notes to be deemed invalidly tendered but may require the Exchange Agent
to withhold 31% of the amount of any payments made pursuant to the Exchange
Offer. Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, the holder may claim a refund from the Internal Revenue Service.
13
<PAGE>
- -------------------------------------------------------------------------------
PAYER'S NAME: CHEMICAL BANK
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Social Security Number
SUBSTITUTE
FORM W-9 PART I - PLEASE PROVIDE YOUR or
TAXPAYER IDENTIFICATION NUMBER IN
DEPARTMENT OF THE TREASURY THE BOX AT THE RIGHT AND CERTIFY Employer Identification Number
INTERNAL REVENUE SERVICE BY SIGNING AND DATING BELOW ____________________________________
(if awaiting TIN write "Applied For")
PAYER'S REQUEST FOR TAXPAYER --------------------------------------------------------------------------------------------------
IDENTIFICATION NUMBER (TIN) PART II - For Payees exempt from backup withholding, see the Important Tax Information above and
Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 enclosed
herewith and complete as instructed therein.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Certifications - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or a Taxpayer Identification Number has not been issued to me and either
(a) I have mailed or delivered an application to receive a Taxpayer
Identification Number to the appropriate Internal Tax Revenue Service
Center or Social Security Administration office or (b) I intend to mail or
deliver an application in the near future). (I understand that if I do not
provide a Taxpayer Identification Number to the payer, 31% of all
reportable payments made to me thereafter will be withheld until I provide
a number to the payer and that, if I do not provide my Taxpayer
Identification Number within sixty (60) days, such retained amounts shall
be remitted to the Internal Revenue Service ("IRS") as backup withholding.
(2) I am not subject to backup withholding either because I have not been
notified by the IRS that I am subject to backup withholding as a result of
a failure to report all interest or dividends or the IRS has notified me
that I am no longer subject to backup withholding.
Certification Instruction- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to withholding you received another
notification from the IRS that you are no longer subject to backup withholding,
do not cross out item (2). (Also see the IMPORTANT TAX INFORMATION above.)
- --------------------------------------------------------------------------------
Name ___________________________________________________________________________
(Please Print)
Address ________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Signature _____________________________________________________ Date ___________
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
14
<PAGE>
The Dealer Manager for the Exchange Offers is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10006
Telephone: (800) 558-3745 (toll free)
Telephone: (212) 783-3738 (call collect)
Attention: Liability Management Group
Any questions concerning the terms of the Exchange Offers
may be directed to the Dealer Manager.
The Information Agent for the Exchange Offer is:
D.F. KING & CO. INC.
99 Water Street
New York, New York 10005
Telephone: (800) 829-6554
Any questions concerning the completion of this form,
tender procedures or requests
for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Information Agent.
<PAGE>
[BLUE]
LETTER OF TRANSMITTAL AND CONSENT
To Tender and to Give Consent in Respect of
8 3/4% Subordinated Debentures Due March 15, 2005
CUSIP No. 42221H-AG-2
of
HEALTHTRUST, INC. - THE HOSPITAL COMPANY
In Exchange for Notes Due June 1, 2025
of
COLUMBIA/HCA HEALTHCARE CORPORATION
Pursuant to the Prospectus and Consent Solicitation
dated ________, 1995
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE ON ________, ________, 1995, UNLESS EXTENDED (THE
"EXPIRATION DATE") AT 11:59 P.M., NEW YORK CITY TIME.
OLD 8 3/4% DEBENTURES TENDERED FOR EXCHANGE MAY BE WITHDRAWN AT ANY TIME PRIOR
TO 11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
NO GUARANTEED DELIVERY PROCEDURES ARE AVAILABLE WITH RESPECT TO THE EXCHANGE
OFFER.
- --------------------------------------------------------------------------------
TO: CHEMICAL BANK, EXCHANGE AGENT
<TABLE>
<CAPTION>
By Mail: Overnight or Hand Delivery: Facsimile Transmission:
<S> <C> <C>
Chemical Bank Chemical Bank (212) 629-8015
Reorganization Department 55 Water Street (212) 629-8016
P.O. Box 3085 Second Floor - Room 234
GPO Station New York, New York 10041 Confirm by Telephone:
New York, New York 10116-3086 Attention: Reorganization Department (212) 946-7137
</TABLE>
QUESTIONS REGARDING THE EXCHANGE OFFER OR COMPLETION OF THIS LETTER OF
TRANSMITTAL MAY BE DIRECTED TO D.F. KING & CO., INC., THE INFORMATION AGENT FOR
THE EXCHANGE OFFER, AT (800) 829-6554 (TOLL FREE).
DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT (THIS "LETTER OF
TRANSMITTAL") TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE
NUMBER, OTHER THAN AS SET FORTH ABOVE OR OTHER THAN IN ACCORDANCE WITH THE
INSTRUCTIONS HEREIN, WILL NOT CONSTITUTE VALID DELIVERY. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
This Letter of Transmittal is to be used in connection with (i) the
physical delivery of Old 8 3/4% Debentures (as defined herein) to Chemical Bank,
as exchange agent (the "Exchange Agent") or (ii) the delivery of Old 8 3/4%
Debentures by book-entry transfer to the account of the Exchange Agent at The
Depository Trust Company ("DTC"), the Midwest Securities Trust Company ("MSTC")
or the Philadelphia Depository Trust Company ("Philadep", and together with DTC
and MSTC, the "Book-Entry Transfer Facilities"), in accordance with the
procedures described in the Prospectus and Consent Solicitation dated
__________, 1995 (together, the "Prospectus") under the heading "The Exchange
Offers -- Procedures for Tendering Old Securities and Giving Consents."
Pursuant to the Prospectus, receipt of which is hereby acknowledged,
Columbia/HCA Healthcare Corporation (the "Company") is offering to exchange New
2025 Notes (as defined herein) plus an amount of cash consideration for Old 8
3/4% Debentures properly tendered. Subject to the terms and conditions of the
Exchange Offer, the Company will accept for exchange all Old 8 3/4% Debentures
that are properly tendered (and not withdrawn) prior to 11:59 p.m., New York
City time, on the Expiration Date.
Holders who tender Old 8 3/4% Debentures are required to consent to the
proposed amendments (as defined below). THE COMPLETION, EXECUTION AND DELIVERY
OF THIS LETTER OF TRANSMITTAL WILL CONSTITUTE A CONSENT (AS DEFINED BELOW) TO
THE PROPOSED AMENDMENTS.
NO GUARANTEED DELIVERY PROCEDURES ARE AVAILABLE WITH RESPECT TO THE
EXCHANGE OFFERS. Therefore, the Exchange Agent must receive this Letter of
Transmittal and the Old 8 3/4% Debentures tendered herewith by 11:59 p.m., New
York City time, on the expiration date in order for such Old 8 3/4% Debentures
to be validly tendered.
Holders who wish to tender their Old 8 3/4% Debentures (and thereby consent
to the Proposed Amendments) must, at a minimum, fill in the necessary account
information in the table below entitled "Account Information" (the "Account
Information Table"), complete columns (1) through (3) in the table below
entitled "Description of Old 8 3/4% Debentures Tendered and In Respect of Which
Consent Is Given" (the "Description Table") and complete and sign in the box
below entitled "SIGN HERE." If only columns (1) through (3) are completed in
the Description Table, the holder will be deemed to have consented to the
Proposed Amendments in respect of, and to have tendered, all Old 8 3/4%
Debentures listed in the Description Table. If a holder wishes to tender less
than all of such Old 8 3/4% Debentures delivered to the Exchange Agent, column
(4) of the Description Table must be completed in full. See Instruction 4.
2
<PAGE>
IN ORDER TO EFFECT A VALID TENDER OF OLD 8 3/4% DEBENTURES THE UNDERSIGNED
MUST COMPLETE THE ACCOUNT INFORMATION TABLE BELOW. NEW 2025 NOTES WILL BE
DELIVERED ONLY IN BOOK-ENTRY FORM THROUGH DTC AND ONLY TO THE DTC ACCOUNT OF THE
UNDERSIGNED OR THE UNDERSIGNED'S CUSTODIAN. ACCORDINGLY, IF THE UNDERSIGNED
TENDERS (I) BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC, THE
FIRST BOX IN THE ACCOUNT INFORMATION TABLE MUST BE CHECKED AND ANY NEW 2025
NOTES WILL BE DELIVERED TO THE DTC PARTICIPANT FROM WHICH TENDER WAS EFFECTED,
(II) BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT MSTC OR PHILADEP,
THE SECOND BOX IN THE ACCOUNT INFORMATION TABLE MUST BE CHECKED AND THE
UNDERSIGNED MUST PROVIDE INFORMATION REGARDING THE DTC PARTICIPANT TO WHICH ANY
NEW 2025 NOTES SHOULD BE DELIVERED, OR (III) BY PHYSICAL DELIVERY OF
CERTIFICATES TO THE EXCHANGE AGENT, THE THIRD BOX IN THE ACCOUNT INFORMATION
TABLE MUST BE CHECKED AND THE UNDERSIGNED MUST PROVIDE INFORMATION REGARDING THE
DTC PARTICIPANT TO WHICH ANY NEW 2025 NOTES SHOULD BE DELIVERED. FAILURE TO
PROVIDE THE INFORMATION NECESSARY TO EFFECT DELIVERY OF NEW 2025 NOTES WILL
RENDER SUCH HOLDER'S TENDER DEFECTIVE AND THE COMPANY WILL HAVE THE RIGHT, WHICH
IT MAY WAIVE, TO REJECT SUCH TENDER.
ATTENTION ANY TENDERING HOLDER WHOSE OLD 8 3/4% DEBENTURES WILL NOT BE
---
DELIVERED TO THE EXCHANGE AGENT THROUGH DTC: Because New 2025 Notes will be
delivered only in book-entry form through DTC, you are urged to contact promptly
--------
a bank, broker or other intermediary (that has the facility to hold securities
custodially through DTC) to arrange for receipt of any New 2025 Notes delivered
pursuant to the Exchange Offer and to obtain the information necessary to
complete the Account Information Table.
- --------------------------------------------------------------------------------
TO VALIDLY COMPLETE THE LETTER OF TRANSMITTAL (AND THEREBY CONSENT TO THE
PROPOSED AMENDMENTS), COMPLETE PAGES 4 AND 5, COMPLETE AND SIGN PAGE 9, AND (IF
NECESSARY) COMPLETE AND SIGN PAGES 8, 10 AND 14.
THE INSTRUCTIONS STARTING ON PAGE 11 FORM A PART OF THE TERMS AND CONDITIONS OF
THE EXCHANGE OFFER AND SHOULD BE READ CAREFULLY.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
ACCOUNT INFORMATION
Complete One Method of Tender Only*
- --------------------------------------------------------------------------------
VIA DTC
- -------
[_] CHECK HERE IF TENDERED OLD 8 3/4% DEBENTURES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE
FOLLOWING:
Name of DTC Participant____________________________________________________
DTC Participant Number_____________________________________________________
________________________________________________________________________________
VIA MSTC OR PHILADEP
- --------------------
[_] CHECK HERE IF TENDERED OLD 8 3/4% DEBENTURES ARE BEING DELIVERED BY BOOK-
ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT A BOOK-ENTRY TRANSFER
FACILITY OTHER THAN DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution______________________________________________
Name of Book-Entry Transfer Facility [_] MSTC [_] PHILADEP (check one)
DTC Participant Receiving New 2025 Notes:**
DTC Participant Name______________________________________________________
DTC Participant Number____________________________________________________
Customer Account Number___________________________________________________
Participant Contact Name/Phone Number______________________________________
_______________________________________________________________________________
VIA PHYSICAL DELIVERY
- ---------------------
[_] CHECK HERE IF TENDERED OLD 8 3/4% DEBENTURES ARE BEING DELIVERED IN
PHYSICAL FORM AND COMPLETE THE FOLLOWING:
DTC Participant Receiving New 2025 Notes:**
DTC Participant Name_______________________________________________________
DTC Participant Number_____________________________________________________
Customer Account Number____________________________________________________
Participant Contact Name/Phone Number______________________________________
________________________________________________________________________________
* Failure to complete one, and only one, method of tender will render the
undersigned's tender defective.
** Failure to provide the information necessary to effect delivery of New 2025
Notes will render the undersigned's tender defective.
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF OLD 8 3/4% DEBENTURES TENDERED AND IN RESPECT OF WHICH CONSENT
IS GIVEN
(SEE INSTRUCTIONS 3 AND 4)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OLD 8 3/4% DEBENTURES TENDERED AND IN
NAME(S) AND ADDRESS(ES) OF HOLDER(S) RESPECT
(PLEASE FILL IN EXACTLY AS SUCH NAME OF WHICH CONSENT IS GIVEN
APPEARS ON THE FACE OF THE OLD SECURITIES (ATTACH ADDITIONAL SIGNED
TENDERED OR ON A SECURITY POSITION SCHEDULE IF NECESSARY)
LISTING WITH RESPECT THERETO)
- --------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
- --------------------------------------------------------------------------------------------------------------------
CERTIFICATE TOTAL PRINCIPAL PRINCIPAL AMOUNT
NUMBER(S) * AMOUNT OF OLD 8 3/4% TENDERED **
DEBENTURES ** AND IN RESPECT
OF WHICH
CONSENT IS GIVEN
(IF LESS THAN ALL)
<S> <C> <C> <C>
------------------------------------------------------------------------
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Total
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by holders tendering by book-entry transfer.
** You must consent to the Proposed Amendments in respect of all Old 8 3/4%
Debentures tendered by you; completion of column (3) will constitute a
Consent to the Proposed Amendments in respect of such Old 8 3/4%
Debentures, unless less than all Old 8 3/4% Debentures are to be
tendered as specified in column (4), in which case Consents only with
respect to such lesser amount of Old 8 3/4% Debentures shall be given.
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby (i) consents (the "Consent") to the proposed
amendments described in the Prospectus (the "Proposed Amendments"), to the
Indenture, dated as of March 30, 1993 (the "Indenture"), between Healthtrust,
Inc. - The Hospital Company ("Healthtrust") and The First National Bank of
Boston, as trustee (the "Old Trustee"), pursuant to which the 8 3/4%
Subordinated Debentures of Healthtrust due March 15, 2005 (the "Old 8 3/4%
Debentures") indicated above were issued, and (ii) tenders to the Company the
Old 8 3/4% Debentures indicated above in exchange for a like principal amount of
the Company's Notes due June 1, 2025 (the "New 2025 Notes") and an amount of
cash consideration, upon the terms and subject to the conditions set forth in
the Prospectus (receipt of which is hereby acknowledged) and in this Letter of
Transmittal, both of which together constitute the Company's offer (the
"Exchange Offer") to exchange New 2025 Notes and an amount of cash consideration
for Old 8 3/4% Debentures properly tendered.
The amount of cash consideration to be paid by the Company with respect to
Old 8 3/4% Debentures properly tendered and accepted by the Company will be
calculated as follows (and the results of such calculation will be publicly
announced no later than 9:00 a.m., New York City time, on the business day prior
to the Expiration Date). A price that includes accrued but unpaid interest to
the Exchange Date (as defined below) will be calculated with respect to the Old
8 3/4% Debentures (the "Reference Total Price"), as described in the Prospectus.
Such Reference Total Price will be based on a yield to the first optional
redemption date with respect to such debentures (March 15, 2001) equal to the
sum of (i) the yield on the 7 3/4% U.S. Treasury Note due February 15, 2001, as
of 4:00 p.m., New York City time, on the second business day prior to the
5
<PAGE>
Expiration Date, plus (ii) ___%. In exchange for each $1,000 principal amount
of Old 8 3/4% Debentures properly tendered and accepted by the Company, the
undersigned will receive, in addition to $1,000 principal amount of New 2025
Notes, an amount of cash consideration equal to the amount by which the
Reference Total Price for the Old 8 3/4% Debentures exceeds $1,000. The New
2025 Notes will be delivered by book-entry transfer to the DTC account of the
undersigned or the undersigned's custodian as specified in the Account
Information Table above, and the appropriate cash payment will be made by check
to the undersigned (unless specified otherwise in "Special Issuance and Delivery
Instructions" below) in New York (next day) funds, on the fifth business day
following the Expiration Date (the "Exchange Date"). THE UNDERSIGNED
ACKNOWLEDGES THAT TENDERING OLD 8 3/4% DEBENTURES IN ACCORDANCE WITH THE
EXCHANGE OFFER CONSTITUTES A CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT TO
ALL OLD 8 3/4% DEBENTURES SO TENDERED.
Subject to, and effective upon, acceptance for exchange of the Old 8 3/4%
Debentures tendered hereby in accordance with the terms of the Exchange Offer,
the undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to, and any and all claims in
respect of or arising or having arisen as a result of the undersigned's status
as a holder of, all Old 8 3/4% Debentures tendered hereby. The undersigned
hereby irrevocably constitutes and appoints the Exchange Agent as the true and
lawful agent and attorney-in-fact of the undersigned, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) deliver certificates for such Old 8 3/4%
Debentures or transfer ownership of such Old 8 3/4% Debentures on the account
books maintained by a Book-Entry Transfer Facility, in either such case,
together with all accompanying evidences of transfer and authenticity, to or
upon the order of the Company, (b) present such Old 8 3/4% Debentures for
transfer on the books of the Company, (c) deliver the Consent contained herein
to the Old Trustee, and (d) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Old 8 3/4% Debentures, all in accordance
with the terms of the Exchange Offer.
The undersigned hereby represents and warrants that: (a) the undersigned
(i) has full power and authority to tender the Old 8 3/4% Debentures tendered
hereby and to sell, assign and transfer all right, title and interest in and to
such Old 8 3/4% Debentures and (ii) either has full power and authority to
consent to the Proposed Amendments or is delivering a duly executed Consent
(which is included in this Letter of Transmittal) from a person or entity having
such power and authority; and (b) the Company will acquire good, indefeasible
and unencumbered title to such Old 8 3/4% Debentures, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim, when the same are acquired by the Company. The undersigned, upon request,
will execute and deliver any additional documents deemed by the Exchange Agent
or the Company to be necessary or desirable to complete the sale, assignment and
transfer to the Company of the Old 8 3/4% Debentures tendered hereby or to
perfect the undersigned's Consent to the Proposed Amendments.
The undersigned understands that, subject to the terms and conditions of
the Exchange Offer, Old 8 3/4% Debentures properly tendered and not withdrawn
will be exchanged for New 2025 Notes and an amount of cash consideration as
described above. If any amount of tendered Old 8 3/4% Debentures is not
exchanged for any reason, or if certificates are submitted that evidence a
greater principal amount of Old 8 3/4% Debentures than the principal amount to
be tendered, such unexchanged Old 8 3/4% Debentures or Old 8 3/4% Debentures for
untendered amounts, as the case may be, will be returned, without expense, to
the undersigned, either to the Book-Entry Transfer Facility account from which
tender was effected or to the address below if Old 8 3/4% Debentures were
tendered in physical form.
The undersigned understands that the Proposed Amendments will be adopted
with respect to the Old 8 3/4% Debentures tendered herewith only upon
consummation of the Exchange Offer with respect to such Old 8 3/4% Debentures.
The undersigned understands that tenders of Old 8 3/4% Debentures pursuant
to the procedures described in the Prospectus under the heading "The Exchange
Offers -- Procedures for Tendering Old Securities and Giving Consents" and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions
described in the Prospectus.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
6
<PAGE>
TENDERS OF OLD 8 3/4% DEBENTURES MADE PURSUANT TO THE EXCHANGE OFFER MAY
NOT BE WITHDRAWN AFTER 11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PRIOR TO SUCH TIME, THE WITHDRAWAL OF OLD 8 3/4% DEBENTURES IN ACCORDANCE WITH
THE PROCEDURES SET FORTH IN THE PROSPECTUS WILL EFFECT A REVOCATION OF THE
CONSENT WITH RESPECT TO SUCH OLD 8 3/4 DEBENTURES. ANY VALID REVOCATION OF A
CONSENT WILL RENDER THE CORRESPONDING TENDER OF OLD 8 3/4% DEBENTURES DEFECTIVE,
AND THE COMPANY WILL HAVE THE RIGHT, WHICH IT MAY WAIVE, TO REJECT SUCH TENDER.
A PURPORTED NOTICE OF WITHDRAWAL OR REVOCATION WILL BE EFFECTIVE ONLY IF
DELIVERED TO THE EXCHANGE AGENT IN ACCORDANCE WITH THE SPECIFIC PROCEDURES SET
FORTH IN THE PROSPECTUS UNDER THE HEADING "THE EXCHANGE OFFERS -- WITHDRAWAL AND
REVOCATION RIGHTS."
Please credit all New 2025 Notes issued for any Old 8 3/4% Debentures
exchanged to the DTC account of the undersigned or the undersigned's custodian
as specified in the Account Information Table above. Unless otherwise indicated
under "Special Issuance and Payment Instructions," please issue the check for
the appropriate cash consideration for any Old 8 3/4% Debentures exchanged and
issue any Old 8 3/4% Debentures not tendered or not exchanged in the name of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the appropriate cash consideration for
any Old 8 3/4% Debentures exchanged and deliver any Old 8 3/4% Debentures not
tendered or not exchanged (unless tender was effected by book-entry transfer, in
which case credit such Old 8 3/4% Debentures to the Book-Entry Transfer Facility
account from which tender was effected) to the undersigned at the address shown
below the undersigned's signature.
In the event that "Special Issuance and Payment Instructions" is completed,
please issue the check for the appropriate cash consideration for any Old 8 3/4%
Debentures exchanged and/or issue any Old 8 3/4% Debentures not tendered or not
exchanged in the name of the person so indicated. In the event that "Special
Delivery Instructions" is completed, please mail the check for the appropriate
cash consideration for any Old 8 3/4% Debentures exchanged and/or deliver any
certificates for Old 8 3/4% Debentures not tendered or not exchanged (unless
tender was effected by book-entry transfer, in which case credit such Old 8 3/4%
Debentures to the Book-Entry Transfer Facility account from which tender was
effected) to the person at the address so indicated. The undersigned recognizes
that the Company has no obligation under the "Special Issuance and Payment
Instructions" provision or the "Special Delivery Instructions" provision of this
Letter of Transmittal to effect the transfer of any Old 8 3/4% Debentures from
the name of the Record Holder (as defined below) thereof if the Company does not
accept for exchange any of the principal amount of the Old 8 3/4% Debentures
tendered pursuant to this Letter of Transmittal.
7
<PAGE>
- -------------------------------------------------------------------------------
SPECIAL ISSUANCE AND PAYMENT
INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Old 8 3/4% Debentures to be returned in the
principal amount of Old 8 3/4% Debentures not tendered or not exchanged and/or
the check for the appropriate cash consideration for any Old 8 3/4% Debentures
exchanged, are to be issued in the name of someone other than the undersigned.
Please issue (check one or both)
[_] check [_] Old 8 3/4% Debentures not tendered or not exchanged, to:
Name.........................................................................
(Please Print)
Address......................................................................
.............................................................................
.............................................................................
(Include Zip Code)
.............................................................................
(Taxpayer Identification or Social Security
Number(s)/*/ of Payee)
.............................................................................
* Please also complete the enclosed Substitute Form W-9.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Old 8 3/4% Debentures to be issued in the principal
amount of Old 8 3/4% Debentures not tendered or not exchanged and/or the check
for the appropriate cash consideration for any Old 8 3/4% Debentures exchanged,
are to be sent to someone other than the undersigned, or to the undersigned at
an address other than that shown below the undersigned's signature.
Please send (check one or both)
[_] check [_] Old 8 3/4% Debentures not tendered or not exchanged, to:
Name.........................................................................
(Please Print)
Address......................................................................
.............................................................................
.............................................................................
(Include Zip Code)
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
PLEASE COMPLETE THE SUBSTITUTE FORM W-9 ON THIS LETTER OF TRANSMITTAL)
BY SIGNING THIS LETTER OF TRANSMITTAL THE HOLDER HEREBY CONSENTS TO THE PROPOSED
AMENDMENTS.
This Letter of Transmittal and Consent must be signed by (i) the holder(s)
exactly as the name(s) appear(s) on the Old 8 3/4% Debentures or on a security
position listing with respect thereto (a person whose name so appears, a "Record
Holder") or (ii) person(s) authorized to become Record Holder(s) by Old 8 3/4%
Debentures and/or instruments of transfer transmitted herewith. If the
signature(s) appearing below is (are) not of the Record Holder(s), then the
Record Holder(s) must sign the form of Consent appearing below and provide the
necessary instruments of transfer. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, agent or
other person acting in a fiduciary or representative capacity, the line entitled
"Capacity" must be filled out. See Instruction 5.
___________________________________ ______________________________________
Signature of Owner Signature of Owner
(if more than one)
___________________________________ ______________________________________
Name of Owner (Please print) Name of Owner (if more
than one)(Please print)
Dated ______________________, 1995.
Address_________________________________________________________________________
(Please Print) (Include Zip Code)
Capacity (full title)___________________________________________________________
Taxpayer Identification Number or Social Security Number________________________
Telephone Number__________________________________
(Include Area Code)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Name of Firm ______________________ Authorized Signature ___________________
Dated ______________________, 1995.
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
CONSENT
IF THIS LETTER OF TRANSMITTAL IS SIGNED BY A HOLDER OF OLD 8 3/4% DEBENTURES WHO
IS NOT THE RECORD HOLDER, THEN THE RECORD HOLDER MUST SIGN THE FOLLOWING CONSENT
(OR A SEPARATE DOCUMENT SUBSTANTIALLY IN THE FORM OF THE FOLLOWING CONSENT,
WHICH DOCUMENT MUST BE DELIVERED TO THE EXCHANGE AGENT BEFORE 11:59 P.M., NEW
YORK CITY TIME, ON THE EXPIRATION DATE), WITH SIGNATURE GUARANTEED BY AN
ELIGIBLE INSTITUTION (AS DEFINED IN INSTRUCTION 1):
This Consent must be signed by the Record Holder(s) exactly as the name(s)
appear(s) on the Old 8 3/4% Debentures or on a security position listing respect
thereto. If the signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, the line entitled "Capacity" must be
filled out. See Instruction 5.
Pursuant to the Exchange Offer and the Company's solicitation of Consents to the
Proposed Amendments, the undersigned Record Holder(s) of the Old 8 3/4%
Debentures tendered pursuant to this Letter of Transmittal hereby consent(s) to
the Proposed Amendments.
___________________________________ _______________________________________
Signature of Record Holder Signature of Record Holder
(if more than one)
____________________________________ _______________________________________
Name of Record Holder (Please Print) Name of Record Holder
(if more than one) (Please Print)
Dated ___________________________, 1995.
Address_________________________________________________________________________
(Please Print) (Include Zip Code)
Capacity (full title)___________________________________________________________
Taxpayer Identification Number or Social Security Number________________________
Telephone Number__________________________________
(Include Area Code)
GUARANTEE OF SIGNATURE(S)
(If required -- See Instructions 1 and 5)
Name of Firm _____________________ Authorized Signature ___________________
Dated _________________________________, 1995.
- --------------------------------------------------------------------------------
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. SIGNATURE GUARANTEES. All signatures on this Letter of Transmittal must
be guaranteed by a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, including (as such terms are
defined therein): (i) a bank; (ii) a broker, dealer, municipal securities
dealer, municipal securities broker, government securities dealer or government
securities broker; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
institution that is a participant in a Securities Transfer Association
recognized program (each an "Eligible Institution"); HOWEVER NO GUARANTEE OF
SIGNATURE IS REQUIRED IF the Old 8 3/4% Debentures tendered hereby are tendered
(a) by a Record Holder who has not completed either the box entitled "Special
Issuance and Payment Instructions" or the box entitled "Special Delivery
Instructions" or (b) for the account of an Eligible Institution. If the Record
Holder of the Old 8 3/4% Debentures tendered hereby is a person other than the
signer of this Letter of Transmittal, see Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND OLD 8 3/4% DEBENTURES; ISSUANCE
OF NEW 2025 NOTES IN BOOK-ENTRY FORM. All physically tendered Old 8 3/4%
Debentures, or a confirmation of a book-entry transfer into the Exchange Agent's
account at a Book-Entry Transfer Facility of all Old 8 3/4% Debentures delivered
electronically, together with a properly completed and duly executed Letter of
Transmittal, and any other documents required by this Letter of Transmittal,
should be mailed or delivered to the Exchange Agent at its address set forth on
the front page hereof and must be received by the Exchange Agent prior to 11:59
p.m., New York City time, on the Expiration Date.
Because all New 2025 Notes will be delivered only in book-entry form
through DTC, the appropriate DTC participant name and number (along with any
other required account information) to permit such delivery must be provided in
the Account Information Table. Failure to do so will render a tender of Old 8
3/4% Debentures defective, and the Company will have the right, which it may
waive, to reject such tender. Holders who anticipate tendering by a method other
than through DTC are urged to promptly contact a bank, broker or other
--------
intermediary (that has the facility to hold securities custodially through DTC)
to arrange for receipt of any New 2025 Notes delivered pursuant to the Exchange
Offer and to obtain the information necessary to complete the Account
Information Table.
THE METHOD OF DELIVERY OF OLD 8 3/4% DEBENTURES, THIS LETTER OF TRANSMITTAL
AND ANY REQUIRED SIGNATURE GUARANTEES, INCLUDING BOOK-ENTRY DELIVERY THROUGH A
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER
AND, EXCEPT AS OTHERWISE PROVIDED IN THIS LETTER OF TRANSMITTAL, DELIVERY WILL
BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
All tendering holders, by execution of this Letter of Transmittal, waive
any right to receive any notice of the acceptance of their tender, except as
expressly provided in the Prospectus.
3. INADEQUATE SPACE. If the space provided in the Description Table is
inadequate, the numbers and principal amount of the Old 8 3/4% Debentures
tendered should be listed on a separate signed schedule and attached hereto.
4. PARTIAL TENDERS AND CONSENTS. Tenders of Old 8 3/4% Debentures will be
accepted only in integral multiples of $1,000. The aggregate principal amount
of all Old 8 3/4% Debentures delivered to the Exchange Agent will be deemed to
have been tendered and a Consent given with respect thereto unless otherwise
indicated in the Description Table. Book-entry transfers to the Exchange Agent
should be made in the exact principal amount of Old 8 3/4% Debentures tendered
and in respect of which a Consent is given. With respect to a tender of Old 8
3/4% Debentures held in physical form, if the tender is made with respect to
less than the entire principal amount of the Old 8 3/4% Debentures delivered
herewith, enter the principal amount (in integral multiples of $1,000) of the
Old 8 3/4% Debentures that are to be tendered and in respect of which a Consent
is given in the column in the Description Table entitled "Principal Amount
Tendered and in Respect of Which Consent Is Given." In such case, a new Old 8
3/4% Debenture for the principal amount of the untendered Old 8 3/4% Debentures
will be issued.
11
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS. IF
THIS LETTER OF TRANSMITTAL IS SIGNED BY A PERSON OTHER THAN THE RECORD HOLDER, A
CONSENT IN THE FORM PROVIDED IN THIS LETTER OF TRANSMITTAL MUST BE OBTAINED FROM
THE RECORD HOLDER WITH THE SIGNATURE GUARANTEED.
If this Letter of Transmittal is signed by the Record Holder(s) of the Old
8 3/4% Debentures tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the Old 8 3/4% Debentures or on a security
position listing with respect thereto without any change whatsoever. If any of
the tendered Old 8 3/4% Debentures are held by two or more Record Holders, all
such persons must sign this Letter of Transmittal. If any of the tendered Old 8
3/4% Debentures are registered in different names, it will be necessary to
complete, sign and submit as many separate Letters of Transmittal as there are
different registrations.
If this Letter of Transmittal is signed by the Record Holder(s) of the Old
8 3/4% Debentures tendered and if any Old 8 3/4% Debentures not tendered or not
exchanged are to be returned to the undersigned, then no endorsements of Old 8
3/4% Debentures or separate bond powers or other instruments of transfer are
required to effect a valid tender. If the Letter of Transmittal is signed by
someone other than the Record Holder or if any Old 8 3/4% Debentures not
tendered or not exchanged are to be returned to someone other than the
undersigned, then endorsement of the Old 8 3/4% Debentures or separate bond
powers or other instruments of transfer will be required to effect a valid
tender. Signatures on any such Old 8 3/4% Debentures or bond powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal, any Consent or any Old 8 3/4% Debentures or
bond powers or other instruments of transfer are signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, agent or
other person(s) acting in a fiduciary or representative capacity, such person
(s) should so indicate when signing and must submit proper evidence satisfactory
to the Exchange Agent of their authority so to act.
6. TRANSFER TAXES. The Company will pay or cause to be paid security
transfer taxes, if any, with respect to the sale and transfer of any Old 8 3/4%
Debentures to it pursuant to the Exchange Offer. If, however, payment of the
appropriate cash consideration for any Old 8 3/4% Debentures is to be made to,
or Old 8 3/4% Debentures not tendered or not accepted for exchange are to be
issued to or returned in the name of, any person other than the Record
Holder(s), the amount of any security transfer taxes (whether imposed on the
Record Holder(s), such other person or otherwise) payable on account of the
payment or transfer to such person will be billed directly to the tendering
holder and/or deducted from any payments due with respect to the tendered Old 8
3/4% Debentures unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted.
7. SPECIAL ISSUANCE AND PAYMENT AND DELIVERY INSTRUCTIONS. If Old 8 3/4%
Debentures representing the aggregate principal amount of Old 8 3/4% Debentures
not tendered or not exchanged under the Exchange Offer and/or checks for cash
consideration for any Old 8 3/4% Debentures exchanged, are to be issued in the
name of a person other than the undersigned, or if such Old 8 3/4% Debentures
and/or checks are to be sent to someone other than the undersigned or to the
undersigned at a different address than that appearing below the signature of
the undersigned in the signature box above, the boxes entitled "Special Issuance
and Payment Instructions" and "Special Delivery Instructions" in this Letter of
Transmittal must be completed as appropriate. Regardless of any information
appearing in "Special Issuance and Payment Instructions" or "Special Delivery
Instructions", all New 2025 Notes will be delivered only in book-entry form
through DTC and only to the DTC account of the undersigned or the undersigned's
custodian.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or additional copies of the Prospectus or this Letter of Transmittal should be
directed to the Information Agent at the address and telephone number set forth
on the back cover page hereof and on the back cover page of the Prospectus.
9. SUBSTITUTE FORM W-9. A tendering holder (or other payee) generally is
required to provide the Exchange Agent with a correct taxpayer identification
number ("TIN") on the Substitute Form W-9 that is provided on the back cover
page and to certify that it is not subject to backup withholding. Failure to
provide the information on the form may subject the tendering
12
<PAGE>
holder (or other payee) to 31% federal backup withholding tax on the payments
made to such person, unless such person otherwise establishes an exemption from
backup withholding tax.
IMPORTANT: THIS LETTER OF TRANSMITTAL TOGETHER WITH THE OLD 8 3/4%
DEBENTURES TENDERED AND ANY OTHER DOCUMENTS REQUIRED BY THIS LETTER OF
TRANSMITTAL MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 11:59 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH HOLDER IS URGED TO CONSULT A TAX ADVISOR TO DETERMINE
THE PARTICULAR TAX CONSEQUENCES TO IT (INCLUDING THE APPLICATION AND EFFECT OF
FOREIGN, STATE AND LOCAL TAX LAWS) OF THE OFFER. CERTAIN HOLDERS (INCLUDING
INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FOREIGN TAXPAYERS) MAY BE
SUBJECT TO SPECIAL RULES NOT DISCUSSED BELOW. THE DISCUSSION DOES NOT CONSIDER
THE EFFECT OF ANY APPLICABLE FOREIGN, STATE AND LOCAL TAX LAWS.
SUBSTITUTE FORM W-9
Under the federal income tax laws backup withholding at a rate of 31% may
be required with respect to payments of interest or redemption proceeds made to
certain holders pursuant to the Exchange Offer or the terms of the New 2025
Notes. In order to avoid such backup withholding, each tendering holder must
provide the Exchange Agent with such holder's correct TIN by completing the
Substitute Form W-9 set forth below. In general, if a holder is an individual,
the TIN is the Social Security number of such individual. If the Exchange Agent
is not provided with the correct TIN, the holder may be subject to a penalty
imposed by the Internal Revenue Service.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that holder must submit a statement signed under penalty of perjury
attesting as to that status. Forms for such statement can be obtained from the
Exchange Agent.
CONSEQUENCES OF FAILURE TO COMPLETE SUBSTITUTE FORM W-9
Failure to complete Substitute Form W-9 will not, by itself, cause the Old
8 3/4% Debentures to be deemed invalidly tendered but may require the Exchange
Agent to withhold 31% of the amount of any payments made pursuant to the
Exchange Offer. Backup withholding is not an additional federal income tax.
Rather, the federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, the holder may claim a refund from the
Internal Revenue Service.
13
<PAGE>
- --------------------------------------------------------------------------------
PAYER'S NAME: CHEMICAL BANK
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Social Security Number
SUBSTITUTE
FORM W-9 PART I -- PLEASE PROVIDE YOUR
TAXPAYER IDENTIFICATION NUMBER IN or
THE BOX AT THE RIGHT AND CERTIFY
BY SIGNING AND DATING BELOW
DEPARTMENT OF THE TREASURY Employer Identification Number
INTERNAL REVENUE SERVICE ______________________________________________
(if awaiting TIN write "Applied For")
PAYER'S REQUEST FOR --------------------------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION PART II -- For Payees exempt from backup withholding, see the Important Tax Information above and
NUMBER (TIN) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
enclosed herewith and complete as instructed therein.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Certifications - Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or a Taxpayer Identification Number has not been issued to me and either
(a) I have mailed or delivered an application to receive a Taxpayer
Identification Number to the appropriate Internal Tax Revenue Service
Center or Social Security Administration office or (b) I intend to mail or
deliver an application in the near future). (I understand that if I do not
provide a Taxpayer Identification Number to the payer, 31% of all
reportable payments made to me thereafter will be withheld until I provide
a number to the payer and that, if I do not provide my Taxpayer
Identification Number within sixty (60) days, such retained amounts shall
be remitted to the Internal Revenue Service ("IRS") as backup withholding.
(2) I am not subject to backup withholding either because I have not been
notified by the IRS that I am subject to backup withholding as a result of
a failure to report all interest or dividends or the IRS has notified me
that I am no longer subject to backup withholding.
Certification Instruction - You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you
were subject to withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2).
(Also see the IMPORTANT TAX INFORMATION above.)
- --------------------------------------------------------------------------------
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Signature_____________________________________________________ Date __________
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
14
<PAGE>
The Dealer Manager for the Exchange Offers is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10006
Telephone: (800) 558-3745 (toll free)
Telephone: (212) 783-3738 (call collect)
Attention: Liability Management Group
Any questions concerning the terms of the Exchange Offers
may be directed to the Dealer Manager.
The Information Agent for the Exchange Offer is:
D.F. KING & CO. INC.
99 Water Street
New York, New York 10005
Telephone: (800) 829-6554
Any questions concerning the completion of this form,
tender procedures or requests
for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Information Agent.
