-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, RrW9M1699J9ZLk0oSYiGJqipYXB57Vpopwf1MTlD+YMTn9RIWPqX2fAiDuJh8uXS wTvkySK1Tl3qKMAWmtckbA== 0000950109-95-001510.txt : 19950501 0000950109-95-001510.hdr.sgml : 19950501 ACCESSION NUMBER: 0000950109-95-001510 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 19950428 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA HCA HEALTHCARE CORP/ CENTRAL INDEX KEY: 0000860730 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-GENERAL MEDICAL & SURGICAL HOSPITALS, NEC [8062] IRS NUMBER: 752497104 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58919 FILM NUMBER: 95532724 BUSINESS ADDRESS: STREET 1: 201 WEST MAIN STREET CITY: LOUISVILLE STATE: KY ZIP: 40202- BUSINESS PHONE: (502)-572- FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA HEALTHCARE CORP DATE OF NAME CHANGE: 19930830 FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA HOSPITAL CORP DATE OF NAME CHANGE: 19930328 S-4 1 FORM S-4 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 - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
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) - --------------------------------------------------------------------------------------------- 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 - --------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------
(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. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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
S-4 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROSPECTUS --------------------------- --------------------------------- 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.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +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. 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 (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 TABLE OF CONTENTS
PAGE ---- 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
iii 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 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 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 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 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 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 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 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 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 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 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 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."
OLD SECURITIES NEW SECURITIES -------------- -------------- 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.
12
OLD SECURITIES NEW SECURITIES -------------- -------------- 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.
13 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)
AS OF AND FOR THE YEARS ENDED DECEMBER 31, ----------------------------------------------------- 1994 1993 1992 1991 1990 --------- --------- --------- --------- --------- 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
- ------- (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 COLUMBIA/HCA HEALTHCARE CORPORATION SUPPLEMENTAL COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED) (DOLLARS IN MILLIONS)
YEARS ENDED DECEMBER 31, ---------------------------------- 1994 1993 1992 1991 1990 ------ ------ ------ ------ ------ 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
- ------- (a) One-third of rent expense is considered representative of the underlying interest. 15 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)
AS OF AND FOR THE YEARS ENDED DECEMBER 31, ----------------------------------------------------- 1994 1993 1992 1991 1990 --------- --------- --------- --------- --------- 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%
- -------- (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 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)
FOR THE SIX MONTHS ENDED FEBRUARY 28, -------------------- 1995(A) 1994 ---------- --------- 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 FEBRUARY 28, 1995(A) ------------ 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 FOR THE SIX MONTHS ENDED FEBRUARY 28, -------------------- 1995(A) 1994 ---------- --------- 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% FOR THE YEARS ENDED AUGUST 31, --------------------------------------------------- 1994(A) 1993 1992 1991 1990 ---------- ---------- ---------- -------- --------- 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) AUGUST 31, --------------------------------------------------- 1994(A) 1993 1992 1991 1990 ---------- ---------- ---------- -------- --------- 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 FOR THE YEARS ENDED AUGUST 31, --------------------------------------------------- 1994(A) 1993 1992 1991 1990 ---------- ---------- ---------- -------- --------- 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%
- ------- (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 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 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 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 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 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 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 FOR ILLUSTRATIVE PURPOSES ONLY
BENCHMARK TREASURY YIELD FIXED REFERENCE CASH ISSUE AS OF / /95 SPREAD REFERENCE YIELD TOTAL PRICE CONSIDERATION ----- -------------- ------ --------------- ----------- ------------- Old 10 3/4% Notes....... % % % $ $ Old 10 1/4% Notes....... % % % $ $ Old 8 3/4% Debentures... % % % $ $
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
HYPOTHETICAL BENCHMARK ISSUE TREASURY YIELD REFERENCE YIELD CASH CONSIDERATION ----- ---------------------- --------------- ------------------ Old 10 3/4% Notes....... % % $ % % $ % % $ % % $ % % $ Old 10 1/4% Notes....... % % $ % % $ % % $ % % $ % % $ Old 8 3/4% Debentures... % % $ % % $ % % $ % % $ % % $
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
BENCHMARK TREASURY YIELD ISSUE AS OF / /95 FIXED SPREAD INTEREST RATE ----- ------------------------ ------------ ------------- New 2005 Notes............. % % % New 2000 Notes............. % % % New 2025 Notes............. % % %
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 FOR ILLUSTRATIVE PURPOSES ONLY
HYPOTHETICAL BENCHMARK ISSUE TREASURY YIELD INTEREST RATE ----- ---------------------- ------------- New 2005 Notes............................ % % % % % % % % New 2000 Notes............................ % % % % % % % % New 2025 Notes............................ % % % % % % % %
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 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 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 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 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 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. 30 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 31 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 32 (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. 33 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. 34 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." 35 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.
OLD 10 3/4% NOTES HIGH LOW - ----------------- -------- -------- 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 OLD 8 3/4% DEBENTURES HIGH LOW - --------------------- -------- -------- 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
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. 36 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 37 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. 38 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. 39 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: 40 "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. 41 "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 42 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 43 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 44 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 45 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. 46 "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." 47 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) %. 48 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 49 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. 50 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 51 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." 52 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 53 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 54 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 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 - - 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.
OLD 10 OLD 10 OLD 8 3/4% NOTES 1/4% NOTES 3/4% DEBENTURES ---------- ---------- --------------- 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
- -------- (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. 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 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 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).
- -------- * filed herewith ** previously filed II-1 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.
(b) Financial Schedules. Not applicable. (c) Opinions of Financial Advisors. Not applicable. - -------- * filed herewith ** previously filed II-2 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 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 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 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 EXHIBIT INDEX
EXHIBITS PAGE NO. NO. -------- ---- 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).
- -------- * filed herewith ** previously filed EX-1 2 DEALER MANAGER AGREEMENT 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 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 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. 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. 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 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 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. 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. 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 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 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 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 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 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. 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 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. 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 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. 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 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 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: --------------------- -------------------------------------- EX-4.4 3 FORM OF SUPP INDENT 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. 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 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 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 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 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 EX-4.5 4 FORM OF SUPP INDENT 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. 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 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 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 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 EX-4.6 5 FORM OF 2ND SUPP. INDENT 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; 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 2 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 3 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. 4 "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. 5 "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 6 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". 7 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." 8 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 9 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 10 168(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) 11 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; 12 (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); 13 (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. 14 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 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 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 EX-4.7 6 FORM OF 2ND SUPP. INDENT 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 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 2 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 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 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 "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 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 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 (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 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 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 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, 12 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 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 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 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 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 EX-4.8 7 RESOLUTIONS OF BD 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 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 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 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 /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 EX-5 8 OPINION OF S.T. BRAUN 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. 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 EX-12.3 9 STATEMENT REGARDING COMPUTATION Exhibit 12.3 HEALTHRUST, INC. THE HOSPITAL COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (dollars in millions)
FOR THE SIX MONTHS ENDED FEBRUARY 28, FOR THE YEARS ENDED AUGUST 31, --------------- -------------------------------------------- 1995 1994 1994 1993 1992 1991 1990 ---- ----- ---- ---- ---- ---- ---- 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.
EX-23.1 10 CONSENT OF ERNST & YOUNG 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 EX-23.2 11 CONSENT OF ERNST & YOUNG 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 EX-99.1 12 L-T & CONSENT [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
By Mail: Overnight or Hand Delivery: Facsimile Transmission: 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
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. 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 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 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- DESCRIPTION OF OLD 10 3/4% NOTES TENDERED AND IN RESPECT OF WHICH CONSENT IS GIVEN (SEE INSTRUCTIONS 3 AND 4) - --------------------------------------------------------------------------------
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) ---------------------------------------------------------------------------------------------- ______________________________________________________________________________________________ ______________________________________________________________________________________________ ______________________________________________________________________________________________ ______________________________________________________________________________________________ ______________________________________________________________________________________________ Total - ------------------------------------------------------------------------------------------------------------------------------------
* 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 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 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 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 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 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 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 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 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 - -------------------------------------------------------------------------------- PAYER'S NAME: CHEMICAL BANK - -------------------------------------------------------------------------------- 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. - ------------------------------------------------------------------------------------------------------------------------------------
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 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. EX-99.2 13 L-T & CONSENT [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
By Mail: Overnight or Hand Delivery: Facsimile Transmission: 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
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. 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 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 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- DESCRIPTION OF OLD 10 1/4% NOTES TENDERED AND IN RESPECT OF WHICH CONSENT IS GIVEN (SEE INSTRUCTIONS 3 AND 4) - --------------------------------------------------------------------------------
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) -------------------------------------------------------------------------------------- ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ TOTAL - ------------------------------------------------------------------------------------------------------------------------------------
* 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 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 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 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 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 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 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 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 - ------------------------------------------------------------------------------- PAYER'S NAME: CHEMICAL BANK - ------------------------------------------------------------------------------- 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. - ------------------------------------------------------------------------------------------------------------------------------------
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 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. EX-99.3 14 L-T & CONSENT [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
By Mail: Overnight or Hand Delivery: Facsimile Transmission: 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
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. 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 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 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- DESCRIPTION OF OLD 8 3/4% DEBENTURES TENDERED AND IN RESPECT OF WHICH CONSENT IS GIVEN (SEE INSTRUCTIONS 3 AND 4) - -------------------------------------------------------------------------------
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) ------------------------------------------------------------------------ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ Total - --------------------------------------------------------------------------------------------------------------------
* 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 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 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 - ------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- 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 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 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 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 - -------------------------------------------------------------------------------- PAYER'S NAME: CHEMICAL BANK - -------------------------------------------------------------------------------- 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. - ------------------------------------------------------------------------------------------------------------------------------------
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 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. -----END PRIVACY-ENHANCED MESSAGE-----