Document:

Exhibit 4.2

 

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT dated March 11, 2014 (this “Agreement”) is entered into by and among Select Medical Corporation, a Delaware corporation (the “Company”), the guarantors listed in Schedule 1 hereto (the “Initial Guarantors”), and J.P. Morgan Securities LLC (“J.P. Morgan”), on behalf of itself and the other initial purchasers listed on Schedule I of the Purchase Agreement (as defined below) (collectively, the “Initial Purchasers”).

 

The Company, the Initial Guarantors and J.P. Morgan, as representative of the Initial Purchasers (the “Representative”) are parties to the Purchase Agreement dated March 6, 2014 (the “Purchase Agreement”), which provides for the sale by the Company to the Initial Purchasers of $110,000,000 aggregate principal amount of the Company’s 6.375% Senior Notes due 2021 (the “Securities”) which will be guaranteed on an unsecured senior basis by each of the Guarantors.  As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement.  The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement.

 

In consideration of the foregoing, the parties hereto agree as follows:

 

1.                                      Definitions.  As used in this Agreement, the following terms shall have the following meanings:

 

“Additional Guarantor” shall mean any subsidiary of the Company that executes a Guarantee under the Indenture after the date of this Agreement.

 

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

 

“Company” shall have the meaning set forth in the preamble and shall also include the Company’s successors.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

“Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

 

“Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration” shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof.

 

“Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

 

“Exchange Securities” shall mean senior notes issued by the Company and guaranteed by the Guarantors under the Indenture containing terms identical to the Securities (except that the Exchange Securities will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to

 

 

comply with this Agreement) and to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“Free Writing Prospectus” means each free writing prospectus (as defined in Rule 405 under the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the sale of the Securities or the Exchange Securities.

 

“Guarantees” shall mean the guarantees of the Securities and guarantees of the Exchange Securities by the Guarantors under the Indenture.

 

“Guarantors” shall mean the Initial Guarantors, any Additional Guarantors and any Guarantor’s successor that Guarantees the Securities.

 

“Holders” shall mean the Initial Purchasers, for so long as they own any Registrable Securities, and each of their successors, assigns and direct and indirect transferees who become owners of Registrable Securities under the Indenture; provided that, for purposes of Section 4 and Section 5 hereof, the term “Holders” shall include Participating Broker-Dealers.

 

“Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.

 

“Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.

 

“Indenture” shall mean the Indenture relating to the Securities, dated as of May 28, 2013 (the “Base Indenture”), among the Company, the Guarantors and U.S. Bank National Association, as trustee, as supplemented by the Supplemental Indenture, as may be further amended from time to time in accordance with the terms thereof.

 

“Initial Purchasers” shall have the meaning set forth in the preamble.

 

“Inspector” shall have the meaning set forth in Section 3(a)(xiv) hereof.

 

“Issuer Information” shall have the meaning set forth in Section 5(a) hereof.

 

“J.P. Morgan” shall have the meaning set forth in the preamble.

 

“Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of the outstanding Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, any Registrable Securities owned directly or indirectly by the Company or any of its affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount; and provided, further, that if the Company shall issue any additional Securities under the Indenture prior to consummation of the Exchange Offer or, if applicable, the effectiveness of any Shelf Registration Statement, such additional Securities and the Registrable Securities to which this Agreement relates shall be treated together as one class for purposes of determining whether the consent or approval of Holders of a specified percentage of Registrable Securities has been obtained.

 

“Notice and Questionnaire” shall mean a notice of registration statement and selling security holder questionnaire distributed to a Holder by the Company upon receipt of a Shelf Request from such Holder.

 

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“Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

 

“Participating Holder” shall mean any Holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 2(b) hereof.

 

“Person” shall mean an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

 

“Prospectus” shall mean the prospectus included in, or, pursuant to the rules and regulations of the Securities Act, deemed a part of, a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including any document incorporated by reference therein.

 

“Purchase Agreement” shall have the meaning set forth in the preamble.

 

“Registrable Securities” shall mean the Securities; provided that the Securities shall cease to be Registrable Securities (i) when a Registration Statement with respect to such Securities has become effective under the Securities Act and such Securities have been exchanged or disposed of pursuant to such Registration Statement, (ii) when such Securities cease to be outstanding or (iii) except in the case of Securities that otherwise remain Registrable Securities and that are held by an Initial Purchaser and that are ineligible to be exchanged in the Exchange Offer, when the Exchange Offer is consummated.

 

“Registration Actions” shall have the meaning set forth in Section 2(d) hereof.

 

“Registration Default” shall mean the occurrence of any of the following: (i) the Company and the Guarantors fail to file the Exchange Offer Registration Statement on or before the 150th day after the Closing Date or fail to file the Shelf Registration Statement on or prior to the later of the 270th day after the Closing Date and 120 days after the obligation to file the Shelf Registration Statement arises under Section 2, (ii) the Exchange Offer Registration Statement is not declared effective on or prior to the 240th day after the Closing Date or the Shelf Registration Statement is not declared effective on or before the 210th day after the filing of the Shelf Registration Statement, (iii) the Exchange Offer is not consummated on or prior to the 300th day after the Closing Date and the Shelf Registration Statement is not declared effective by the Commission on or prior to the 210th day after the filing of the Shelf Registration Statement, or (iv) the Shelf Registration Statement is filed and declared effective within the time periods required by Section 2 but, thereafter ceases to be effective or available for the Holders of Registrable Securities in connection with the offer and sale of such Registrable Securities during the period that the Company and the Guarantors are obligated to maintain the effectiveness thereof (unless such Shelf Registration Statement is succeeded by another Shelf Registration Statement filed and declared effective within 30 days of the date such Shelf Registration Statement ceased to be effective or such Shelf Registration Statement otherwise becomes available again within 30 days (so long as the aggregate number of days for which a Shelf Registration Statement has not been effective and available for the Holders of Registrable Securities to offer and sell such Registrable Securities does not exceed 45 days within any 90 day period or 60 days within any 12-month period).

 

“Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Company and the Guarantors with this Agreement, including without limitation: (i) all SEC, stock exchange or FINRA registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of one counsel (in addition to any local counsel) for any Underwriters or Holders in connection with blue

 

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sky qualification of any Exchange Securities or Registrable Securities), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any Free Writing Prospectus and any amendments or supplements thereto, any underwriting agreements, securities sales agreements or other similar agreements and any other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vi) the reasonable fees and disbursements of the Trustee and its counsel, (vii) the fees and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf Registration Statement, the reasonable fees and disbursements of one counsel for the Participating Holders (which counsel shall be selected by the Participating Holders holding a majority of the aggregate principal amount of Registrable Securities held by such Participating Holders and which counsel may also be counsel for the Initial Purchasers) and (viii) the fees and disbursements of the independent registered public accountants of the Company and the Guarantors, including the expenses of any special audits or “comfort” letters required by or incident to the performance of and compliance with this Agreement, but excluding fees and expenses of counsel to the Underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

 

“Registration Statement” shall mean any registration statement of the Company and the Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

 

“SEC” shall mean the United States Securities and Exchange Commission.

 

“Securities” shall have the meaning set forth in the preamble.

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

“Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

 

“Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

 

“Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and the Guarantors that covers all or a portion of the Registrable Securities (but no other securities unless approved by a majority in aggregate principal amount of the Securities held by the Participating Holders) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

 

“Shelf Request” shall have the meaning set forth in Section 2(b) hereof.

 

“Staff” shall mean the staff of the SEC.

 

“Supplemental Indenture” shall mean the Supplemental Indenture relating to the Securities dated as of March 11, 2014, among the Company, the Guarantors and U.S. Bank National Association, as trustee.

 

“Suspension Notice” shall have the meaning set forth in Section 2(d) hereof.

 

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“Suspension Period” shall have the meaning set forth in Section 2(d) hereof.

 

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended from time to time.

 

“Trustee” shall mean the trustee with respect to the Securities under the Indenture.

 

“Underwriter” shall have the meaning set forth in Section 3(e) hereof.

 

“Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an Underwriter for reoffering to the public.

 

2.                                      Registration Under the Securities Act.

 

(a)                                 To the extent not prohibited by any applicable law or applicable interpretations of the Staff, the Company and the Guarantors shall (i) prepare and, not later than 150 days following the date hereof (the “Closing Date”), file with the SEC the Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Registrable Securities for Exchange Securities, (ii) use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act no later than 240 days after the Closing Date and the Exchange Offer to be consummated no later than 270 days after the Closing Date and (iii) use commercially reasonable efforts to keep the Exchange Offer Registration Statement effective for not less than 30 days (or longer, if required by applicable law) after the date on which notice of the Exchange Offer is mailed to the Holders.

 

The Company and the Guarantors shall commence the Exchange Offer by mailing the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law, substantially the following:

 

(i)                  that the Exchange Offer is being made pursuant to this Agreement and that all Registrable Securities validly tendered and not properly withdrawn will be accepted for exchange;

 

(ii)               the dates of acceptance for exchange (which shall be a period of at least 30 Business Days from the date such notice is mailed) (the “Exchange Dates”);

 

(iii)            that any Registrable Security not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement, except as otherwise specified herein;

 

(iv)           that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to (A) surrender such Registrable Security, together with the appropriate letters of transmittal, to the institution and at the address and in the manner specified in the notice, or (B) effect such exchange otherwise in compliance with the applicable procedures of the depositary for such Registrable Security, in each case prior to the close of business on the last Exchange Date; and

 

(v)              that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by (A) sending to the institution and at the address specified in the notice, a telegram, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing its election to have such Securities exchanged or (B) effecting such

 

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withdrawal in compliance with the applicable procedures of the depositary for the Registrable Securities.

 

As a condition to participating in the Exchange Offer, a Holder will be required to represent to the Company and the Guarantors that (1) any Exchange Securities to be received by it will be acquired in the ordinary course of its business, (2) at the time of the commencement of the Exchange Offer it has no arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act, (3) it is not an “affiliate” (within the meaning of Rule 405 under the Securities Act) of the Company or any Guarantor and (4) if such Holder is a broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable Securities that were acquired as a result of market-making or other trading activities, then such Holder will deliver a Prospectus (or, to the extent permitted by law, make available a Prospectus to purchasers) in connection with any resale of such Exchange Securities.

 

As soon as practicable after the last Exchange Date, the Company and the Guarantors shall:

 

(I)                                   accept for exchange Registrable Securities or portions thereof validly tendered and not properly withdrawn pursuant to the Exchange Offer; and

 

(II)                                   deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee to promptly authenticate and deliver to each Holder, Exchange Securities equal in principal amount to the principal amount of the Registrable Securities tendered by such Holder.

 

The Company and the Guarantors shall use their commercially reasonable efforts to complete the Exchange Offer as provided above and shall comply with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws and regulations in connection with the Exchange Offer.  The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate any applicable law or applicable interpretations of the Staff.

 

(b)                                 In the event that (i) the Company and the Guarantors determine that the Exchange Offer Registration provided for in Section 2(a) hereof is not available or the Exchange Offer may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law or applicable interpretations of the Staff, (ii) the Exchange Offer is not for any other reason consummated prior to the later of (x) the 60th day following the effectiveness of the Exchange Offer Registration Statement and (y) the 270th day after the Closing Date, or (iii) prior to the 30th day following completion of the Exchange Offer, any Initial Purchaser so requests in writing with respect to Registrable Securities not eligible to be exchanged for Exchange Securities in the Exchange Offer and held by it following the consummation of the Exchange Offer or a broker-dealer notifies us that it holds Securities acquired directly from the Company or an Affiliate of the Company, or (iv) prior to the 30th day following completion of the Exchange Offer, any Holder notifies us that, due to any change or development in law, rules, regulations or SEC policy, (A) such Holder is not permitted to participate in the Exchange Offer or (B) such Holder will not receive freely transferable Exchange Securities in exchange for tendered Registrable Securities (it being understood that a requirement that a Holder deliver the prospectus contained in the Exchange Offer Registration Statement in connection with the sale of Exchange Securities shall not result in such Exchange Securities being not “freely transferable”), then the Company and the Guarantors shall use their commercially reasonable efforts to file prior to the later of (i) 270 days after the Closing Date and (ii) 120 days after the obligation to file arises pursuant to this Section 2(b), and thereafter shall use their commercially reasonable efforts to cause to be declared effective as promptly as practical on or prior to 210 days after such filing, a Shelf Registration Statement;  provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Registrable Securities or the Exchange Securities held by

 

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it covered by the Shelf Registration Statement until such Holder shall have delivered a complete and signed Notice and Questionnaire and provided such other information regarding such Holder to the Company as is contemplated by Section 3(b) hereof.  In the event that the Company and the Guarantors are required to file a Shelf Registration Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall use their commercially reasonable efforts to file and have become effective both an Exchange Offer Registration Statement pursuant to Section 2(a) hereof with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Initial Purchasers after completion of the Exchange Offer.

 

Subject to the third paragraph of Section 2(d) hereof, the Company and the Guarantors agree to use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended until the second anniversary of the Closing Date or such shorter period that will terminate when all the Transfer Restricted Securities covered by the Shelf Registration Statement have been sold pursuant thereto (the “Shelf Effectiveness Period”).  The Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement, the related Prospectus and any Free Writing Prospectus if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder or if reasonably requested by a Holder of Registrable Securities with respect to information relating to such Holder, and to use their commercially reasonable efforts to cause any such amendment to become effective, if required, and such Shelf Registration Statement, Prospectus or Free Writing Prospectus, as the case may be, to become usable as soon as thereafter practicable.  The Company and the Guarantors agree to furnish to the Participating Holders copies of any such supplement or amendment promptly after its being used or filed with the SEC.

 

(c)                                  The Company and the Guarantors shall pay all Registration Expenses in connection with any registration pursuant to Section 2(a) or Section 2(b) hereof.  Each Holder shall pay all underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement and any fees and disbursements of counsel not included in the definition of Registration Expenses and paid for by the Company and Guarantors in accordance with this Agreement.

 

(d)                                 An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be deemed to have become effective unless it has been declared effective by the SEC.  A Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC or is automatically effective upon filing with the SEC as provided by Rule 462 under the Securities Act.

 

If a Registration Default occurs, the interest rate on the Registrable Securities will be increased by (i) 0.25% per annum for the first 90-day period beginning on the day immediately following such Registration Default and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until and including the date such Registration Default ends, up to a maximum aggregate increase of 1.00% per annum.  A Registration Default ends when the Securities cease to be Registrable Securities or, if earlier, (1) in the case of a Registration Default under clause (i) of the definition thereof, when the Exchange Offer is completed, (2) in the case of a Registration Default under clause (ii) or clause (iii) of the definition thereof, when the Shelf Registration Statement becomes effective or (3) in the case of a Registration Default under clause (iv) of the definition thereof, when the Shelf Registration Statement again becomes effective or the Prospectus again becomes usable.  If at any time more than one Registration Default has occurred and is continuing, then, until the next date that there is no Registration Default, the increase in interest rate provided for by this paragraph shall apply as if there occurred a single

 

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Registration Default that begins on the date that the earliest such Registration Default occurred and ends on such next date that there is no Registration Default.

 

Subject to the limitation set forth in the immediately succeeding paragraph and subject to the provisions of Section 3 of this Agreement, the Company shall be entitled to delay the initial filing of the Shelf Registration Statement, suspend its obligation to file any amendment to the Shelf Registration Statement, furnish any supplement or amendment to a Prospectus included in the Shelf Registration Statement, make any other filing with the SEC that would be incorporated by reference into the Shelf Registration Statement, cause the Shelf Registration Statement to remain effective or take any similar action (collectively, “Registration Actions”) if there is a possible acquisition or business combination or other transaction, business development or event involving the Company, the Guarantors or any of their subsidiaries that, upon the advice of counsel, would require disclosure in the Shelf Registration Statement and the Company determines in the exercise of its good faith judgment and not for the purpose of avoidance of its obligations under this Agreement that such disclosure is not in the best interest of the Company and its stockholders or obtaining any financial statements relating to any such acquisition or business combination required to be included in the Shelf Registration Statement would be impracticable or upon any event described in Section 3(a)(vi)(5). Upon the occurrence of any of the conditions described in the foregoing sentence, the Company shall give prompt notice (a “Suspension Notice”) thereof to the Holders. Upon the termination of such condition, the Company shall give prompt notice thereof to the Holders and shall promptly proceed with all Registration Actions that were suspended pursuant to this paragraph.

 

The Company may suspend Registration Actions pursuant to the preceding paragraph for one or more periods (each, a “Suspension Period”) not to exceed 90 days in the aggregate during any 365-day period. Each Suspension Period shall be deemed to begin on the date the relevant Suspension Notice is given to the Holders and shall end on the date on which the Company gives the Holders a notice that the Suspension Period has terminated.  The Company shall extend the Shelf Effectiveness Period by the total number of days during which a Suspension Period was in effect, so long as there are Registrable Securities outstanding.  Notwithstanding anything to the foregoing, the Company shall at all times use its commercially reasonable efforts to end any Suspension Period at the earliest possible time.

 

(e)                                  Without limiting the remedies available to the Initial Purchasers and the Holders, the Company and the Guarantors acknowledge that any failure by the Company or the Guarantors to comply with their obligations under Section 2(a) and Section 2(b) hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company’s and the Guarantors’ obligations under Section 2(a) and Section 2(b) hereof; provided, however, that the obligation of the Company and Guarantors to pay the additional interest set forth in Section 2(d) shall be the sole and exclusive remedy, monetary or otherwise, with respect to a Registration Default.

 

3.                                      Registration Procedures.

 

(a)                                 In connection with their obligations pursuant to Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall as expeditiously as possible:

 

(i)                  prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (A) shall be selected by the Company and the Guarantors, (B) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the Holders thereof and (C) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; and use their commercially reasonable efforts to cause such Registration Statement to

 

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become effective and remain effective for the applicable period in accordance with Section 2 hereof;

 

(ii)               prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act; and keep each Prospectus current during the period described in Section 4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or dealers with respect to the Registrable Securities or Exchange Securities;

 

(iii)            to the extent any Free Writing Prospectus is used, file with the SEC any Free Writing Prospectus that is required to be filed by the Company or the Guarantors with the SEC in accordance with the Securities Act and to retain any Free Writing Prospectus not required to be filed;

 

(iv)           in the case of a Shelf Registration, furnish to each Participating Holder, to counsel for the Initial Purchasers, to counsel for such Participating Holders and to each Underwriter of an Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, preliminary prospectus or Free Writing Prospectus, and any amendment or supplement thereto, as such Participating Holder, counsel or Underwriter may reasonably request in order to facilitate the sale or other disposition of the Registrable Securities thereunder; and, subject to Section 3(c) hereof, the Company and the Guarantors consent to the use of such Prospectus, preliminary prospectus or such Free Writing Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the Participating Holders and any such Underwriters in connection with the offering and sale of the Registrable Securities covered by and in the manner described in such Prospectus, preliminary prospectus or such Free Writing Prospectus or any amendment or supplement thereto in accordance with applicable law;

 

(v)              use their commercially reasonable efforts to register or qualify the Registrable Securities under all applicable state securities or blue sky laws of such jurisdictions as any Participating Holder shall reasonably request in writing by the time the applicable Registration Statement becomes effective; cooperate with such Participating Holders in connection with any filings required to be made with FINRA; and do any and all other acts and things that may be reasonably necessary or advisable to enable each Participating Holder to complete the disposition in each such jurisdiction of the Registrable Securities owned by such Participating Holder; provided that neither the Company nor any Guarantor shall be required to (1) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (2) file any general consent to service of process in any such jurisdiction or (3) subject itself to taxation in any such jurisdiction if it is not so subject;

 

(vi)           notify counsel for the Initial Purchasers and, in the case of a Shelf Registration, notify each Participating Holder and counsel for such Participating Holders promptly and, if requested by any such Participating Holder or counsel, confirm such advice in writing (1) when a Registration Statement has become effective, when any post-effective amendment thereto has been filed and becomes effective, when any Free Writing Prospectus has been filed or any amendment or supplement to the Prospectus or any Free Writing Prospectus has been filed, (2) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement, Prospectus or any Free Writing Prospectus or for additional information after the Registration Statement has become effective, (3) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or

 

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the initiation of any proceedings for that purpose, including the receipt by the Company of any notice of objection of the SEC to the use of a Shelf Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act, (4) if, between the applicable effective date of a Shelf Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company or any Guarantor contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to an offering of such Registrable Securities cease to be true and correct in all material respects or if the Company or any Guarantor receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (5) of the happening of any event during the period a Registration Statement is effective that makes any statement made in such Registration Statement or the related Prospectus or any Free Writing Prospectus untrue in any material respect or that requires the making of any changes in such Registration Statement or Prospectus or any Free Writing Prospectus in order to make the statements therein not misleading and (6) of any determination by the Company or any Guarantor that a post-effective amendment to a Registration Statement or any amendment or supplement to the Prospectus or any Free Writing Prospectus (other than for the purposes of naming a Participating Holder as a selling security holder therein) would be appropriate;

 

(vii)        use their commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or, in the case of a Shelf Registration, the resolution of any objection of the SEC pursuant to Rule 401(g)(2) under the Securities Act, including by filing an amendment to such Registration Statement on the proper form, as soon as reasonably practicable and provide immediate notice to each Holder or Participating Holder of the withdrawal of any such order or such resolution;

 

(viii)     in the case of a Shelf Registration, furnish to each Participating Holder upon request, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without any documents incorporated therein by reference or exhibits thereto, unless requested);

 

(ix)           in the case of a Shelf Registration, cooperate with the Participating Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and enable such Registrable Securities to be issued in such denominations and registered in such names (consistent with the provisions of the Indenture) as such Participating Holders may reasonably request at least one Business Day prior to the closing of any sale of Registrable Securities;

 

(x)              subject to the third paragraph of Section 2(d), upon the occurrence of any event contemplated by Section 3(a)(vi)(5) hereof, use their commercially reasonable efforts to prepare and file with the SEC a supplement or post-effective amendment to the applicable Exchange Offer Registration Statement or Shelf Registration Statement or the related Prospectus or any Free Writing Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered (or, to the extent permitted by law, made available) to purchasers of the Registrable Securities, such Prospectus or Free Writing Prospectus, as the case may be, 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; and the Company and the Guarantors shall notify the Participating Holders (in the case of a Shelf Registration Statement) and the Initial Purchasers and any Participating Broker-Dealers known to the Company (in the case of an Exchange Offer Registration Statement) to suspend use of the Prospectus or any Free Writing Prospectus as promptly as practicable after

 

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the occurrence of such an event, and such Participating Holders, such Participating Broker-Dealers and the Initial Purchasers, as applicable, hereby agree to suspend use of the Prospectus or any Free Writing Prospectus, as the case may be, until the Company and the Guarantors have amended or supplemented the Prospectus or the Free Writing Prospectus, as the case may be, to correct such misstatement or omission;

 

(xi)                   a reasonable time prior to the filing of any Registration Statement, any Prospectus, any Free Writing Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or a Free Writing Prospectus or of any document that is to be incorporated by reference into a Registration Statement, a Prospectus or a Free Writing Prospectus after initial filing of a Registration Statement, provide copies of such document to the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, to the Participating Holders and their counsel) and make such of the representatives of the Company and the Guarantors as shall be reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Participating Holders or their counsel) available for discussion of such document; and the Company and the Guarantors shall not, at any time after initial filing of a Registration Statement, use or file any Prospectus, any Free Writing Prospectus, any amendment of or supplement to a Registration Statement or a Prospectus or a Free Writing Prospectus, or any document that is to be incorporated by reference into a Registration Statement, a Prospectus or a Free Writing Prospectus, of which the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, the Participating Holders and their counsel) shall not have previously been advised and furnished a copy or to which the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Participating Holders or their counsel) shall object; provided, that the immediately preceding sentence shall not prohibit the Company or the Guarantors from making any filing that, in the reasonable opinion of counsel to the Company or Guarantors, is necessary to comply with applicable laws;

 

(xii)                obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the initial effective date of a Registration Statement, which the Company shall use its reasonable best efforts to cause to be the same as the CUSIP number for the exchange notes issued by the Company on May 28, 2013 pursuant to the Base Indenture;

 

(xiii)             cause the Indenture to be qualified under the Trust Indenture Act in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be; cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute, and use their commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;

 

(xiv)            in the case of a Shelf Registration, make available for inspection by a representative of the Participating Holders (an “Inspector”), any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, any attorneys and accountants designated by a majority in aggregate principal amount of the Securities held by the Participating Holders and any attorneys and accountants designated by such Underwriter, at reasonable times and in a reasonable manner, all pertinent financial and other records, documents and properties of the Company and its subsidiaries, and cause the respective officers, directors and employees of the Company and the Guarantors to supply all information reasonably requested by any such Inspector, Underwriter, attorney or accountant in connection with a Shelf Registration Statement; provided that if any such information is identified by the Company or any Guarantor as being confidential or proprietary, each Person receiving such information shall take such actions as are reasonably necessary 

 

11

 

to protect the confidentiality of such information to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of any Inspector, Holder or Underwriter);

 

(xv)               if reasonably requested by any Participating Holder, promptly include in a Prospectus supplement or post-effective amendment such information with respect to such Participating Holder as such Participating Holder reasonably requests to be included therein and make all required filings of such Prospectus supplement or such post-effective amendment as soon as the Company has received notification of the matters to be so included in such filing;

 

(xvi)            in the case of a Shelf Registration, enter into such customary agreements and take all such other actions in connection therewith (including those requested by the Holders of a majority in principal amount of the Registrable Securities covered by the Shelf Registration Statement) in order to expedite or facilitate the disposition of such Registrable Securities including, but not limited to, an Underwritten Offering and in such connection, (1) to the extent possible, make such representations and warranties to the Participating Holders and any Underwriters of such Registrable Securities with respect to the business of the Company and its subsidiaries and the Registration Statement, Prospectus, any Free Writing Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same if and when requested, (2) obtain opinions of counsel to the Company and the Guarantors (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Participating Holders and such Underwriters and their respective counsel) addressed to each Participating Holder and Underwriter of Registrable Securities, covering the matters customarily covered in opinions requested in underwritten offerings, (3) obtain “comfort” letters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other certified public accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each Participating Holder (to the extent permitted by applicable professional standards) and Underwriter of Registrable Securities, such letters to be in customary form and covering matters of the type customarily covered in “comfort” letters in connection with underwritten offerings, including but not limited to financial information contained in any preliminary prospectus, Prospectus or Free Writing Prospectus and (4) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold or the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Company and the Guarantors made pursuant to clause (1) above and to evidence compliance with any customary conditions contained in an underwriting agreement; and

 

(xvii)         so long as any Registrable Securities remain outstanding, cause each Additional Guarantor upon the creation or acquisition by the Company of such Additional Guarantor, to execute a counterpart to this Agreement in the form attached hereto as Annex A and to deliver such counterpart, together with an opinion of counsel as to the enforceability thereof against such entity, to the Initial Purchasers no later than five Business Days following the execution thereof.

 

(b)             In the case of a Shelf Registration Statement, the Company may require each Holder of Registrable Securities to furnish to the Company a Notice and Questionnaire and such other information regarding such Holder and the proposed disposition by such Holder of such Registrable Securities as the Company and the Guarantors may from time to time reasonably request in writing.  Any Holder who fails to comply with such provision shall not be entitled to include its Registrable Securities in such Shelf Registration 

 

12

 

Statement or to receive the increased interest specified under Section 2(d) with respect to such Registrable Securities with respect to the failure to register such Registrable Securities in such Registration Statement.  Each Holder also agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Holder to the Company or of the occurrence of any event in either case as a result of which any Prospectus relating to the Shelf Registration Statement contains or would contain an untrue statement of a material fact regarding such Holder or such Holder’s intended method of disposition of Registrable Securities or omits to state any material fact regarding such Holder or such Holder’s intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statement therein not misleading in light of the circumstances then existing, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such Prospectus shall not contain, with respect to such Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statement therein not misleading in light of the circumstances then existing.

 

(c)              Each Participating Holder agrees that, upon receipt of any notice from the Company and the Guarantors of the happening of any event of the kind described in Section 3(a)(vi)(3) or Section 3(a)(vi)(5) hereof, such Participating Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement until such Participating Holder’s receipt of the copies of the supplemented or amended Prospectus and any Free Writing Prospectus contemplated by Section 3(a)(x) hereof and, if so directed by the Company and the Guarantors, such Participating Holder will deliver to the Company and the Guarantors all copies in its possession, other than permanent file copies then in such Participating Holder’s possession, of the Prospectus and any Free Writing Prospectus covering such Registrable Securities that is current at the time of receipt of such notice.

 

(d)             If the Company and the Guarantors shall give any notice to suspend the disposition of Registrable Securities pursuant to a Registration Statement, the Company and the Guarantors shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders of such Registrable Securities shall have received copies of the supplemented or amended Prospectus or any Free Writing Prospectus necessary to resume such dispositions. The Company and the Guarantors may give any such notice one or more times during any 365-day period and any such suspensions shall not exceed 90 days in the aggregate during any 365-day period.  Each Holder agrees that upon receipt of any notice from the Company pursuant to this Section 3(d), it will discontinue use of the Prospectus contained in such Registration Statement and any Free Writing Prospectus until receipt of copies of the supplemented or amended Prospectus or Free Writing Prospectus relating thereto or until advised in writing by the Company that the use of the Prospectus contained in the such Registration Statement or the Free Writing Prospectus may be resumed.

 

(e)              The Participating Holders who desire to do so may sell such Registrable Securities in an Underwritten Offering.  In any such Underwritten Offering, the investment bank or investment banks and manager or managers (each an “Underwriter”) that will administer the offering will be selected by the Holders of a majority in principal amount of the Registrable Securities included in such offering, subject to the consent of the Company (which shall not be unreasonably withheld or delayed).

 

4.                  Participation of Broker-Dealers in Exchange Offer.

 

(a)             The Staff has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a “Participating Broker-Dealer”) may be

 

13

 

deemed to be an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities.

 

The Company and the Guarantors understand that it is the Staff’s position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers (or, to the extent permitted by law, made available to purchasers) to satisfy their prospectus delivery obligation under the Securities Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act.

 

(b)             In light of the above, and notwithstanding the other provisions of this Agreement, the Company and the Guarantors agree to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement for a period of up to 180 days after the last Exchange Date (as such period may be extended pursuant to Section 3(d) hereof), in order to expedite or facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent with the positions of the Staff recited in Section 4(a) above.  The Company and the Guarantors further agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or, to the extent permitted by law, make available) during such period in connection with the resales contemplated by this Section 4.  The Company and the Guarantors further agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or, to the extent permitted by law, make available) during such period (but not thereafter) in connection with the resales contemplated by this Section 4; provided, that in connection with the application of the Shelf Registration procedures set forth in Section 3 to the Exchange Offer Registration, the Company and the Guarantors shall be obligated (x) to deal only with one entity representing the Participating Broker-Dealers, which may be J.P. Morgan, (y) to pay the reasonable fees and expenses of only one counsel representing the Participating Broker-Dealers, which may be counsel to the Initial Purchasers unless such counsel elects not to so act and (z) to cause to be delivered only one, if any, “cold comfort” letter in customary form with respect to the Prospectus and with respect to each subsequent amendment to supplement, if any, effected during the period specified in Section 3 above.

 

(c)              The Initial Purchasers shall have no liability to the Company, any Guarantor or any Holder with respect to any request that they may make pursuant to Section 4(b) hereof.

 

5.  Indemnification and Contribution.

 

(a)             The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser and each Holder, their respective affiliates, directors and officers and each Person, if any, who controls any Initial Purchaser or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (1) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or (2) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus, any Free Writing Prospectus or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue

 

14

 

statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser or information relating to any Holder furnished to the Company in writing through J.P. Morgan or any selling Holder, respectively, expressly for use therein.  In connection with any Underwritten Offering permitted by Section 3, the Company and the Guarantors, jointly and severally, will also indemnify the Underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their respective affiliates and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement, any Prospectus, any Free Writing Prospectus or any Issuer Information.

 

(b)             Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors, the Initial Purchasers and the other selling Holders, the directors of the Company and the Guarantors, each officer of the Company and the Guarantors who signed the Registration Statement and each Person, if any, who controls the Company, the Guarantors, any Initial Purchaser and any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities (including, without limitation, reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred) that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement, any Prospectus and any Free Writing Prospectus.

 

(c)  If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”) shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraph (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b) above.  If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 5 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred.  Any such separate firm (x) for any Initial Purchaser, its affiliates, directors and officers and any control Persons of such Initial Purchaser shall be designated in writing by J.P. Morgan, (y) for any Holder, its directors 

 

15

 

and officers and any control Persons of such Holder shall be designated in writing by the Majority Holders and (z) in all other cases shall be designated in writing by the Company.  The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement.  No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

 

(d)  If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by the Holders from receiving Securities or Exchange Securities registered under the Securities Act, on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Holders on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(e)  The Company, the Guarantors and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above.  The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses incurred by such Indemnified Person in connection with any such action or claim.  Notwithstanding the provisions of this Section 5 in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which the Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute pursuant to this Section 5 are several and not joint.

 

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(f)  The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

 

(g)  The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Initial Purchasers or any Holder or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the Guarantors or the officers or directors of or any Person controlling the Company or the Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities pursuant to a Shelf Registration Statement.

 

6.  General.

 

(a)             No Inconsistent Agreements.   The Company and the Guarantors represent, warrant and agree that (i) the rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of any other outstanding securities issued or guaranteed by the Company or any Guarantor under any other agreement and (ii) neither the Company nor any Guarantor has entered into, or on or after the date of this Agreement will enter into, any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof.

 

(b)             Amendments and Waivers.   The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or consent; provided that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder.  Any amendments, modifications, supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing executed by each of the parties hereto.

 

(c)              Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in the Purchase Agreement; (ii) if to the Company and the Guarantors, initially at the Company’s address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c); and (iii) to such other persons at their respective addresses as provided in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c).  All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery.  Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture.

 

(d)             Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture.  If any transferee of any Holder shall acquire Registrable Securities 

 

17

 

in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof.  The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder (other than such Initial Purchaser) to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement.

 

(e)              Third Party Beneficiaries.  Each Holder shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of other Holders hereunder.

 

(f)               Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

(g)              Headings.  The headings in this Agreement are for convenience of reference only, are not a part of this Agreement and shall not limit or otherwise affect the meaning hereof.

 

(h)             Governing Law.  This Agreement, and any claim, controversy or dispute arising under or related to this Agreement, shall be governed by and construed in accordance with the laws of the State of New York.

 

(j)                Entire Agreement; Severability.  This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto.  If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  The Company, the Guarantors and the Initial Purchasers shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which  comes as close as possible to that of the invalid, void or unenforceable provisions.

 

(Signature Pages Follow)

 

18

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
SELECT   MEDICAL CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Michael   E. Tarvin
    
	
 
    	
 
    	
Name:   Michael E. Tarvin
    
	
 
    	
 
    	
Title:   
    	
Executive   Vice President, General Counsel and Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EACH   OF THE INITIAL GUARANTORS LISTED ON SCHEDULE I HERETO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/Michael   E. Tarvin
    
	
 
    	
 
    	
Name:   Michael E. Tarvin
    
	
 
    	
 
    	
Title:   Vice President
    

 

19

 

 

Confirmed and accepted as of the date first above written:

 

J.P. MORGAN SECURITIES LLC

 

Acting on behalf of itself and as
 Representative of the several
 Initial Purchasers

 

 

	
By:
    	
/s/   Lauren Camp
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    

 

 

Schedule 1

 

Initial Guarantors

 

	
1.
    	
Advantage   Rehabilitation Clinics, Inc.
    
	
2.
    	
American   Transitional Hospitals, Inc.
    
	
3.
    	
Baseline   Rehabilitation, Inc.
    
	
4.
    	
C.E.R. -   West, Inc.
    
	
5.
    	
Community Rehab   Centers of Massachusetts, Inc.
    
	
6.
    	
Crowley Physical   Therapy Clinic, Inc.
    
	
7.
    	
Dade   Prosthetics & Orthotics, Inc.
    
	
8.
    	
Douglas   Avery & Associates, Ltd.
    
	
9.
    	
Eagle Rehab   Corporation
    
	
10.
    	
Fine,   Bryant & Wah, Inc.
    
	
11.
    	
Georgia Physical   Therapy, Inc.
    
	
12.
    	
GRSH ES, Inc.
    
	
13.
    	
Gulf Breeze   Physical Therapy, Inc.
    
	
14.
    	
Hospital Holdings   Corporation
    
	
15.
    	
Indianapolis   Physical Therapy and Sports Medicine, Inc.
    
	
16.
    	
Intensiva   Healthcare Corporation
    
	
17.
    	
Intensiva Hospital   of Greater St. Louis, Inc.
    
	
18.
    	
Johnson Physical   Therapy, Inc.
    
	
19.
    	
Joyner   Sportsmedicine Institute, Inc.
    
	
20.
    	
Kentucky   Rehabilitation Services, Inc.
    
	
21.
    	
Kessler Institute   for Rehabilitation, Inc.
    
	
22.
    	
Kessler   Orthotic & Prosthetic Services, Inc.
    
	
23.
    	
Kessler Rehab   Centers, Inc.
    
	
24.
    	
Kessler   Rehabilitation Corporation
    
	
25.
    	
Kessler   Rehabilitation Services, Inc.
    
	
26.
    	
Madison   Rehabilitation Center, Inc.
    
	
27.
    	
Metro   Rehabilitation Services, Inc.
    
	
28.
    	
Metro   Therapy, Inc.
    
	
29.
    	
New England   Rehabilitation Center of Southern New Hampshire, Inc.
    
	
30.
    	
NovaCare   Occupational Health Services, Inc.
    
	
31.
    	
NovaCare   Outpatient Rehabilitation East, Inc.
    
	
32.
    	
NovaCare Outpatient   Rehabilitation, Inc.
    
	
33.
    	
NovaCare   Rehabilitation of Ohio, Inc.
    
	
34.
    	
NovaCare   Rehabilitation, Inc.
    
	
35.
    	
OHRH ES, Inc.
    
	
36.
    	
Pacific   Rehabilitation & Sports Medicine, Inc.
    
	
37.
    	
PR Acquisition   Corporation
    
	
38.
    	
Pro Active Therapy   of North Carolina, Inc.
    
	
39.
    	
Pro Active Therapy   of South Carolina, Inc.
    
	
40.
    	
Pro Active Therapy   of Virginia, Inc.
    
	
41.
    	
Pro Active   Therapy, Inc.
    
	
42.
    	
Professional   Sports Care Management, Inc.
    
	
43.
    	
Professional   Therapeutic Services, Inc.
    
	
44.
    	
Professional   Therapy Systems, Inc.
    

 

S-1

 

	
45.
    	
PTSMA, Inc.
    
	
46.
    	
RCI   (Michigan), Inc.
    
	
47.
    	
RCI   (WRS), Inc.
    
	
48.
    	
Regency Management   Company, Inc.
    
	
49.
    	
Rehab Provider   Network - East I, Inc.
    
	
50.
    	
Rehab Provider   Network - East II, Inc.
    
	
51.
    	
Rehab Provider   Network - Indiana, Inc.
    
	
52.
    	
Rehab Provider   Network - New Jersey, Inc.
    
	
53.
    	
Rehab Provider   Network - Pennsylvania, Inc.
    
	
54.
    	
Rehab Provider   Network of Colorado, Inc.
    
	
55.
    	
Rehab Provider   Network of Florida, Inc.
    
	
56.
    	
Rehab Provider   Network of New Mexico, Inc.
    
	
57.
    	
Rehab Provider   Network of North Carolina, Inc.
    
	
58.
    	
Rehab Provider   Network of South Carolina, Inc.
    
	
59.
    	
Rehab Provider   Network of Texas, Inc.
    
	
60.
    	
Rehab Provider   Network of Virginia, Inc.
    
	
61.
    	
Rehab Provider   Network-Michigan, Inc.
    
	
62.
    	
Rehab Provider   Network-Ohio, Inc.
    
	
63.
    	
RehabClinics   (GALAXY), Inc.
    
	
64.
    	
RehabClinics   (PTA), Inc.
    
	
65.
    	
RehabClinics   (SPT), Inc.
    
	
66.
    	
RehabClinics, Inc.
    
	
67.
    	
Rehabilitation   Center of Washington, D.C., Inc.
    
	
68.
    	
RPN of   NC, Inc.
    
	
69.
    	
S.T.A.R.T., Inc.
    
	
70.
    	
Select Employment   Services, Inc.
    
	
71.
    	
Select Hospital   Investors, Inc.
    
	
72.
    	
Select Medical of   Kentucky, Inc.
    
	
73.
    	
Select Medical of   Maryland, Inc.
    
	
74.
    	
Select Medical of   New York, Inc.
    
	
75.
    	
Select Medical   Rehabilitation Clinics, Inc.
    
	
76.
    	
Select Medical   Rehabilitation Services, Inc.
    
	
77.
    	
Select NovaCare -   KOP, Inc.
    
	
78.
    	
Select NovaCare -   PBG, Inc.
    
	
79.
    	
Select NovaCare -   PIT, Inc.
    
	
80.
    	
Select Physical   Therapy Holdings, Inc.
    
	
81.
    	
Select Physical   Therapy Network Services, Inc.
    
	
82.
    	
Select Physical   Therapy of Chicago, Inc.
    
	
83.
    	
Select Physical   Therapy Orthopedic Services, Inc.
    
	
84.
    	
Select Provider   Networks, Inc.
    
	
85.
    	
Select   Rehabilitation Hospital - Hershey, Inc.
    
	
86.
    	
Select Specialty   Hospital - Ann Arbor, Inc.
    
	
87.
    	
Select Specialty   Hospital - Arizona, Inc.
    
	
88.
    	
Select Specialty   Hospital - Augusta, Inc.
    
	
89.
    	
Select Specialty   Hospital - Beech Grove, Inc.
    
	
90.
    	
Select Specialty   Hospital - Charleston, Inc.
    
	
91.
    	
Select Specialty   Hospital - Cincinnati, Inc.
    
	
92.
    	
Select Specialty   Hospital - Colorado Springs, Inc.
    
	
93.
    	
Select Specialty   Hospital - Columbus, Inc.
    
	
94.
    	
Select Specialty   Hospital - Conroe, Inc.
    
	
95.
    	
Select Specialty   Hospital - Dallas, Inc.
    

 

S-2

 

	
96.
    	
Select Specialty   Hospital - Danville, Inc.
    
	
97.
    	
Select Specialty   Hospital - Daytona Beach, Inc.
    
	
98.
    	
Select Specialty   Hospital - Denver, Inc.
    
	
99.
    	
Select Specialty   Hospital - Durham, Inc.
    
	
100.
    	
Select Specialty   Hospital - Erie, Inc.
    
	
101.
    	
Select Specialty   Hospital - Evansville, Inc.
    
	
102.
    	
Select Specialty   Hospital - Flint, Inc.
    
	
103.
    	
Select Specialty   Hospital - Fort Smith, Inc.
    
	
104.
    	
Select Specialty   Hospital - Fort Wayne, Inc.
    
	
105.
    	
Select Specialty   Hospital - Gainesville, Inc.
    
	
106.
    	
Select Specialty   Hospital - Greensboro, Inc.
    
	
107.
    	
Select Specialty   Hospital - Grosse Pointe, Inc.
    
	
108.
    	
Select Specialty   Hospital - Jackson, Inc.
    
	
109.
    	
Select Specialty   Hospital - Johnstown, Inc.
    
	
110.
    	
Select Specialty   Hospital - Kalamazoo, Inc.
    
	
111.
    	
Select Specialty   Hospital - Kansas City, Inc.
    
	
112.
    	
Select Specialty   Hospital - Knoxville, Inc.
    
	
113.
    	
Select Specialty   Hospital - Laurel Highlands, Inc.
    
	
114.
    	
Select Specialty   Hospital - Lexington, Inc.
    
	
115.
    	
Select Specialty   Hospital - Little Rock, Inc.
    
	
116.
    	
Select Specialty   Hospital - Longview, Inc.
    
	
117.
    	
Select Specialty   Hospital - Macomb County, Inc.
    
	
118.
    	
Select Specialty   Hospital - Madison, Inc.
    
	
119.
    	
Select Specialty   Hospital - McKeesport, Inc.
    
	
120.
    	
Select Specialty   Hospital - Melbourne, Inc.
    
	
121.
    	
Select Specialty   Hospital - Memphis, Inc.
    
	
122.
    	
Select Specialty   Hospital - Midland, Inc.
    
	
123.
    	
Select Specialty   Hospital - Milwaukee, Inc.
    
	
124.
    	
Select Specialty   Hospital - Nashville, Inc.
    
	
125.
    	
Select Specialty   Hospital - North Knoxville, Inc.
    
	
126.
    	
Select Specialty   Hospital - Northeast New Jersey, Inc.
    
	
127.
    	
Select Specialty   Hospital - Northeast Ohio, Inc.
    
	
128.
    	
Select Specialty   Hospital - Northwest Detroit, Inc.
    
	
129.
    	
Select Specialty   Hospital - Oklahoma City, Inc.
    
	
130.
    	
Select Specialty   Hospital - Omaha, Inc.
    
	
131.
    	
Select Specialty   Hospital - Orlando, Inc.
    
	
132.
    	
Select Specialty   Hospital - Palm Beach, Inc.
    
	
133.
    	
Select Specialty   Hospital - Panama City, Inc.
    
	
134.
    	
Select Specialty   Hospital - Pensacola, Inc.
    
	
135.
    	
Select Specialty   Hospital - Phoenix, Inc.
    
	
136.
    	
Select Specialty   Hospital - Pittsburgh/UPMC, Inc.
    
	
137.
    	
Select Specialty   Hospital - Pontiac, Inc.
    
	
138.
    	
Select Specialty   Hospital - Quad Cities, Inc.
    
	
139.
    	
Select Specialty   Hospital - Saginaw, Inc.
    
	
140.
    	
Select Specialty   Hospital - San Antonio, Inc.
    
	
141.
    	
Select Specialty   Hospital - Savannah, Inc.
    
	
142.
    	
Select Specialty   Hospital - Sioux Falls, Inc.
    
	
143.
    	
Select Specialty   Hospital - South Dallas, Inc.
    
	
144.
    	
Select Specialty   Hospital - Springfield, Inc.
    
	
145.
    	
Select Specialty   Hospital - Tallahassee, Inc.
    
	
146.
    	
Select Specialty   Hospital - Topeka, Inc.
    

 

S-3

 

	
147.
    	
Select Specialty   Hospital - TriCities, Inc.
    
	
148.
    	
Select Specialty   Hospital - Tulsa, Inc.
    
	
149.
    	
Select Specialty   Hospital - Western Michigan, Inc.
    
	
150.
    	
Select Specialty   Hospital - Western Missouri, Inc.
    
	
151.
    	
Select Specialty   Hospital - Wichita, Inc.
    
	
152.
    	
Select Specialty   Hospital - Wilmington, Inc.
    
	
153.
    	
Select Specialty   Hospital - Winston-Salem, Inc.
    
	
154.
    	
Select Specialty   Hospital - Youngstown, Inc.
    
	
155.
    	
Select Specialty   Hospital - Zanesville, Inc.
    
	
156.
    	
Select Specialty   Hospitals, Inc.
    
	
157.
    	
Select   Subsidiaries, Inc.
    
	
158.
    	
Select   Synergos, Inc.
    
	
159.
    	
Select   Transport, Inc.
    
	
160.
    	
Select Unit   Management, Inc.
    
	
161.
    	
SemperCare, Inc.
    
	
162.
    	
Sports &   Orthopedic Rehabilitation Services, Inc.
    
	
163.
    	
The Rehab   Group, Inc.
    
	
164.
    	
Theraworks, Inc.
    
	
165.
    	
Victoria   Healthcare, Inc.
    
	
166.
    	
SelectMark, Inc.
    
	
167.
    	
SLMC Finance   Corporation
    
	
168.
    	
Select Physical   Therapy of Albuquerque, Ltd.
    
	
169.
    	
Select Physical   Therapy of Birmingham, Ltd.
    
	
170.
    	
Select Physical   Therapy of Blue Springs Limited Partnership
    
	
171.
    	
Select Physical   Therapy of Cave Springs Limited Partnership
    
	
172.
    	
Select Physical   Therapy of Colorado Springs Limited Partnership
    
	
173.
    	
Select Physical   Therapy of Connecticut Limited Partnership
    
	
174.
    	
Select Physical   Therapy of Denver, Ltd.
    
	
175.
    	
Select Physical   Therapy of Green Bay Limited Partnership
    
	
176.
    	
Select Physical   Therapy of Illinois Limited Partnership
    
	
177.
    	
Select Physical   Therapy of Kendall, Ltd.
    
	
178.
    	
Select Physical   Therapy of Knoxville Limited Partnership
    
	
179.
    	
Select Physical   Therapy of Lorain Limited Partnership
    
	
180.
    	
Select Physical   Therapy of Louisville, Ltd.
    
	
181.
    	
Select Physical   Therapy of Portola Valley Limited Partnership
    
	
182.
    	
Select Physical   Therapy of Scottsdale Limited Partnership
    
	
183.
    	
Select Physical   Therapy of St. Louis Limited Partnership
    
	
184.
    	
Select Physical   Therapy of West Denver Limited Partnership
    
	
185.
    	
Select Physical   Therapy Texas Limited Partnership
    
	
186.
    	
Select Physical   Therapy of Ohio Limited Partnership
    
	
187.
    	
Select Physical   Therapy Limited Partnership for Better Living
    
	
188.
    	
Regency Hospital   of Odessa, LLLP
    
	
189.
    	
Regency Hospital   Company of Macon, L.L.C.
    
	
190.
    	
Regency Hospital   Company of Meridian, L.L.C.
    
	
191.
    	
Regency Hospital   Company of South Atlanta, L.L.C.
    
	
192.
    	
Regency Hospital   Company of South Carolina, L.L.C.
    
	
193.
    	
Regency Hospital   of Cincinnati, LLC
    
	
194.
    	
Regency Hospital   of Columbus, LLC
    
	
195.
    	
Regency Hospital   of Covington, LLC
    
	
196.
    	
Regency Hospital   of Greenville, LLC
    
	
197.
    	
Regency Hospital   of Jackson, LLC
    

 

S-4

 

	
198.
    	
Regency Hospital   of Minneapolis, LLC
    
	
199.
    	
Regency Hospital   of North Central Ohio, LLC
    
	
200.
    	
Regency Hospital   of North Dallas Holdings, LLC
    
	
201.
    	
Regency Hospital   of Northwest Arkansas, LLC
    
	
202.
    	
Regency Hospital   of Northwest Indiana, LLC
    
	
203.
    	
Regency Hospital   of Southern Mississippi, LLC
    
	
204.
    	
Regency Hospital   of Toledo, LLC
    
	
205.
    	
Regency Hospital   of Odessa Limited Partner, LLC
    
	
206.
    	
Regency Hospital   of Fort Worth Holdings, LLC
    
	
207.
    	
Kessler   Professional Services, LLC
    
	
208.
    	
Argosy Health, LLC
    
	
209.
    	
Select Medical   Property Ventures, LLC
    
	
210.
    	
Select Specialty   Hospital — Northern Kentucky, LLC
    
	
211.
    	
Select Specialty   Hospital — Tulsa/Midtown, LLC
    
	
212.
    	
West Gables   Rehabilitation Hospital, LLC
    
	
213.
    	
GP Therapy, L.L.C.
    
	
214.
    	
The Rehab Group —   Murfreesboro, LLC
    
	
215.
    	
GH General — San   Antonio, LLC
    
	
216.
    	
GR General —   Scottsdale, LLC
    
	
217.
    	
Regency Hospital   Company, L.L.C.
    
	
218.
    	
Regency Hospitals,   LLC
    

 

S-5

 

Annex A

 

Counterpart to Registration Rights Agreement

 

The undersigned hereby absolutely, unconditionally and irrevocably agrees as a Guarantor (as defined in the Registration Rights Agreement, dated March 11, 2014 by and among Select Medical Corporation, a Delaware corporation, the guarantors party thereto and J.P. Morgan Securities LLC, on behalf of itself and as Representative of the several Initial Purchasers) to be bound by the terms and provisions of such Registration Rights Agreement.

 

IN WITNESS WHEREOF, the undersigned has executed this counterpart as of                               , 201  .

 

	
 
    	
[GUARANTOR]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-1Exhibit 4.2

 

Execution Version

 

FOURTH SUPPLEMENTAL INDENTURE

 

Dated as of March 11, 2014

 

to

 

INDENTURE

 

Dated as of October 11, 2012

 

Between

 

AIR LEASE CORPORATION

 

and

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

 

as Trustee

 

3.875% Senior Notes due 2021

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1 DEFINITIONS
    	
2
    
	
 
    	
 
    
	
Section 1.1
    	
Definitions
    	
2
    
	
Section 1.2
    	
Other Defined Terms
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 TERMS AND   DESCRIPTION OF NOTES
    	
9
    
	
 
    	
 
    
	
Section 2.1
    	
Indenture
    	
9
    
	
Section 2.2
    	
Designation and Amount
    	
9
    
	
Section 2.3
    	
Form of Notes
    	
9
    
	
Section 2.4
    	
Maturity
    	
9
    
	
Section 2.5
    	
Denominations Of Notes
    	
9
    
	
Section 2.6
    	
Additional Notes
    	
9
    
	
Section 2.7
    	
Interest
    	
9
    
	
Section 2.8
    	
Paying Agent, Registrar, Place of Payment
    	
10
    
	
Section 2.9
    	
Sinking Fund
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 SATISFACTION AND   DISCHARGE
    	
10
    
	
 
    	
 
    
	
Section 3.1
    	
Satisfaction and Discharge of Indenture
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 AMENDMENTS AND   WAIVERS
    	
11
    
	
 
    	
 
    
	
Section 4.1
    	
Supplemental Indentures without Consent of Holders
    	
11
    
	
Section 4.2
    	
Supplemental Indentures with Consent of Holders
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 CERTAIN COVENANTS   OF THE COMPANY
    	
12
    
	
 
    	
 
    
	
Section 5.1
    	
Limitation on Liens
    	
12
    
	
Section 5.2
    	
Release of Liens
    	
13
    
	
Section 5.3
    	
Merger, Consolidation or Sale of All or Substantially All   Assets
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 DEFAULTS AND   REMEDIES
    	
14
    
	
 
    	
 
    
	
Section 6.1
    	
Events of Default
    	
14
    
	
Section 6.2
    	
Acceleration
    	
16
    
	
Section 6.3
    	
Control by Holders
    	
17
    
	
Section 6.4
    	
Waivers
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 DEFEASANCE
    	
17
    
	
 
    	
 
    
	
Section 7.1
    	
Covenant Defeasance
    	
17
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 8 REPURCHASE OF   NOTES AT OPTION OF HOLDERS
    	
17
    
	
 
    	
 
    
	
Section 8.1
    	
Offer to Repurchase Upon Change of Control Repurchase Event
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 OPTIONAL   REDEMPTION
    	
20
    
	
 
    	
 
    
	
Section 9.1
    	
Optional Redemption
    	
20
    
	
Section 9.2
    	
Modification of Base Indenture
    	
21
    
	
 
    	
 
    	
 
    
	
ARTICLE 10 MISCELLANEOUS   PROVISIONS
    	
21
    
	
 
    	
 
    
	
Section 10.1
    	
Governing Law
    	
21
    
	
Section 10.2
    	
Effect of Headings
    	
21
    
	
Section 10.3
    	
Severability
    	
21
    
	
Section 10.4
    	
Ratification of Indenture
    	
22
    
	
Section 10.5
    	
Trustee Not Responsible for Recitals
    	
22
    
	
Section 10.6
    	
Waiver of Jury Trial
    	
22
    
	
Section 10.7
    	
Counterparts
    	
22
    

 

ii

 

FOURTH SUPPLEMENTAL INDENTURE, dated as of March 11, 2014 (this “Supplemental Indenture”), by and among Air Lease Corporation, a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), and Deutsche Bank Trust Company Americas, a New York banking corporation, as Trustee (the “Trustee”).

 

RECITALS

 

WHEREAS, the Company has executed and delivered to the Trustee the Indenture, dated as of October 11, 2012 (the “Base Indenture”), to provide for the issuance of the Company’s debt securities, to be issued in one or more series;

 

WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a new series of debt securities to be known as the “3.875% Senior Notes due 2021” (the “Notes”), the form and substance and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture, as supplemented by this Supplemental Indenture;

 

WHEREAS, the Board of Directors of the Company by duly adopted resolutions has authorized certain officers of the Company to, among other things, determine the terms of the debt securities to be issued under the Indenture and execute any and all appropriate documents necessary or appropriate to effect each such issuance;

 

WHEREAS, this Supplemental Indenture is being entered into pursuant to the provisions of Sections 2.01, 3.01 and 9.01 of the Base Indenture;

 

WHEREAS, Sections 9.01(e) and 9.01(p) of the Base Indenture provide that without the consent of Holders of the Securities of any series issued under the Indenture, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Base Indenture, in form satisfactory to the Trustee, to (i) add to, change or eliminate any of the provisions of the Indenture when there is no Security Outstanding of any series created prior to the execution of a supplemental indenture that is entitled to the benefit of such provision and (ii) create and issue Add On Securities pursuant to Section 3.01 of the Base Indenture;

 

WHEREAS, the Company desires to establish the form and terms of the Notes and to modify, alter, supplement and change certain provisions of the Base Indenture for the benefit of the Holders of the Notes (except as may be provided in a future supplemental indenture to the Indenture (“Future Supplemental Indenture”));

 

WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture; and

 

WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Company, in accordance with its terms, and to make the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have, in each case, been performed, and the execution and delivery of this Supplemental Indenture has been duly authorized in all respects;

 

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the forms and terms of the Notes, the Company covenants and agrees, with the Trustee, as follows:

 

ARTICLE 1
 DEFINITIONS

 

Section 1.1                                    Definitions.  For all purposes of the Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

(a)                                 the terms defined in this Article 1 shall have the respective meanings assigned to them in this Article 1 and include the plural as well as the singular and, to the extent applicable, supersede the definitions thereof in the Base Indenture with respect to the Notes;

 

(b)                                 all words, terms and phrases defined in the Base Indenture (but not otherwise defined herein) shall have the same meanings as in the Base Indenture;

 

(c)                                  unless the context otherwise requires, (i) any reference to an “Article” or “Section” refers to an Article or Section, as the case may be, of this Supplemental Indenture; and (ii) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to the Indenture as a whole as amended and/or supplemented by this Supplemental Indenture and not to any particular Article, Section or other subdivision; and

 

(d)                                 unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

 

“Aircraft Assets” means (x) aircraft, airframes, engines (including spare engines), propellers, parts and other operating assets and pre-delivery payments relating to any of the items in this clause (x); and (y) intermediate or operating leases relating to any of the items in the foregoing clause (x).

 

“ALC Maillot” means ALC Maillot Jaune Borrower, LLC, a Delaware limited liability company.

 

“ALC Warehouse” means ALC Warehouse Borrower, LLC, a Delaware limited liability company.

 

“Applicable Premium” means, with respect to a Note on any Redemption Date, the excess, if any, of (x) the present value as of such Redemption Date of (i) 100% of the principal amount of such Note plus (ii) all required interest payments due on such Note through April 1, 2021 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption

 

2

 

Date plus 30 basis points, over (y) the then outstanding principal of such Note.

 

“Bankruptcy Law” means Title 11, U.S. Code, as amended, or any similar federal, state or foreign law for the relief of debtors.

 

“Below Investment Grade Rating Event” means that at any time within 60 days (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies) from the date of the public notice of a Change of Control or of the Company’s intention or that of any Person to effect a Change of Control, the rating on the Notes is lowered, and the Notes are rated below an Investment Grade Rating, by (x) one Rating Agency if the Notes are rated by less than two Rating Agencies, (y) both Rating Agencies if the Notes are rated by two Rating Agencies or (z) at least a majority of such Rating Agencies if the Notes are rated by three or more Rating Agencies; provided, that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at its request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).

 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close, and when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

 

“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

 

“Capital Stock” of a Person means all equity interests in such Person, including any common stock, preferred stock, limited liability or partnership interests (whether general or limited), and all warrants or options with respect to, or other rights to purchase, the foregoing, but excluding Convertible Notes and other indebtedness (other than preferred stock) convertible into equity.

 

“Change of Control” means, the occurrence of any one of the following:

 

(x)                                 a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, a direct or indirect Subsidiary, or any employee or executive benefit plan of the Company and/or its Subsidiaries, has become the

 

3

 

“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Stock representing more than 50% of the total voting power of all Common Stock of the Company then outstanding and constituting Voting Stock;

 

(y)                                 the consummation of (i) any consolidation or merger of the Company pursuant to which the Company’s Common Stock will be converted into the right to obtain cash, securities of a Person other than the Company, or other property; or (ii) any sale, lease or other transfer in one transaction or a series of related transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any other Person other than a direct or indirect Subsidiary of the Company; provided, that Aircraft Asset leasing in the ordinary course of business of the Company or any of its Subsidiaries shall not be considered the leasing of “all or substantially all” of the Company’s consolidated assets; provided further, however, that a transaction described in clause (i) or (ii) in which the holders of the Company’s Common Stock immediately prior to such transaction own or hold, directly or indirectly, more than 50% of the voting power of all Common Stock of the continuing or surviving corporation or the transferee, or the parent thereof, outstanding immediately after such transaction and constituting Voting Stock shall not constitute a Change of Control; or

 

(z)                                  the adoption of a plan relating to the Company’s liquidation or dissolution.

 

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

 

“Common Stock” shall mean and include any class of capital stock of any corporation now or hereafter authorized, the right of which to share in distributions of either earnings or assets of such corporation is without limit as to any amount or percentage.

 

“Consolidated Tangible Assets” at any date means the total assets of the Company and its Subsidiaries reported on the most recently prepared consolidated balance sheet of the Company filed with the Commission or delivered to the Trustee as of the end of a fiscal quarter, less all assets shown on such consolidated balance sheet that are classified and accounted for as intangible assets of the Company or any of its Subsidiaries or that otherwise would be considered intangible assets under GAAP, including, without limitation, franchises, patents and patent applications, trademarks, brand names, unamortized debt discount and goodwill.

 

“Convertible Notes” means indebtedness of the Company that is optionally convertible into Capital Stock of the Company (and/or cash based on the value of such Capital Stock) and/or indebtedness of a Subsidiary of the Company that is optionally exchangeable for Capital Stock of the Company (and/or cash based on the value of such Capital Stock).

 

“Default” means any event that is, or after the notice or passage of time or both would be, an Event of Default.

 

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“DTC” means The Depository Trust Company.

 

“ECA Indebtedness” means any indebtedness incurred in order to fund the deliveries of new Aircraft Assets, which indebtedness is guaranteed by one or more Export Credit Agencies, including guarantees thereof by the Company or any of its Subsidiaries.

 

“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time and the rules and regulations of the Commission promulgated thereunder.

 

“Export Credit Agencies” means collectively, the export credit agencies or other governmental authorities that provide export financing of new Aircraft Assets (including, but not limited to, the Brazilian Development Bank, Compagnie Francaise d’Assurance pour le Commerce Exterieur, Her Britannic Majesty’s Secretary of State acting by the Export Credits Guarantee Department, Euler-Hermes Kreditversicherungs AG, the Export-Import Bank of the United States, the Export Development Canada or any successor thereto).

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the Issue Date.

 

“Holder” means a Person in whose name a Note is registered in the Security Register for the Notes, and such Person shall be treated as the owner of such Note for all purposes under the Indenture.

 

“Indenture” means the Base Indenture as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental thereto entered into pursuant to the applicable provisions thereof, including, for all purposes of the Base Indenture and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern the Base Indenture and any such supplemental indenture, respectively. The term “Indenture,” when used with respect to a particular series of Securities (including the Notes), shall also include the terms of such particular series of Securities (including the Notes) established as contemplated by Section 3.01 of the Base Indenture, including by this Supplemental Indenture.

 

“interest” with respect to the Notes means interest with respect thereto.

 

“Investment Grade Rating” means a rating equal to or higher than BBB- by S&P, or the equivalent of any other Rating Agency, as applicable, or in each case the equivalent under any successor category of such Rating Agency.

 

“Issue Date” means March 11, 2014.

 

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“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any Capital Lease, upon or with respect to any property or asset of such Person.

 

“Non-Recourse Indebtedness” means, with respect to any Person, any indebtedness of such Person or its Subsidiaries that is, by its terms, recourse only to specific assets and non-recourse to the assets of such Person generally and that is neither guaranteed by any Affiliate (other than a Subsidiary) of such Person or would become the obligation of any Affiliate (other than a Subsidiary) of such Person upon a default thereunder, other than (x) recourse for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of single purpose entity covenants and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guaranty or indemnification agreements in non-recourse financings, (y) recourse to the equity interests of such Person or its Subsidiaries and to a guarantee by the Company or any Affiliate of the Company that does not exceed 10% of the outstanding indebtedness of such Person and its Subsidiaries, including such a guarantee of Warehouse Facility Indebtedness, and (z) the existence of a guarantee that does not constitute a guarantee of payment of principal, interest or premium on indebtedness.

 

“Notice of Default” means a written notice of the kind specified in clause (c) of Section 6.1 of this Supplemental Indenture.

 

“Place of Payment” means, with respect to the Notes, the place or places where the principal of and any premium and interest on the Notes are payable as specified as contemplated in the Indenture.

 

“Rating Agency” means S&P and any additional rating agency that provides a rating with respect to the Notes and is a “nationally recognized statistical rating organization” as defined in Section 3(a)(62) of the Exchange Act (“NRSRO”); provided, that if any such Rating Agency ceases to provide rating services to issuers or investors, the Company may appoint a replacement for such Rating Agency that is a NRSRO.

 

“S&P” means Standard & Poor’s Ratings Services or any successor to its rating agency business.

 

“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time and the rules and regulations of the Commission promulgated thereunder.

 

“Special Purpose Aircraft Financing Entity” means a Subsidiary of the Company (x) that engages in no business other than the purchase, finance, refinance, lease, sale and management of Aircraft Assets, the ownership of Special Purpose Aircraft Financing Entities and business incidental thereto; (y) substantially all of the assets of which are comprised of Aircraft Assets and/or Capital Stock in Special Purpose Aircraft

 

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Financing Entities; and (z) that is not obligated under, or the organizational documents or financing documents of which prevent it from incurring, in each case, indebtedness for money borrowed other than indebtedness incurred to finance or refinance the purchase, lease or acquisition of Aircraft Assets and the purchase of Special Purpose Aircraft Financing Entities or the cost of construction, repair, refurbishment, modification or improvement thereof.

 

“Subsidiary” of any Person means (x) any corporation, association or similar business entity (other than a partnership, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors or trustees thereof (or Persons performing similar functions) or (y) any partnership, limited liability company, trust or similar entity of which more than 50% of the capital accounts, distribution rights or total equity, as applicable, is, in the case of clauses (x) and (y), at the time owned, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary will refer to a Subsidiary of the Company.

 

“Treasury Rate” means as of any Redemption Date the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source or similar market data)) most nearly equal to the period from the Redemption Date to April 1, 2021; provided, however, that if the period from the Redemption Date to April 1, 2021 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the Redemption Date to April 1, 2021 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

“U.S. Government Obligation” means (x) any security that is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation that is specified in clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such

 

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depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

 

“Voting Stock” means Capital Stock of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect the corporate directors (or Persons performing similar functions).

 

“Warehouse Facility Indebtedness” means indebtedness under (x) that certain Amended and Restated Warehouse Loan Agreement, dated as of June 21, 2013, among ALC Warehouse, the lenders party thereto and Credit Suisse AG, New York Branch, as Agent, and (y) (i) that certain Credit Agreement, dated as of March 8, 2012, among ALC Maillot, the subsidiary guarantors party thereto, the lenders party thereto, Credit Agricole Corporate and Investment Bank, as administrative agent, and Deutsche Bank Trust Company Americas, as collateral agent; and (ii) that certain Liquidity Facility Agreement, dated as of March 8, 2012, among ALC Maillot, Credit Agricole Corporate and Investment Bank, as liquidity facility provider, and Credit Agricole Corporate and Investment Bank, as administrative agent, in the case of each of the foregoing clauses (x) and (y), as any such agreement may be amended, supplemented, extended, refinanced, renewed or replaced.

 

Section 1.2                                    Other Defined Terms.  In addition to the definitions set forth in Section 1.1 above, the following terms shall have the respective meanings given in the Sections of this Supplemental Indenture set forth below:

 

	
Defined Term
    	
 
    	
Section
    
	
Additional   Notes
    	
 
    	
2.6
    
	
Bankruptcy   Default
    	
 
    	
6.1
    
	
Base   Indenture
    	
 
    	
Recitals
    
	
Change   of Control Offer
    	
 
    	
8.1
    
	
Change   of Control Payment
    	
 
    	
8.1
    
	
Change   of Control Payment Date
    	
 
    	
8.1
    
	
Company
    	
 
    	
Recitals
    
	
Event   of Default
    	
 
    	
6.1
    
	
Future   Supplemental Indenture
    	
 
    	
Recitals
    
	
Notes
    	
 
    	
Recitals
    
	
property
    	
 
    	
5.1
    
	
Successor   Company
    	
 
    	
Section 5.3
    
	
Supplemental   Indenture
    	
 
    	
Recitals
    
	
Threshold   Amount
    	
 
    	
6.1
    
	
Trustee
    	
 
    	
Recitals
    

 

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ARTICLE 2
 TERMS AND DESCRIPTION OF NOTES

 

Section 2.1                                    Indenture.  The changes, modifications and supplements to the Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and shall only govern the terms of, the Notes that may be issued from time to time, and shall not apply to any other Securities that may be issued under the Indenture unless an Officers’ Certificate or supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements. The provisions of this Supplemental Indenture shall supersede any conflicting provisions in the Indenture with respect to the Notes.

 

Section 2.2                                    Designation and Amount.  There is hereby authorized and established a series of Securities under the Indenture, designated as the “3.875% Senior Notes due 2021.” The aggregate principal amount of Notes that may be authenticated and delivered under the Indenture is initially limited to $500,000,000, except upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 3.04, 3.05, 3.06, 9.06 or 11.07 of the Base Indenture and any Notes that, pursuant to Section 3.03 of the Base Indenture, are deemed never to have been authenticated and delivered, and subject to the Company’s ability to issue Additional Notes pursuant to Section 2.6.

 

Section 2.3                                    Form of Notes.  The Notes are to be substantially in the form set forth in Exhibit A hereto.  The Notes will initially be issued as Global Securities and registered in the name of Cede & Co., the nominee of DTC.

 

Section 2.4                                    Maturity.  The Stated Maturity of principal of the Notes is April 1, 2021.

 

Section 2.5                                    Denominations Of Notes.  The Notes shall be issuable in registered form without coupons in a minimum denomination of $2,000 or integral multiples of $1,000 in excess thereof.

 

Section 2.6                                    Additional Notes.  Pursuant to Section 3.01 of the Base Indenture, the Company may, from time to time reopen the series and issue additional Notes (the “Additional Notes”) without notice to or consent of the Holders; provided, that such Additional Notes are fungible with the Notes issued on the Issue Date or are issued under separate CUSIP numbers (or other relevant identifying numbers); provided, further, that the Company will not be permitted to issue Additional Notes if, at the time of such issuance, the Company is not in compliance with Article 5 and Article 8.  The Notes and any such Additional Notes shall be consolidated and form a single series of Securities and shall vote together as one class on all matters.

 

Section 2.7                                    Interest.  The Notes will bear interest at the rate of 3.875% per annum. Interest payable on each Interest Payment Date will include interest accrued from (and including) the Issue Date, or from (and including) the most recent date to which interest has been paid or duly provided for, to (but excluding) the applicable Interest

 

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Payment Date or the Maturity, as the case may be. The Interest Payment Dates for the Notes are April 1 and October 1 commencing on October 1, 2014 and ending on April 1, 2021; and the Regular Record Date for the interest payable on any Interest Payment Date is the March 15 or September 15, as the case may be, next preceding the relevant Interest Payment Date.

 

Section 2.8                                    Paying Agent, Registrar, Place of Payment.  The Company initially appoints the Trustee to act as Paying Agent and Security Registrar for the Notes, initially designates the corporate trust office of the Trustee located in The City of New York as the Place of Payment for the Notes and the office or agency described in Section 10.02 of the Base Indenture and initially designates DTC as the Depositary for the Notes.  The Company may change the Paying Agent, the Security Registrar, the Depositary or the Place of Payment without prior notice to or consent of the Holders, and the Company or any of its Subsidiaries may act as Paying Agent or Security Registrar.  The Company will pay principal of, premium, if any, and interest on Notes in global form registered in the name of or held by DTC or its nominee in immediately available funds to DTC or its nominee, as the case may be, as the Holder of such Global Security.

 

Section 2.9                                    Sinking Fund.  The Notes shall not be entitled to the benefit of any sinking fund.

 

ARTICLE 3
 SATISFACTION AND DISCHARGE

 

Section 3.1                                    Satisfaction and Discharge of Indenture.  Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 4.01 of the Base Indenture is amended and restated in its entirety as follows with respect to the Notes:

 

(a)                                 The Indenture will be discharged as to all Notes and will cease to be of further effect as to all Notes, when either:

 

(i)                                     all Notes that have been authenticated and delivered (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust) have been delivered to the Trustee for cancellation; or

 

(ii)                                  (A) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the giving of a notice of redemption or otherwise, will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient to pay and discharge

 

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the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption, as the case may be; (B) no Default or Event of Default has occurred and is continuing on the date of such deposit or will occur as a result of such deposit (other than a Default or an Event of Default resulting from the borrowing of funds to be applied to make such deposit and any similar and simultaneous deposit relating to other indebtedness and, in each case, the granting of Liens in connection therewith) and the deposit will not result in a breach or violation of, or constitute a default under, any material agreement or material instrument (other than the Indenture) to which the Company is a party or by which the Company is bound; (C) the Company has paid or caused to be paid all sums payable or due and owing by the Company under the Indenture; and (D) the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the Redemption Date, as the case may be.

 

(b)                                 In addition, the Company shall deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) stating that all conditions precedent to satisfaction and discharge have been satisfied.

 

(c)                                  Notwithstanding the satisfaction and discharge of the Indenture, the obligations of the Company to the Trustee under Section 6.07 of the Base Indenture, the obligations of the Trustee to any Authenticating Agent under Section 6.14 of the Base Indenture and, if money shall have been deposited with the Trustee pursuant to subclause (ii)(A) of clause (a) of this Section 3.1, the obligations of the Trustee under Section 4.02 of the Base Indenture and the last paragraph of Section 10.03 of the Base Indenture shall survive.

 

ARTICLE 4
 AMENDMENTS AND WAIVERS

 

Section 4.1                                    Supplemental Indentures without Consent of Holders.  Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 9.01 of the Base Indenture is hereby amended with respect to the Notes by the following:

 

(a)                                 replacing the language in clause (d) thereof with “to add to or change any of the provisions of the Indenture or the terms of the Notes to such extent as shall be necessary to permit or facilitate the issuance of Notes in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Notes in uncertificated form; provided, in each case, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code of 1986, as amended”; and

 

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(b)                                 replacing the word “indenture” in clause (q) thereof with “Indenture.”

 

Section 4.2                                    Supplemental Indentures with Consent of Holders.  Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 9.02 of the Base Indenture is hereby amended with respect to the Notes by the following:

 

(a)                                 replacing the period at the end of clause (c) thereof with “, or”; and

 

(b)                                 adding a new clause (d) after the end of clause (c) thereof, as follows: “(d) reduce the premium payable upon the redemption or repurchase of any Note or change the time at which any Note may be redeemed or repurchased as described in Article 8 or Article 9 of the Supplemental Indenture whether through an amendment or waiver of provisions in the covenants, definitions or otherwise (except amendments to the definition of “Change of Control” or “Below Investment Grade Ratings Event”).”

 

ARTICLE 5
 CERTAIN COVENANTS OF THE COMPANY

 

Section 5.1                                    Limitation on Liens.  The Company will not, and will not permit any Subsidiary to, at any time pledge or otherwise subject to any Lien any of its or such Subsidiary’s property, tangible or intangible, real or personal (hereinafter “property”), without thereby expressly securing the Notes (together, if the Company so chooses, with any other securities entitled to the benefit of a similar covenant) equally and ratably with any and all other indebtedness for borrowed money or Capital Lease, including any guarantee, secured by such Lien, so long as any such other indebtedness or Capital Lease shall be so secured, and the Company covenants that if and when any such Lien is created, the Notes will be so secured thereby; provided, that, the foregoing shall not apply to any Lien on any property existing as of the Issue Date or to the following Liens securing indebtedness for borrowed money or Capital Leases, including any guarantee:

 

(a)                                 any Lien on any property (including Aircraft Assets and Capital Stock in any Special Purpose Aircraft Financing Entity) securing Non-Recourse Indebtedness;

 

(b)                                 any Lien on any property (including Aircraft Assets and Capital Stock in any Special Purpose Aircraft Financing Entity) (i) existing at the time of acquisition of such property or the entity owning such property (including acquisition through merger or consolidation), or (ii) given to secure the payment of all or any part of the purchase, lease or acquisition thereof or the cost of construction, repair, refurbishment, modification or improvement of property (including Aircraft Assets and Capital Stock in any Special Purpose Aircraft Financing Entity) or to secure any indebtedness (including ECA Indebtedness) or Capital Lease incurred prior thereto, at the time of, or within 180 days (18 months in the case of Aircraft Assets and Capital Stock in any Special Purpose Aircraft Financing Entity) after, the acquisition, construction, repair,

 

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refurbishment, modification or improvement of property (including Aircraft Assets and Capital Stock in any Special Purpose Aircraft Financing Entity) for the purpose of financing all or part of the purchase, lease or acquisition thereof or the cost of construction, repair, refurbishment, modification or improvement;

 

(c)                                  Liens by a Subsidiary as security for indebtedness owed to the Company or any Subsidiary;

 

(d)                                 a banker’s lien or right of offset of the holder of such indebtedness in favor of any lender of moneys or holder of commercial paper of the Company or any Subsidiary in the ordinary course of business on moneys of the Company or such Subsidiary deposited with such lender or holder in the ordinary course of business;

 

(e)                                  any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien existing on the Issue Date or referred to in the foregoing clauses including in connection with the refinancing of indebtedness of the Company and its Subsidiaries secured by such Lien; and

 

(f)                                   other Liens not permitted by any of the foregoing clauses (a) through (e) on any property, now owned or hereafter acquired; provided, that, no such Liens shall be incurred pursuant to this subsection (f) if the aggregate principal amount of outstanding indebtedness (without duplication for any guarantee of such indebtedness) and Capital Leases secured by Liens incurred pursuant to this subsection (f) subsequent to the Issue Date, including the Lien proposed to be incurred, shall exceed 20% of Consolidated Tangible Assets after giving effect to such incurrence and the use of proceeds of such indebtedness or Capital Leases.

 

(g)                                  For the avoidance of doubt, nothing in this Section 5.1 shall limit Liens that do not secure indebtedness for borrowed money or Capital Leases.

 

Section 5.2                                    Release of Liens.  Any Lien that is granted to secure the Notes pursuant to Section 5.1 shall be automatically released and discharged at the same time as the release (other than through the exercise of remedies with respect thereto) of each Lien that gave rise to such obligation to secure the Notes under Section 5.1.

 

Section 5.3                                    Merger, Consolidation or Sale of All or Substantially All Assets.  Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 8.01 of the Base Indenture is hereby amended and restated in its entirety as follows with respect to the Notes by this Section 5.2:

 

(a)                                 The Company will not consolidate with or merge with or into or wind up into (whether or not the Company is the surviving corporation), or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the Company’s properties and assets, in one or more related transactions, to any Person unless:

 

(i)                                     the resulting, surviving or transferee Person (the “Successor

 

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Company”) is a Person organized and existing under the laws of the United States of America, any state or territory thereof or the District of Columbia;

 

(ii)                                  the Successor Company (if other than the Company) expressly assumes all of the obligations of the Company under the Notes and the Indenture pursuant to a supplemental indenture;

 

(iii)                               immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

 

(iv)                              the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, winding up or disposition, and such supplemental indenture, if any, comply with the Indenture.

 

(b)                             The Company will be released from its obligations under the Indenture and the Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture and the Notes; provided, that in the case of a lease of all or substantially all its assets, the Company will not be released from the obligation to pay the principal of and interest on the Notes.

 

(c)                                  For purposes of this Section 5.2, Aircraft Asset leasing in the ordinary course of business of the Company or any of its Subsidiaries shall not be considered the leasing of “all or substantially all” of the Company’s consolidated assets.

 

ARTICLE 6
 DEFAULTS AND REMEDIES

 

Section 6.1                                    Events of Default.  Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 5.01 of the Base Indenture is hereby amended and restated in its entirety as follows with respect to the Notes by this Section 6.1:

 

Each of the following is an “Event of Default”:

 

(a)                                 default in any payment of interest on any Note when due, which default continues for a period of 30 days;

 

(b)                                 default in the payment of principal of, or premium, if any, on any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

 

(c)                                  default in the performance, or breach, of any covenant or warranty of the Company in the Indenture with respect to the Notes (other than a covenant or warranty with respect to which a default in performance or breach is elsewhere in this Section 6.1 specifically addressed or which covenant or warranty has been included in the Indenture solely for the benefit of one or more series of notes other than the Notes), and

 

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continuance of such default or breach for a period of 90 consecutive days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Notes, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under the Indenture;

 

(d)                                 default under any mortgage, indenture (including the Indenture) or instrument under which there is issued, or which secures or evidences, any indebtedness for borrowed money of the Company (or the payment of which is guaranteed by the Company) (other than indebtedness owed to any Subsidiary or Non-Recourse Indebtedness of the Company) now existing or hereafter created, which default shall constitute a failure by the Company to pay principal in an amount exceeding $100.0 million (the “Threshold Amount”) when due and payable by the Company at final stated maturity, after expiration of any applicable grace period with respect thereto (such default, a “payment default”), or shall have resulted in an aggregate principal amount of such indebtedness exceeding the Threshold Amount becoming due and payable by the Company prior to the date on which it would otherwise have become due and payable (such default, an “acceleration default”); provided, however, that in connection with any series of the Convertible Notes, (i) any conversion of such indebtedness by a holder thereof into shares of common stock, cash or a combination of cash and shares of common stock, (ii) the rights of holders of such indebtedness to convert into shares of common stock, cash or a combination of cash and shares of common stock and (iii) the rights of holders of such indebtedness to require any repurchase by the Company of such indebtedness in cash upon a fundamental change shall not, in itself, constitute an Event of Default hereunder; or

 

(e)                                  (i)                                     the Company, pursuant to or within the meaning of any Bankruptcy Law: (A) commences proceedings to be adjudicated bankrupt or insolvent; (B) consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking an arrangement of debt, reorganization, dissolution, winding up or relief under applicable Bankruptcy Law; (C) consents to the appointment of a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property; (D) makes a general assignment for the benefit of its creditors; or (E) makes an admission in writing of its inability to pay its debts generally as they become due; or

 

(ii)                                  a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in a proceeding in which the Company is to be adjudicated bankrupt or insolvent; (B) appoints a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or other similar official of the Company; or (C) orders the liquidation, dissolution or winding up of the Company; and the order or decree remains unstayed and in effect for 90 consecutive days (any such Event of Default specified in this clause (e), for purposes of the Notes, shall constitute a “Bankruptcy Default”).

 

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Within 60 days following the date on which the Company becomes aware of a Default or receives notice of such Default, as applicable, if such Default is continuing, the Company shall deliver a certificate to the Trustee specifying any events which would constitute a Default, their status and what action the Company is taking or proposing to take in respect thereof.

 

In the event of a declaration of acceleration of the Notes solely because an Event of Default described in Section 6.1(d) above has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically rescinded and annulled if (i) the default or defaults triggering such Event of Default pursuant to Section 6.1(d) shall be remedied or cured by the Company or waived by the holders of the relevant indebtedness within 30 days after the declaration of acceleration with respect thereto; (ii) the rescission and annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and (iii) all Events of Default with respect to Notes, except non-payment of principal of, or premium, if any, or interest on, the Notes that have become due solely by such declaration of acceleration of the Notes of such series, have been cured or waived as provided in the Indenture.

 

Section 6.2                                    Acceleration.

 

(a)                                 Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, the first three paragraphs of Section 5.02 of the Base Indenture are hereby replaced with the following with respect to the Notes:

 

“If an Event of Default (other than an Event of Default described in Section 6.1(e) of the Supplemental Indenture) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then Outstanding Notes may declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes to be due and payable by notice in writing to the Company (and to the Trustee if given by Holders). Upon such a declaration, such principal, premium, if any, and accrued and unpaid interest, if any, will be due and payable immediately.

 

If an Event of Default described in Section 6.1(e) occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.”

 

(b)                                 Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, the fourth paragraph of Section 5.02 of the Base Indenture is hereby amended by replacing the period at the end of clause (b) thereof with “; and” and adding the following clause (c) thereafter: “(c) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction.”

 

16

 

Section 6.3                                    Control by Holders.  Notwithstanding Section 5.12 of the Base Indenture, the Trustee may refuse to follow any direction that conflicts with any law, rule, regulation or court order or the Indenture or the Notes, or that the Trustee determines in good faith is unduly prejudicial to the rights of any Holder or that would involve the Trustee in personal liability. Any application by the Trustee for written instructions from the requisite amount of Holders may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under the Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions from the requisite amount of Holders in response to such application specifying the action to be taken or omitted.

 

Section 6.4                                    Waivers.  It shall not be necessary for any Act of Holders to approve the particular form of any waiver, but it shall be sufficient if such Act shall approve the substance thereof.  A consent to any waiver by any Holder given in connection with a sale, tender or exchange of such Holder’s Notes will not be rendered invalid by such sale, tender or exchange.

 

ARTICLE 7
 DEFEASANCE

 

Section 7.1                                    Covenant Defeasance.  The covenants provided pursuant to Section 3.01(r), 9.01(b) or 9.01(g) of the Base Indenture for purposes of Section 13.03 of the Base Indenture are the covenants in Article 5 and Article 8 of this Supplemental Indenture and Section 5.15 of the Base Indenture.

 

ARTICLE 8
 REPURCHASE OF NOTES AT OPTION OF HOLDERS

 

Section 8.1                                    Offer to Repurchase Upon Change of Control Repurchase Event.

 

(a)                                 If a Change of Control Repurchase Event occurs, unless the Company has exercised its right to redeem all of the Notes pursuant to Section 9.1 of this Supplemental Indenture, the Company will make an offer to purchase all of the Notes (the “Change of Control Offer”) at a purchase price in cash equal to 101% of the principal amount of the Notes plus accrued and unpaid interest, if any, to the date of purchase (the “Change of Control Payment”).   If a Note is repurchased pursuant to a Change of Control Offer on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest shall be paid to the holder of record as of such Record Date.  Within 30 days following the date upon which a Change of Control Repurchase Event occurred, or at the Company’s option, prior to any Change of Control but after the public announcement of the pending Change of Control, unless the Company has exercised its right to redeem all of the Notes pursuant to Section 9.1 of this Supplemental Indenture, the Company will mail a notice of such Change of Control Offer

 

17

 

to each Holder or otherwise give notice, which will govern the terms of the Change of Control Offer, in accordance with the applicable procedures of DTC, with a copy to the Trustee, stating:

 

(i)            that a Change of Control Offer is being made pursuant to this Section 8.1 and that all Notes validly tendered pursuant to such Change of Control Offer will be accepted for purchase by the Company at a purchase price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to the date of purchase ;

 

(ii)           the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed or given, other than as may be required by law) (the “Change of Control Payment Date”);

 

(iii)          if sent prior to the date of consummation of the Change of Control, that the Change of Control Offer is conditioned on the Change of Control being consummated on or prior to the Change of Control Payment Date; provided, that if a Change of Control is consummated after a proposed Change of Control Payment Date and such Change of Control Offer is therefore not consummated, the Company shall make a Change of Control Offer in accordance with this Section 8.1 within 30 days following the later of the consummation of such Change of Control or a Below Investment Grade Rating Event;

 

(iv)          that Notes must be tendered in multiples of $1,000, and any Note not validly tendered will remain outstanding and continue to accrue interest;

 

(v)           that, unless the Company defaults in the payment of the Change of Control Payment, any Note accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on and after the Change of Control Payment Date;

 

(vi)          that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent specified in the notice at the address specified in the notice, or transfer their Notes to the Paying Agent by book-entry transfer pursuant to the applicable procedures of the Paying Agent, prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

(vii)         that Holders shall be entitled to withdraw their tendered Notes and their election to require the Company to purchase such Notes; provided, that the Paying Agent receives at the address specified in the notice, not later than the close of business on the 30th day following the date of the Change of Control notice, a telegram, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

 

(viii)        that if a Holder is tendering less than all of its Notes, such Holder will be issued new Notes equal in principal amount to the unpurchased portion of the

 

18

 

Notes surrendered (the unpurchased portion of the Notes must be equal to $2,000 or an integral multiple of $1,000 in excess thereof); and

 

(ix)          the other instructions, as determined by the Company, consistent with this Section 8.1 that a Holder must follow.

 

The notice, if mailed or given in a manner herein provided, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. If (A) the notice is mailed or given in a manner herein provided and (B) any Holder fails to receive such notice or a Holder receives such notice but it is defective, such Holder’s failure to receive such notice or such defect shall not affect the validity of the proceedings for the purchase of the Notes as to all other Holders that properly received such notice without defect.

 

(b)           On the Change of Control Payment Date, the Company will, to the extent lawful:

 

(i)            accept for payment all Notes or portions of Notes (of integral multiples of $1,000) validly tendered pursuant to the Change of Control Offer;

 

(ii)           deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes so tendered;

 

(iii)          deliver or cause to be delivered to the Trustee for cancellation the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company in accordance with this Section 8.1; and

 

(iv)          deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the Indenture relating to the making of such Change of Control Payment have been complied with.

 

(c)           The Paying Agent will promptly pay to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate, upon receipt of an authentication order, and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each such new Note will be in a principal amount of $2,000 or integral multiples of $1,000 in excess thereof.

 

(d)           If the Change of Control Payment Date is on or after a Regular Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest to the Change of Control Payment Date will be paid on the relevant Interest Payment Date to the Person in whose name a Note is registered at the close of business on such Regular Record Date.

 

19

 

(e)           Prior to making a Change of Control Payment, and as a condition to such payment (i) the requisite holders of each issue of indebtedness issued under an indenture or other agreement that would be violated by the making of such payment shall have consented to such Change of Control Payment being made and waived the event of default, if any, caused by the Change of Control or (ii) the Company will repay all outstanding indebtedness issued under an indenture or other agreement that would be violated by the making of a Change of Control Payment or the Company will offer to repay all such indebtedness, make payment to the holders of such indebtedness that accept such offer and obtain waivers from the requisite remaining holders of such indebtedness of any event of default arising under the relevant indenture or other agreement as a result of the Change of Control. The Company covenants to effect such repayment or obtain such consent prior to making a Change of Control Payment, it being a default of this Section 8.1 if the Company fails to comply with such covenant.

 

(f)            The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 8.1 applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

 

(g)           The Company will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue of the conflict.

 

(h)           Other than as specifically provided in this Section 8.1, any purchase pursuant to this Section 8.1 shall be made pursuant to the provisions of Sections 11.03, 11.05 and 11.07 of the Base Indenture.

 

(i)            Notwithstanding anything to the contrary in the foregoing clauses (a) though (h), the Company’s obligation to make a Change of Control Offer may, subject to Section 4.2(b) of this Supplemental Indenture, be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes.

 

ARTICLE 9
 OPTIONAL REDEMPTION

 

Section 9.1            Optional Redemption.

 

(a)           At any time prior to March 2, 2021, the Company may redeem the Notes, in whole or in part, upon notice pursuant to Section 11.04 of the Base Indenture, at a Redemption Price equal to 100% of the aggregate principal amount of the Notes plus the Applicable Premium, plus accrued and unpaid interest, if any, to the Redemption Date. Promptly after the determination thereof, the Company shall give the Trustee

 

20

 

written notice of the Redemption Price provided for in this Section 9.1(a), and the Trustee shall not be responsible for such calculation.  On and after March 2, 2021, the Company may redeem the Notes in whole or in part at a Redemption Price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the Redemption Date.  If a Note is redeemed on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest shall be paid to the holder of record as of such Record Date.  Unless the Company defaults in payment of the Redemption Price, from and after the Redemption Date, interest will cease to accrue on the Notes or portions thereof called for redemption.

 

(b)           Except pursuant to clause (a) of this Section 9.1, the Notes shall not be redeemable at the Company’s option prior to April 1, 2021.

 

(c)           Any redemption pursuant to this Section 9.1 shall be made pursuant to the provisions of Sections 11.01 through 11.07 of the Base Indenture; provided, that the words “by such method as the Trustee shall deem fair and appropriate and” in Section 11.03 of the Base Indenture shall be replaced with “by lot.”

 

(d)           Any redemption notice may, at the Company’s discretion, be subject to one or more conditions precedent, including completion of a corporate transaction.

 

(e)           The Company may acquire Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture.

 

Section 9.2            Modification of Base Indenture.  Except as may be provided in a Future Supplemental Indenture, for the benefit of the Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section 11.06 of the Base Indenture is hereby amended by deleting the words “Record Dates” and replacing them with “Regular Record Date.”

 

ARTICLE 10
 MISCELLANEOUS PROVISIONS

 

Section 10.1          Governing Law.  This Supplemental Indenture and each Note shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Section 10.2          Effect of Headings.  The article and section headings herein and in the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 10.3          Severability.  In case any one or more of the provisions contained in the Indenture, this Supplemental Indenture or the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of the Indenture, this Supplemental Indenture or the Notes, but the Indenture, this Supplemental Indenture and the Notes shall

 

21

 

be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

Section 10.4          Ratification of Indenture.  The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided; provided, however, that the provisions of this Supplemental Indenture shall apply solely to the Notes.

 

Section 10.5          Trustee Not Responsible for Recitals.  The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof.  The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture

 

Section 10.6          Waiver of Jury Trial.  Section 1.15 of the Base Indenture is hereby incorporated herein.

 

Section 10.7          Counterparts.  This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

 

22

 

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

	
 
    	
AIR   LEASE CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Gregory B. Willis
    
	
 
    	
 
    	
Name:
    	
Gregory   B. Willis
    
	
 
    	
 
    	
Title:   
    	
Senior   Vice President and Chief 
    
	
 
    	
 
    	
Financial   Officer
    

 

[Signature Page to Fourth Supplemental Indenture]

 

 

	
 
    	
DEUTSCHE   BANK TRUST COMPANY 
   AMERICAS, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Diana Vasconez
    
	
 
    	
 
    	
Name:
    	
Diana   Vasconez
    
	
 
    	
 
    	
Title:
    	
Associate
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ Mark Esposito
    
	
 
    	
 
    	
Name:
    	
 Mark Esposito
    
	
 
    	
 
    	
Title:
    	
Assistant   Vice President
    

 

[Signature Page to Fourth Supplemental Indenture]

 

 

Exhibit A

 

Form of Note

 

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO AIR LEASE CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

AIR LEASE CORPORATION

 

**************************

 

3.875% Senior Notes due 2021

 

CUSIP: [              ]

 

ISIN: [                  ]

 

	
 
    	
 
    	
 
    	
 
    
	
No. [    ]
    	
 
    	
 
    	
$[          ]
    
	
 
    	
 
    	
(as revised by the Schedule of Increases and

 Decreases in Global Security   attached hereto)
    

 

AIR LEASE CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., the registered Holder hereof, the principal sum of [        ] Dollars ($[            ]) (as revised by the Schedule of Increases and Decreases in Global Security attached hereto) on April 1, 2021 and to pay interest thereon from and including [        ] or from and including the most recent date to which interest has been paid or duly provided for, semi-annually on April 1 and October 1 in each year, commencing [        ], or, if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”), at the rate of 3.875% per annum (the “Interest Rate”), until the principal hereof is paid or made available for payment; provided that any principal, and any such installment of interest, that is overdue shall bear interest at the Interest Rate (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest so payable but not so punctually paid or duly provided for on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and, at the Company’s election, may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof to be given to Holders of Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture.

 

Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained for that purpose in The City of New York, New York (or, if the Company does not maintain such office or agency, at the corporate trust office of the Trustee in The City of New York or if the Trustee does not maintain an office in The City of New York, at the office of a Paying Agent in The City of New York), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of principal and interest on Global Securities shall be made by wire transfer in accordance with the procedures of the Depositary.

 

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature of one or more authorized signatories, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
Dated:   [          ] 
    	
AIR   LEASE CORPORATION
    
	
 
    
	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
					

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION
 This is one of the Securities of the series designated therein

referred to in the within-mentioned Indenture.

 

	
DEUTSCHE   BANK TRUST COMPANY AMERICAS,
    
	
as   Trustee
    
	
 
    
	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    

 

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized series of securities of the Company designated as the “3.875% Senior Notes due 2021” (herein called the “Notes”), issued under an Indenture, dated as of October 11, 2012 (herein called the “Base Indenture”), as supplemented by the Fourth  Supplemental Indenture dated as of March 11, 2014 (the “Fourth Supplemental Indenture”; the Base Indenture, as so supplemented, is herein called the “Indenture”), among the Company, as issuer, and Deutsche Bank Trust Company Americas, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.  This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[        ]. The Company may at any time issue Additional Notes under the Indenture in unlimited amounts having the same terms as the Notes, except as otherwise permitted by the Indenture.

 

The Notes do not have the benefit of any sinking fund obligation.

 

The Notes are redeemable prior to the Stated Maturity Date as provided in the Indenture.  In the event of redemption of this Note in part only, a new Note or Notes in an authorized denomination for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or of certain restrictive covenants and Events of Default with respect to the Notes, in each case upon compliance with certain conditions set forth in the Indenture.

 

If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes, the Holders of at least 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity or security reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of

 

 

any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or the Holder’s attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Indenture and this Note are governed by and construed in accordance with the laws of the State of New York.

 

The Notes are issuable in registered form without coupons in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes are exchangeable for a like aggregate principal amount of Notes of any authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent thereof may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Company, the Trustee or any such agent shall be affected by notice to the contrary.

 

All terms used in this Note that are not defined herein and are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

To the extent that any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

 

SCHEDULE OF INCREASES AND DECREASES IN GLOBAL SECURITY

 

The following increases or decreases in this Note have been made:

 

	
Date of decrease or 
   increase
    	
 
    	
Amount of decrease in
    principal amount of 
   this Note
    	
 
    	
Amount of increase in
    principal amount of this 
   Note
    	
 
    	
Principal amount of this 
   Note following such 
   decrease or increase
    	
 
    	
Signature of authorized 
   signatory of Trustee or 
   Security Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:

 

 

(Insert assignee’s social security or tax identification number)

 

 

 

(Insert address and zip code of assignee)

 

and irrevocably appoints                as agent to transfer this Note on the Security Register. The agent may substitute another to act for him or her.

 

Dated:                                                  Signature:

 

Signature Guarantee:

 

(Sign exactly as your name appears on the other side of this Note)

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Section 8.1 of the Fourth Supplemental Indenture, check the box below:

 

[   ] Section 8.1

 

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 8.1 of the Fourth Supplemental Indenture, state the amount you elect to have purchased:

 

	
$
    	
(integral   multiples of $1,000, provided that   the unpurchased portion must be in a minimum principal amount of $2,000)
    
	
 
    	
 
    
	
 
    	
Date:
    	
 
    	
 
    
	
 
    
	
 
    	
Your   Signature:
    	
 
    	
 
    
	
 
    	
(Sign   exactly as your name

appears   on the face of this Note)
    
	
 
    	
Tax   Identification No.:
    
	
 
    	
Signature   Guarantee*:
    	
 
    	
 
    
											

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

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