<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1998
REGISTRATION STATEMENT NO. 333-53969
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
BROOKDALE LIVING COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-4103821
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 977-3700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT J. RUDNIK, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 977-3700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
BRIAN T. BLACK, ESQ.
WINSTON & STRAWN
35 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
(312) 558-5600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as the
Registrant shall determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THIS PROSPECTUS SHALL NOT CONSTITUTE AN +
+OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY +
+SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR +
+SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE +
+SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JULY 8, 1998
$200,000,000
BROOKDALE LIVING COMMUNITIES, INC.
COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES
AND WARRANTS TO PURCHASE COMMON STOCK
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Brookdale Living Communities, Inc., a Delaware corporation (the "Company"),
may from time to time offer (i) shares of Common Stock, $0.01 par value per
share ("Common Stock"), (ii) shares of Preferred Stock, $0.01 par value per
share ("Preferred Stock"), which may be convertible or nonconvertible, (iii)
debt securities ("Debt Securities"), which may be convertible or nonconvertible
senior debt securities ("Senior Debt Securities") or subordinated (including
junior subordinated) debt securities ("Subordinated Debt Securities"), and
which may be secured or unsecured, and (iv) warrants to purchase Common Stock
("Warrants"), with an aggregate public offering price of up to $200,000,000, on
terms to be determined at the time or times of offering. The Common Stock,
Preferred Stock, Debt Securities and Warrants (collectively referred to herein
as the "Securities") may be offered, separately or together, in separate
classes or series, in amounts, at prices and on terms to be set forth in one or
more supplements to this Prospectus (each, a "Prospectus Supplement").
Information contained herein is subject to completion or amendment. A
registration statement relating to these Securities has been filed with the
Securities and Exchange Commission. These Securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these Securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
All specific terms of the offering and sale of the Securities in respect of
which this Prospectus is being delivered will be set forth in the applicable
Prospectus Supplement and will include, when applicable: (i) in the case of
Common Stock, the maximum aggregate number of shares offered and any public
offering price; (ii) in the case of Preferred Stock, the specific class,
series, title and stated value, any dividend, liquidation, redemption,
conversion, voting and other rights, any dividend payment dates, any sinking
fund provisions, the maximum aggregate number of shares offered and any public
offering price; (iii) in the case of Debt Securities, the specific title,
aggregate principal amount, denomination, form, maturity, interest rate and
time of payment, currency, ranking as Senior Debt Securities or Subordinated
Debt Securities, redemption, repayment or sinking fund provisions, terms for
conversion into Common Stock or Preferred Stock and any public offering price;
and (iv) in the case of Warrants, the duration, offering price, exercise price
and detachability features. If any Securities are offered together in the form
of units ("Units"), the specific terms of any such Units will be set forth in
the applicable Prospectus Supplement.
The applicable Prospectus Supplement will also contain information, when
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities
covered by that Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Company, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names
and any applicable purchase price, fee, commission or discount arrangement
between or among them will be set forth in or will be calculable from the
information set forth in the applicable Prospectus Supplement. No Securities
may be sold without delivery of the applicable Prospectus Supplement describing
the method and terms of the offering of those Securities. See "Plan of
Distribution" for possible indemnification arrangements with underwriters,
dealers and agents.
The Common Stock is traded on the Nasdaq National Market under the symbol
"BLCI."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of the Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is July , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with the Securities
and Exchange Commission (the "Commission") with respect to the Securities.
This Prospectus which constitutes part of the Registration Statement does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Statements contained herein concerning the
provisions of any documents are not necessarily complete and, in each
instance, reference is made to the copy of such documents filed as an exhibit
to the Registration Statement, and each such statement shall be deemed
qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: Northeast Regional Office, 7 World Trade Center, Suite 1300, New
York, New York 10048; and Midwest Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can also be obtained from the Public Reference Section of the Commission, at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Company is subject to the electronic filing requirements of the Commission.
Accordingly, pursuant to the rules and regulations of the Commission, certain
documents, including annual and quarterly reports and proxy statements, filed
by the Company with the Commission have been or will be filed electronically.
The Commission maintains a World Wide Web site that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the Commission at http://www.sec.gov. The Company's
Common Stock is listed on the Nasdaq National Market under the symbol BLCI,
and such reports, proxy statements and other information can also be inspected
at the offices of the Nasdaq National Market, 1735 K Street, N.W., Washington,
D.C. 20006. This Prospectus does not contain all the information set forth in
the Registration Statement and exhibits thereto which the Company has filed
with the Commission under the Securities Act.
INFORMATION INCORPORATED BY REFERENCE
The following documents, each of which has been filed with the Commission by
the Company, are incorporated, as of their respective dates, into this
Prospectus by reference:
(a) The Company's Annual Report on Form 10-K (File No. 0-22253) for the
fiscal year ended December 31, 1997, as filed with the Commission on March
31, 1998 under the Exchange Act;
(b) The Company's Quarterly Report on Form 10-Q (File No. 0-22253) for
the quarter ended March 31, 1998, as filed with the Commission on May 15,
1998;
(c) The Company's Current Reports on Form 8-K (File No. 0-22253) dated
December 17, 1997, March 6, 1998, March 31, 1998 and May 12, 1998, as filed
with the Commission on February 18, 1998, April 14, 1998, April 15, 1998
and May 26, 1998, respectively; and
(d) The description of the Company's Common Stock, par value $0.01 per
share, contained in Amendment No. 1 to the Company's Registration Statement
on Form 8-A, as filed with the Commission on April 17, 1997 under the
Exchange Act.
All documents subsequently filed with the Commission by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering of the Securities registered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent
2
<PAGE>
that a statement contained herein or in any other subsequently filed document
which is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any and all of the information that has been incorporated by reference in
this Prospectus, excluding exhibits. Such requests should be directed to
Brookdale Living Communities, Inc., 77 West Wacker Drive, Suite 4400, Chicago,
Illinois 60601, Telephone: (312) 977-3700.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Prospectus contains, any Prospectus Supplement will contain, and the
documents incorporated by reference herein contain or will contain certain
statements which constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. When used in this
Prospectus or any Prospectus Supplement, the words "believes," "expects,"
"anticipates," "estimates" and similar words and expressions are generally
intended to identify forward-looking statements. Statements that describe the
Company's future strategic plans, goals or objectives are also forward-looking
statements. Readers of this Prospectus or any Prospectus Supplement are
cautioned (a) that any forward-looking statements, including those regarding
the intent, belief, or current expectations of the Company or management, are
not guarantees of future performance, results or events and involve risks and
uncertainties, such as quarterly fluctuations in operating results and
occupancy levels in markets in which the Company competes, the successful
integration of newly acquired and leased facilities with the operations of the
Company's other facilities, achievement of development timetables and/or
unanticipated changes in expenses or capital expenditures, and (b) that actual
results and events may differ materially from those in the forward-looking
statements as a result of various factors including, but not limited to (i)
general economic conditions in the markets in which the Company operates, (ii)
competitive pressures within the industry and/or the markets in which the
Company operates, (iii) the effect of future legislation or regulatory changes
on the Company's operations and (iv) other factors described in "Risk Factors"
contained in any Prospectus Supplement. The forward-looking statements
included in this Prospectus are made only as of the date of this Prospectus.
The Company undertakes no obligation to update such forward-looking statements
to reflect subsequent events or circumstances.
THE COMPANY
The Company provides senior independent and assisted living services to the
elderly through its facilities located in urban and suburban areas of major
metropolitan markets. The Company was incorporated in Delaware in September
1996 to continue and expand the business and operations of the senior
independent and assisted living division of The Prime Group, Inc. and certain
of its affiliates (collectively, "PGI"), which, since 1985, had been involved
in the development, construction, marketing and operation of senior
independent and assisted living facilities for the elderly. The Company's
principal executive offices are located at 77 West Wacker Drive, Suite 4400,
Chicago, Illinois 60601, and its telephone number is (312) 977-3700.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities will be
used for general corporate purposes, which may include funding capital
expenditures, acquisitions, developments, lease security deposits, reducing
short-term borrowings, and general working capital needs. Pending such uses,
the Company may temporarily invest the net proceeds in interest-bearing
securities.
3
<PAGE>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
The following table sets forth the ratio of earnings to combined fixed
charges of the Company and its consolidated subsidiaries for the periods
indicated.
<TABLE>
<CAPTION>
THE PREDECESSOR PROPERTIES (1) THE COMPANY
- --------------------------------------------------- --------------------------------
YEAR ENDED DECEMBER
31, JANUARY 1, 1997 THREE MONTHS MAY 7, 1997 THREE MONTHS
- -------------------- TO ENDED TO ENDED
1993 1994 1995 1996 MAY 6, 1997 MARCH 31, 1997 DECEMBER 31, 1997 MARCH 31, 1998
- ---- ---- ---- ---- --------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- -- -- 1.44 -- -- -- 1.34
</TABLE>
- --------
(1) As used herein, the Predecessor Properties refers to the former senior
independent and assisted living division of The Prime Group, Inc. and
certain of its affiliates, collectively the predecessor in interest to the
Company.
For purposes of calculating the ratio of earnings to fixed charges,
"earnings" include income before income taxes, extraordinary items and the
cumulative effects of changes in accounting principles and combined fixed
charges. "Combined fixed charges" consist of interest on all indebtedness and
that portion of rental expense that management believes to be representative
of interest. The Predecessor Properties' historical earnings were insufficient
to cover fixed charges by approximately $2.1 million, $3.4 million, $1.4
million, $0.3 million and $0.2 million for the years ended December 31, 1993,
1994, 1995, the period from January 1, 1997 to May 6, 1997 and the three
months ended March 31, 1997, respectively. The Company's historical earnings
were insufficient to cover fixed charges by approximately $0.1 million for the
period from May 7, 1997 to December 31, 1997.
DESCRIPTION OF CAPITAL STOCK
The Company's Restated Certificate of Incorporation (the "Certificate")
provides that the authorized capital stock of the Company consists of
75,000,000 shares of Common Stock and 20,000,000 shares of Preferred Stock,
par value $0.01 per share (the "Preferred Stock"). As of December 31, 1997,
9,475,000 shares of Common Stock were issued and outstanding, and no shares of
Preferred Stock were issued or outstanding.
COMMON STOCK
Each holder of Common Stock is entitled to one vote for each share on all
matters submitted to a vote of stockholders. The Certificate does not provide
for cumulative voting, and accordingly, the holders of a majority of the
shares of Common Stock entitled to vote in any election of directors may elect
all of the directors standing for election. The Certificate provides that
whenever there is paid, or declared and set aside for payment, to the holders
of the outstanding shares of any class of stock having preference over the
Common Stock as to the payment of dividends, the full amount of dividends and
of sinking fund or retirement fund or other retirement payments, if any, to
which such holders are entitled, then dividends may be paid on the Common
Stock out of any assets legally available therefor, but only when and as
declared by the Board of Directors. The Certificate also provides that in the
event of any liquidation, dissolution or winding up of the Company, after
there is paid to or set aside for the holders of any class of stock having
preference over the Common Stock the full amount to which such holders are
entitled and after payment or provision for payment of all debts and
liabilities of the Company, the holders of the Common Stock shall be entitled
to receive the remaining assets of the Company available for distribution, in
cash or in kind. The holders of Common Stock have no preemptive, subscription,
redemption or conversion rights. The rights, preferences and privileges of
holders of Common Stock will be subject to the rights of the holders of any
shares of any series of Preferred Stock that the Company may issue in the
future having preference over the Common Stock with respect to such matters.
PREFERRED STOCK
The following summary of the Preferred Stock does not purport to be complete
and is qualified in its entirety by reference to the Certificate or the
applicable Certificate of Designations of Preferred Stock, the form of which
will be filed as, or will be incorporated by reference as, an exhibit to the
Registration Statement of which this Prospectus is a part in connection with
the issuance of such series of Preferred Stock. The particular terms of any
series of Preferred Stock, whether convertible or nonconvertible, will be
described in the applicable Prospectus Supplement.
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<PAGE>
The Certificate provides that the Board of Directors of the Company is
authorized to issue Preferred Stock in series and to fix and state the voting
powers, and such designations, preferences and relative participating,
optional or other special rights of the shares of each such series and the
qualifications, limitations and restrictions thereof. Such action may be taken
by the Board without stockholder approval. Under the Certificate, each share
of each series of Preferred Stock is to have the same relative rights as, and
be identical in all respects with, all other shares of the same series. While
providing flexibility in connection with possible financings, acquisitions and
other corporate purposes, the issuance of Preferred Stock, among other things,
could adversely affect the voting power of the holders of Common Stock and,
under certain circumstances, be used as a means of discouraging, delaying or
preventing a change in control of the Company.
REGISTRATION RIGHTS AGREEMENT
The Company has granted demand and incidental registration rights to The
Prime Group, Inc. and certain of its affiliates (collectively, "PGI") for the
registration of shares of Common Stock owned by PGI under the Securities Act.
Three demand registrations are permitted during the first five years following
the initial public offering of the Common Stock and one registration per year
each year thereafter until PGI owns less than 10% of the outstanding Common
Stock. The Company will pay the fees and expenses of the demand registrations
and the incidental registrations, while PGI will pay all underwriting
discounts and commissions. These registration rights are subject to certain
conditions and limitations, including the right of underwriters to limit the
number of shares owned by PGI included in such registration.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is LaSalle National
Bank, and the transfer agent and registrar for the Preferred Stock will be set
forth in the applicable Prospectus Supplement.
CERTAIN ANTI-TAKEOVER PROVISIONS
The Certificate and the Amended and Restated By-laws of the Company (the
"By-laws") contain, among other things, certain provisions described below
that may reduce the likelihood of a change in the Board of Directors or voting
control of the Company without the consent of the Board of Directors. These
provisions could have the effect of discouraging, delaying or preventing
tender offers or takeover attempts that some or a majority of the stockholders
might consider to be in the stockholders' best interest, including offers or
attempts that might result in payment of a premium over the market price for
the Common Stock.
Classification of Board of Directors. The Certificate and the By-laws divide
the Board of Directors into three classes, designated Class I, Class II and
Class III, respectively, each class to be as nearly equal in number as
possible. The terms of Class I, Class II and Class III directors will expire
at the 2001, 1999 and 2000 annual meetings of stockholders, respectively, and
in all cases directors elected will serve until their respective successors
are elected and qualified. At each annual meeting of stockholders, directors
will be elected to succeed those in the class whose terms then expire, each
elected director to serve for a term expiring at the third succeeding annual
meeting of stockholders after such director's election, and until the
director's successor is elected and qualified. Thus, only one class of the
directors stand for re-election each year, requiring at least two
stockholders' meetings at which director are elected to replace a majority of
the Board.
Filling of Board Vacancies; Removal. Any vacancy occurring in the Board of
Directors, including any vacancy created by an increase in the number of
directors, shall be filled for the unexpired term by the concurring vote of a
majority of the directors then in office, whether or not a quorum, and any
director so chosen shall hold office for the remainder of the full term of the
class in which the new directorship was created or the vacancy occurred and
until such director's successor shall have been elected and qualified.
Directors may only be removed with cause by the affirmative vote of the
holders of at least a majority of the outstanding shares of capital stock then
entitled to vote at an election of directors.
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<PAGE>
Stockholder Action by Unanimous Written Consent. Any action required or
permitted to be taken by the stockholders must be effected at a duly called
annual or special meeting of the stockholders and may not be effected by any
consent in writing by the stockholders, unless such consent is unanimous.
Call of Special Meetings. Special meetings of stockholders may be called at
any time but only by the Board of Directors, the Chairman of the Board, the
Chief Executive Officer, the President or stockholders possessing at least 25%
of the voting power of the issued and outstanding stock entitled to vote
generally in the election of directors.
By-laws Amendments. The stockholders may amend the By-laws by the
affirmative vote of the holders of at least two-thirds of the outstanding
shares of stock of the Company entitled to vote thereon. Directors may also
amend the By-laws by a two-thirds vote of the directors then in office.
Certificate Amendments. Except as set forth in the Certificate or as
otherwise specifically required by law, no amendment of any provision of the
Certificate shall be made unless such amendment has been first proposed by the
Board of Directors upon the affirmative vote of at least two-thirds of the
directors then in office and thereafter approved by the affirmative vote of
the holders of at least a majority of the outstanding shares of stock of the
Company entitled to vote thereon; provided, however, if such amendment is to
the provisions in the Certificate relating to (i) amendments to the
Certificate, (ii) a decrease in the authorized number of shares of Preferred
Stock, (iii) the authority of the Board of Directors to issue Preferred Stock,
(iv) the number and classification of the Board of Directors of the Company,
(v) the limitation on directors' liability, (vi) amendments to the By-laws, or
(vii) stockholder meetings, such amendment must be approved by the affirmative
vote of the holders of at least two-thirds of the outstanding shares of stock
entitled to vote thereon.
Stockholder Nominations and Proposals. With certain exceptions, the By-laws
require that stockholders intending to present nominations for directors or
other business for consideration at a meeting of stockholders notify the
Company's Secretary by the later of 60 days before the date of the meeting and
15 days after the date notice of the meeting is mailed or public notice of the
meeting is given.
Certain Statutory Provisions. Section 203 of the Delaware General
Corporation Law, as amended (the "DGCL") provides, in general, that a
stockholder acquiring more than 15% of the outstanding voting shares of a
corporation subject to the statute (an "Interested Stockholder"), but less
than 85% of such shares, may not engage in certain "Business Combinations"
with the corporation for a period of three years subsequent to the date on
which the stockholder became an Interested Stockholder unless (i) before such
person became an Interested Stockholder, the corporation's board of directors
approved either the Business Combination or the transaction in which the
stockholder became an Interested Stockholder or (ii) the Business Combination
is approved by the corporation's board of directors and authorized by a vote
of at least two-thirds of the outstanding voting stock of the corporation not
owned by the Interested Stockholder.
Section 203 defines the term "Business Combination" to encompass a wide
variety of transactions with or caused by an Interested Stockholder in which
the Interested Stockholder receives or could receive a benefit on other than a
pro rata basis with other stockholders, including mergers, certain asset
sales, certain issuances of additional shares to the Interested Stockholder,
transactions with the corporation which increase the proportionate interest of
the Interested Stockholder or a transaction in which the Interested
Stockholder receives certain other benefits.
Pursuant to a Board resolution adopted at the time of formation of the
Company, the Section 203 limits do not apply to any "Business Combination"
between the Company and PGI.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate ("Offered Debt Securities"). The particular terms of the Offered
Debt Securities and the extent to which such general provisions may apply will
be described in a Prospectus Supplement relating to such Offered Debt
Securities.
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<PAGE>
Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities will constitute senior, senior subordinated or subordinated
(including, if applicable, junior subordinated) debt of the Company and will
be issued under a Senior Debt Indenture (the "Senior Debt Indenture") or a
Subordinated Debt Indenture (the "Subordinated Debt Indenture"), in each case
between the Company and a trustee to be named in the applicable Prospectus
Supplement (the "Trustee"). The Senior Debt Indenture and the Subordinated
Debt Indenture are sometimes referred to below individually as an "Indenture"
and collectively as the "Indentures." If and to the extent set forth in the
applicable Prospectus Supplement, the Debt Securities may be convertible into
Preferred or Common Stock of the Company or issued as part of Units of Debt
Securities and other Securities. If Debt Securities are to be issued as part
of Units of Debt Securities and other Securities or are to be issued in
exchange for Preferred Stock, the Prospectus Supplement will describe any
applicable material federal income tax consequences thereof.
The following summaries of certain provisions of the Indentures and the Debt
Securities do not purport to be complete. Except to the extent set forth in
the Prospectus Supplement with respect to a particular issue of Debt
Securities, the Indentures will be substantially identical, except for the
provisions relating to subordination, including the fact that Senior Debt
Securities will rank senior to the Subordinated Debt Securities.
GENERAL
The Indentures for the Debt Securities will not limit the amount of
additional indebtedness the Company or any of its subsidiaries may incur,
except as may be provided in the applicable Prospectus Supplement. The Debt
Securities will be senior or subordinated obligations of the Company, as set
forth in the accompanying Prospectus Supplement.
The applicable Prospectus Supplement will contain the following terms of and
information relating to any Debt Securities (to the extent such terms are
applicable to such Debt Securities and have not been otherwise disclosed): (a)
the specific title, aggregate principal amount, denomination and form; (b) the
date of maturity; (c) the interest rate or rates (or the method by which such
rate will be determined), if any; (d) the date from which interest will
accrue, the dates on which any such interest will be payable and the record
date for any interest payable on the interest payment date; (e) whether the
Debt Securities are convertible into Common Stock or Preferred Stock and the
terms of the security into which they are convertible (see "Description of
Capital Stock"), the conversion price, other terms related to conversion and
any anti-dilution protections; (f) if other than the corporate trust office of
the trustee for such Debt Securities, the place or places where the principal
of, premium, if any, and interest, if any, on the Debt Securities will be
payable; (g) the portion of the principal amount of Debt Securities of the
series payable upon certain declarations of acceleration or the method by
which such portion shall be determined; (h) the currency, currencies or
currency unit in which payments will be made, if other than U.S. dollars; (i)
whether the Debt Securities are senior or subordinated Debt Securities; (j)
any redemption, repayment or sinking fund provisions, including the period or
periods within which, the currency, currencies or currency units in which, and
the other terms and conditions upon which, Debt Securities may be redeemed;
(k) whether the Debt Securities will be sold as part of Units consisting of
Debt Securities and other Securities; (l) if the amount of payments of
principal of or any premium or interest on any Debt Securities of the series
may be determined with reference to an index, formula or other method, the
index, formula or other method by which such amounts shall be determined; (m)
whether and by what method the Debt Securities of the series (or certain
covenants under the related Indenture) may be defeased and discharged by the
Company; (n) whether the Debt Securities of the series shall be issued in
whole or in part as book-entry securities; (o) any applicable material federal
income tax consequences; and (p) any other material specific terms of the Debt
Securities, including any material additional events of default or covenants
provided for with respect to the Debt Securities and any material terms that
may be required by or advisable under applicable laws or regulations.
Debt Securities may bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate or as part of Units consisting of
Debt Securities and other Securities may be sold or deemed to be sold at a
discount below their stated principal
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amount. With respect to any Debt Securities as to which the Company has the
right to defer interest, the holders of such Debt Securities may be allocated
interest income for federal and state income tax purposes without receiving
equivalent, or any, interest payments. Any material federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par that are treated as having been issued at a
discount for federal income tax purposes will be described in the applicable
Prospectus Supplement.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Except as otherwise set forth in the applicable Prospectus Supplement, any
Subordinated Debt Securities will be subordinate and junior in right of
payment, to the extent and in the manner to be set forth in the Indenture, to
all "Senior Debt" of the Company. "Senior Debt" means, without duplication,
the principal, premium (if any) and unpaid interest on all present and future
(i) indebtedness of the Company for borrowed money, (ii) obligations of the
Company evidenced by bonds, debentures, notes or similar instruments, (iii)
indebtedness incurred, assumed or guaranteed by the Company in connection with
the acquisition by it or a subsidiary of any business, properties or assets
(except purchase-money indebtedness classified as accounts payable under
generally accepted accounting principles), (iv) obligations of the Company as
lessee under leases required to be capitalized on the balance sheet of the
lessee under generally accepted accounting principles, (v) reimbursement
obligations of the Company in respect of letters of credit relating to
indebtedness or other obligations of the Company that qualify as indebtedness
or obligations of the kind referred to in clauses (i) through (iv) above, and
(vi) obligations of the Company under direct or indirect guarantees in respect
of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (v) above, in each case unless, in the instrument creating or
evidencing the indebtedness or obligation or pursuant to which the same is
outstanding, it is provided that such indebtedness or obligation is not
superior in right of payment to Senior Debt Securities.
CERTAIN COVENANTS OF THE COMPANY
The Prospectus Supplement will describe certain covenants of the Company
that will be set forth in the Indentures.
REDEMPTION
If and to the extent set forth in the applicable Prospectus Supplement, the
Company will have the right to redeem the Debt Securities, in whole or from
time to time in part, after the date and at the redemption prices set forth in
the applicable Prospectus Supplement.
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series will
be defined in the Indentures and set forth in the applicable Prospectus
Supplement.
DEFEASANCE OF DEBT SECURITIES
The Prospectus Supplement will state whether any defeasance provision will
apply to Debt Securities offered in connection therewith.
MODIFICATION OF THE INDENTURE AND WAIVER OF COVENANTS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Indentures will contain provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in principal
amount of outstanding Debt Securities of each series affected thereby, to
execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the Indentures or modifying the rights of
the Holders of outstanding Debt Securities of such series, except that no such
supplemental indenture may, without the consent of the Holder of each
outstanding Debt Security affected thereby, (a) change the Stated Maturity, or
reduce the principal amount, the premium, if any, thereon or the rate
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of payment of interest thereon, of any Debt Security of any series or (b)
effect certain other changes as set forth in the Indentures and described in
the applicable Prospectus Supplement. The Indentures will also permit the
Company to omit compliance with certain covenants in the Indentures with
respect to Debt Securities of any series upon waiver by the Holders of a
majority in principal amount of outstanding Debt Securities of such series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Indentures will contain a provision permitting the Company, without the
consent of the Holders of any of the outstanding Debt Securities under the
Indenture, to consolidate with or merge into any other corporation or transfer
or lease its assets substantially as an entirety to any person provided that:
(i) the successor is a corporation organized under the laws of any domestic
jurisdiction; (ii) the successor corporation assumes the Company's obligations
on the Debt Securities and under the Indentures; (iii) after giving effect to
the transaction no Event of Default, and no event which, after notice or lapse
of time, would become an Event of Default, shall have happened and be
continuing; and (iv) certain other conditions are met.
CONCERNING THE TRUSTEE
The Trustee will be named in the Indentures and disclosed in the applicable
Prospectus Supplement.
GOVERNING LAW
Unless otherwise specified in the applicable Prospectus Supplement, the
Indenture for the Debt Securities and the Debt Securities will be governed by
New York law.
DESCRIPTION OF WARRANTS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Warrants will be issued in fully registered form under a Warrant Agreement
between the Company and the Warrant Agent named in the applicable Prospectus
Supplement (the "Warrant Agent"). The statements in this Prospectus relating
to the Warrants and the Warrant Agreement are summaries and do not purport to
be complete.
Each Warrant will entitle the registered owner (the "Warrantholder") to
purchase one share of Common Stock, as set forth in the applicable Prospectus
Supplement, subject to the call provisions referred to below, from the time
the Warrants are separately transferable until the date set forth in the
accompanying Prospectus Supplement. The initial exercise price of the Warrants
and the date on which the Warrants become separately transferable will be set
forth in the applicable Prospectus Supplement.
The Warrants can be exercised by surrendering to the Warrant Agent a Warrant
certificate signed by the Warrantholder or his, her or its duly authorized
agent indicating the Warrantholder's election to exercise all or a portion of
the Warrants evidenced by the certificate. Surrendered Warrant certificates
must be accompanied by a written election to purchase such Warrants and
payment of the aggregate exercise price of the Warrants to be exercised (the
"Warrant Price"), which payment may be made in the form of wire transfer or a
cashier's check equal to the exercise price or, if and to the extent set forth
in the applicable Prospectus Supplement, the surrender of Debt Securities in
denominations at least equal to the aggregate Warrant Prices or, if
applicable, any combination of cash and such denominations of Debt Securities.
Certificates evidencing duly exercised Warrants shall be delivered by the
Warrant Agent to the transfer agent or trustee for the applicable Securities.
Upon receipt thereof, the Company will be obligated to deliver or cause to be
delivered, to or upon the written order of the exercising Warrantholders,
certificates representing the number of shares of Common Stock so purchased.
If fewer than all of the Warrants evidenced by any certificate are exercised,
the Warrant Agent will be obligated to deliver to the exercising Warrantholder
a new Warrant certificate representing the unexercised Warrants.
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To the extent set forth in the applicable Prospectus Supplement, the Warrant
Price and the number of shares of Common Stock purchasable upon the exercise
of each Warrant are subject to adjustment in certain events, including: (i)
the issuance of a stock dividend to holders of Common Stock or a combination
or subdivision of the Common Stock; (ii) the issuance of rights, warrants or
options or securities convertible into, or exchangeable for, the Common Stock,
that are distributed to all holders of the Company's outstanding Common Stock
entitling them to subscribe for or purchase such Common Stock; and (iii) any
distribution by the Company to the holders of its Common Stock of evidences of
indebtedness of the Company or of assets (excluding, if and to the extent set
forth in the applicable Prospectus Supplement, certain cash dividends or
distributions). To the extent set forth in the applicable Prospectus
Supplement, no adjustment in the number of shares of Common Stock purchasable
upon exercise of the Warrants or in the Warrant Price will be required until
cumulative adjustments require an adjustment of at least one percent thereof.
Notwithstanding the foregoing, unless the applicable Prospectus Supplement
states to the contrary, in case of any merger or consolidation or sale,
transfer, lease or conveyance of all or substantially all of the assets of the
Company and its subsidiaries, including a consolidation or merger in which the
Company is not the continuing corporation, the successor or assuming entity
shall succeed to and be substituted for the Company, with the same effect as
if it had been named in the Warrant Agreement and in the Warrant Certificates
as the Company. If the Company is the continuing corporation following any
consolidation or merger, the obligations of the Company under the Warrant
Agreement and in the Warrant Certificates shall continue and such Warrant
Agreement and Warrant Certificates shall remain in full force and effect.
Adjustments to the Warrant Price (and, possibly, adjustment to the number of
shares of Common Stock purchasable upon the exercise of each Warrant), or the
failure to make such adjustments, may in certain circumstances result in
distributions that could be taxable as dividends under the Internal Revenue
Code of 1986, as amended, to holders of the Warrants or to holders of shares
of Common Stock issued upon exercise thereof. The Company will reserve the
right (but will not be obligated) to make such adjustments to the Warrant
Price or in the number of shares of Common Stock purchasable upon the exercise
of each Warrant, in addition to those required in the foregoing provisions, as
it shall determine to be advisable in order that certain stock-related
distributions which may hereafter be made by the Company to its stockholders
after the date of the applicable Prospectus Supplement shall not be taxable to
them.
If all or any portion of the Warrants are callable at the option of the
Company, the call provisions, including the call price and the date through
which the Warrants may be exercised, will be set forth in the applicable
Prospectus Supplement. The applicable Prospectus Supplement will set forth
whether, upon expiration of the call option, the unexercised Warrants will
convert into shares of Common Stock, and, if such Warrants convert into shares
of Common Stock, the manner and rate of such conversion.
Holders of Warrants are not entitled, by virtue of being holders, to receive
dividends or to consent or to receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, to vote at any such meeting or to exercise any rights whatsoever
as stockholders of the Company. The Warrant Agreement and the Warrant
certificates will provide that no director, officer, employee or shareholder
of the Company, as such, will have any liability under the Warrants or the
Warrant Agreement. The Warrant Agreement and the Warrant certificates will
also provide that each holder of the Warrants, by accepting the Warrants,
waives and releases all such liability.
Unless otherwise specified in the applicable Prospectus Supplement, the
Warrant Agreement and the Warrants will be governed by New York law.
DESCRIPTION OF GLOBAL SECURITIES
Unless otherwise specified in the applicable Prospectus Supplement,
Securities other than Common Stock will be issued in the form of one or more
book-entry certificates (collectively, with respect to each series or
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issue of Securities, the "Global Securities") registered in the name of a
depositary or a nominee of a depositary. Unless otherwise specified in the
applicable Prospectus Supplement, the Company expects the depositary will be
The Depository Trust Company ("DTC"). If Cede & Co. ("Cede") will act as DTC's
nominee, Cede is expected to be the initial registered holder of all
Securities that are issued in book-entry form. No person that acquires a
beneficial interest in such Securities will be entitled to receive a
certificate representing such person's interest in the Securities except as
set forth herein or in the applicable Prospectus Supplement. Unless and until
definitive Securities are issued under the limited circumstances described
below, all references to actions by holders of Securities issued in book-entry
form shall refer to actions taken by DTC upon instruction from its
Participants (as defined below), and all references herein to payments and
notices to holders shall refer to payments and notices to DTC or Cede, as the
registered holder of such Securities.
The Company expects that DTC will represent that it is a limited purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing company" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended, and that it
was created to hold securities for its participating organizations
("Participants") and to facilitate the clearance and settlement of securities
transactions among Participants through electronic book-entry, thereby
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations, and may include certain other organizations. Indirect access to
the DTC system also is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
Persons that are not Participants or Indirect Participants ("Holders") but
desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Securities may do so only through Participants and Indirect
Participants. Under a book-entry format, Holders may experience some delay in
their receipt of payments, as such payments will be forwarded by the agent
designated by the Company to Cede, as nominee for DTC. DTC will forward such
payments to its Participants, which thereafter will forward them to Indirect
Participants or Holders. Holders will not be recognized by the applicable
registrar, transfer agent, Trustee or Warrant Agent as registered holders of
the Securities entitled to the benefits of the Certificate or the applicable
Indenture or Warrant Agreement. Beneficial owners that are not Participants
will be permitted to exercise their rights as such only indirectly through and
subject to the procedures of Participants and, if applicable, Indirect
Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations as currently in effect (the "Rules"), DTC will be required to
make book-entry transfers of Securities among Participants and to receive and
transmit payments to Participants. Participants and Indirect Participants with
which beneficial owners of Securities have accounts with respect to the
Securities similarly are required by the Rules to make book-entry transfers
and receive and transmit such payments on behalf of their respective account
holders.
Because DTC can act only on behalf of Participants, who in turn act only on
behalf of other Participants or Indirect Participants, and on behalf of
certain banks, trust companies and other persons approved by it, the ability
of a beneficial owner of Securities issued in book-entry form to pledge such
Securities to persons or entities that do not participate in the DTC system,
or to otherwise act with respect to such Securities, may be limited due to the
unavailability of physical certificates for such Securities.
The Company expects DTC will take any action permitted to be taken by a
registered holder of any Securities under the Certificate or the applicable
Indenture or Warrant Agreement only at the direction of one or more
Participants to whose accounts with DTC such Securities are credited.
Unless otherwise specified in the applicable Prospectus Supplement, a Global
Security will be exchangeable for the relevant definitive Securities
registered in the names of persons other than DTC or its nominee only if (i)
DTC notifies the Company that it is unwilling or unable to continue as
depository for such Global Security or if
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at any time DTC ceases to be a clearing agency registered under the Exchange
Act at a time when DTC is required to be so registered in order to act as such
depository and the Company does not appoint a successor within 90 days, (ii)
the Company executes and delivers to the applicable registrar, transfer agent,
Trustee and/or Warrant Agent an order complying with the requirements of the
Certificate or the applicable Indenture and/or Warrant Agreement that such
Global Security shall be so exchangeable or (iii) there has occurred and is
continuing a default in the payment of any amount due in respect of the
Securities or, in the case of Debt Securities, an Event of Default or an event
that, with the giving of notice or lapse of time, or both, would constitute an
Event of Default with respect to such Debt Securities. Any Global Security
that is exchangeable pursuant to the preceding sentence will be exchangeable
for Securities registered in such names as DTC directs.
Upon the occurrence of any event described in the immediately preceding
paragraph, DTC will be generally required to notify all Participants of the
availability through DTC of definitive Securities. Upon surrender by DTC of
the Global Security representing the Securities and delivery of instructions
for re-registration, the registrar, transfer agent, Trustee or Warrant Agent,
as the case may be, will reissue the Securities as definitive Securities, and
thereafter such persons will recognize the holders of such definitive
Securities as registered holders of Securities entitled to the benefits of the
Certificate or the applicable Indenture and/or Warrant Agreement.
Except as described above, a Global Security may not be transferred except
as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or to a successor depositary appointed by the Company. Except
as described above, DTC may not sell, assign, transfer or otherwise convey any
beneficial interest in a Global Security evidencing all or part of any
Securities unless such beneficial interest is in an amount equal to an
authorized denomination for such Securities.
None of the Company, the Trustees, any registrar and transfer agent or any
Warrant Agent, or any agent of any of them, will have any responsibility or
liability for any aspect of DTC's or any Participant's records relating to, or
for payments made on account of, beneficial interests in a Global Security, or
for maintaining, supervising or reviewing any records relating to such
beneficial interests.
PLAN OF DISTRIBUTION
The Company may sell the Securities to or through one or more underwriters
or dealers or may sell the Securities to investors directly or through agents.
Any such underwriter or agent involved in the offer and sale of the Securities
will be named in the applicable Prospectus Supplement. The Company may sell
Securities directly to investors on its own behalf in those jurisdictions
where it is authorized to do so.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
Company also may, from time to time, authorize dealers or agents to offer and
sell the Securities upon such terms and conditions as may be set forth in the
applicable Prospectus Supplement. In connection with the sale of the
Securities, underwriters may receive compensation from the Company in the form
of underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities for whom they may act as agent. Underwriters may
sell the Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters or commissions from the purchasers for which they may act as
agents.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Securities, and any discounts or
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Dealers and agents
participating in the distribution of the Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Securities may be deemed to be
underwriting discounts and commissions. Underwriters, dealers and agents may
be entitled, under agreements entered into with the Company, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
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The Common Stock is listed on the Nasdaq National Market under the symbol
"BLCI." The Debt Securities, the Preferred Stock and the Warrants will be new
issues of securities with no established trading market. Any underwriters or
agents to or through which Securities are sold by the Company may make a
market in such Securities, but such underwriters or agents will not be
obligated to do so and any of them may discontinue any market making at any
time without notice. No assurance can be given as to the liquidity of or
trading market for any Debt Securities, Preferred Stock or Warrants.
CERTAIN TRANSACTIONS
FORMATION AGREEMENT
Upon the completion of the Company's initial public offering of Common Stock
in May 1997 (the "IPO"), the Company and PGI entered into the Formation
Agreement, pursuant to which PGI transferred to the Company all of the capital
stock of BLC Property, Inc., its interest in the Heritage and the Devonshire
facilities and the operations relating to its senior and assisted living
division. In return for such contribution, the Company issued 1,703,043 shares
of its Common Stock to PGI and assumed certain indebtedness in the aggregate
amount of $65.0 million. In addition, the Company paid PGI approximately $8.4
million to reimburse PGI for earnest monies previously paid by PGI in
connection with the acquisition of the Edina Park Plaza and Hawthorn Lakes
facilities, the Park Place facility, a third party's interests in the Heritage
and the Devonshire facilities and the proposed acquisitions of the development
sites located in Glen Ellyn, Illinois, Southfield, Michigan and Austin, Texas,
for certain costs and fees previously paid by PGI relating to the replacement
credit enhancement on the $65.0 of tax-exempt bonds relating to the Heritage
and the Devonshire facilities and for certain costs and expenses previously
paid by PGI relating to the issuance and distribution of Common Stock pursuant
to the IPO. In accordance with the Formation Agreement, Mark J. Schulte,
President and Chief Executive Officer of the Company, transferred all of his
interests in PGI's senior and assisted living division to the Company in
exchange for 296,957 shares of Common Stock from the Company. Except as
expressly set forth in the Formation Agreement with regard to title, liens,
claims and certain other items and PGI's representations that the Heritage,
Devonshire and Hallmark facilities had been operated in the ordinary course
since December 31, 1996, no party made any representation or warranty as to
the assets, businesses or liabilities transferred or assumed pursuant to such
agreement, as to any consents or approvals required in connection therewith,
as to the value thereof or as to freedom from counterclaim with respect to any
claim of any party. Except as expressly set forth in the Formation Agreement,
all assets were transferred on an "as is, where is" basis. In the Formation
Agreement, PGI covenanted that the partnerships owning the Heritage and the
Devonshire facilities had no less than $800,000 in the aggregate in
unrestricted cash, plus any cash balances in real estate tax and capital
reserve accounts, upon the completion of the IPO; however, any unrestricted
cash in excess of $800,000 then held by such partnerships was distributed to
PGI.
REGISTRATION RIGHTS AGREEMENT
Upon completion of the IPO, the Company granted demand and incidental
registration rights to PGI for the registration of shares of Common Stock
owned by PGI under the Securities Act. Three demand registrations are
permitted during the first five years following the initial public offering of
the Common Stock and one registration per year each year thereafter until PGI
owns less than 10% of the outstanding Common Stock. The Company will pay the
fees and expenses of the demand registrations and the incidental
registrations, while PGI will pay all underwriting discounts and commissions.
These registration rights are subject to certain conditions and limitations,
including the right of underwriters to limit the number of shares owned by PGI
included in such registration.
VOTING AGREEMENT
Upon completion of the IPO, PGI entered into a Voting Agreement pursuant to
which it agreed to vote all of its shares of Common Stock at any meeting at
which directors are elected in favor of the election of independent directors
so that after such election, if such persons are elected, there will be at
least four independent directors. The Voting Agreement will continue in effect
until the earlier of three years from the closing date of the IPO and the date
PGI first owns less than 10% of the outstanding Common Stock.
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NON-COMPETE AGREEMENT
Upon completion of the IPO, the Company, PGI and Michael W. Reschke entered
into a Non-Compete Agreement that will prevent PGI and Mr. Reschke from
developing, acquiring, owning, managing or operating senior and assisted
living facilities and semi-acute care facilities in the United States for a
period expiring on the earlier of (i) four years from the closing date of the
IPO and (ii) one year from the date of a merger of the Company or the sale of
all or substantially all of the stock or assets of the Company; however, PGI
is permitted to maintain its ownership interest in the Island on Lake Travis
facility. In addition, to the extent PGI or Mr. Reschke were to acquire a
group of properties that included facilities similar to those operated by the
Company, then the Company would have the right and opportunity to purchase
such similar facilities at a price equal to their fair market value. PGI and
Mr. Reschke will be allowed to provide debt or lease financing for properties
that are similar to the facilities owned or managed by the Company.
MANAGEMENT AGREEMENT
Upon completion of the IPO, the Company and PGI entered into a management
agreement for a term of two years with respect to the Island on Lake Travis
facility. The Company is paid a monthly fee of 5.0% of the gross revenues of
such facility for each month and reimbursement of expenses. The management
agreement may be terminated by PGI only for cause as set forth in the
management agreement during its initial term and upon 60 days' prior written
notice at any time after the expiration of the initial term. The Company may
terminate the management agreement at any time upon 60 days' advance notice.
OFFICE LEASE
On September 25, 1997, the Company entered into a five year lease (the
"Office Lease"), commencing October 1, 1997, for its corporate office with 77
West Wacker Limited Partnership (the "Landlord"), a partnership which is now
owned by Prime Group Realty Trust, the publicly-traded successor to PGI's
office and industrial divisions. The office space was approximately 13,500
square feet, located on the 48th floor of 77 West Wacker Drive in Chicago,
Illinois, 60601, with base rent of $18.50 per square foot escalating at $0.75
per square foot each anniversary of the commencement date. On October 2, 1997,
in connection with the signing of the lease, the Company received a $404,000
cash payment from the Landlord.
On March 17, 1998, the Company and the Landlord amended the Office Lease,
pursuant to which the Company and the Landlord agreed (i) to relocate the
Company's corporate office from the 48th floor to the 44th floor effective
April 24, 1998, (ii) to increase the space leased by the Company to
approximately 22,600 square feet and (iii) to extend the term of the Office
Lease until April 30, 2005. The base rent under the amended Office Lease
continues to be $18.50 per square foot, escalating $0.75 per square foot on
each May 1 of the term commencing May 1, 1999. In consideration for executing
the amendment of the Office Lease, the Company received a $452,000 cash
payment from the Landlord.
STOCK OPTION AND PURCHASE AGREEMENTS
Upon completion of the IPO, The Prime Group, Inc. entered into a stock
option agreement with Darryl W. Copeland, Jr. pursuant to which Mr. Copeland
received an option, subject to a one year vesting period, to purchase 100,000
shares of Common Stock from The Prime Group, Inc. at a purchase price of $0.01
per share. In the event the employment of Mr. Copeland is terminated by the
Company for any reason or in the event Mr. Copeland voluntarily terminates his
employment with the Company due to a "change of control" of the Company and a
material diminution of his duties and responsibilities or compensation prior
to the expiration of the vesting period, the option will immediately vest.
Upon completion of the IPO, Mr. Copeland also entered into an agreement with
PGI to purchase an additional 25,000 shares of Common Stock.
EXCHANGEABLE NOTE TRANSACTION
PGI has issued an exchangeable note having a principal amount of $20 million
and a five year term (the "Exchangeable Note") to an unaffiliated third party
(the "Noteholder"), the repayment of which is secured by
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the pledge by PGI of 1,370,00 shares of its Common Stock. Pursuant to the
terms of the Exchangeable Note, the Noteholder will have the right, commencing
on November 15, 1998 (the "Initial Exchange Date"), to exchange a portion of
the outstanding principal amount of the Exchangeable Note, plus the accrued
interest thereon, for shares of Common Stock of the Company held by PGI, at
the exchange rate specified therein. On and after the Initial Exchange Date,
the Noteholder will be entitled to exchange up to $5 million of the
outstanding principal under the Exchangeable Note, plus accrued interest
thereon, for shares of Common Stock of the Company held by PGI. Thereafter,
the Noteholder will be entitled to exchange up to a further $5 million of the
outstanding principal amount under the Exchangeable Note, plus accrued
interest thereon, on each of January 15, 1999, March 15, 1999 and May 15,
1999. Subject to certain exceptions, the number of shares of Common Stock
subject to exchange for a given amount of principal and accrued interest to be
exchanged pursuant to the terms of the Exchangeable Note will be equal to (x)
such amount of principal and accrued interest divided by (y) the product of
(A) 88% multiplied by (B) the average of the closing bid prices for the Common
Stock on the Nasdaq National Market on the seven trading days immediately
preceding the date of exchange.
OTHER TRANSACTIONS
Wayne D. Boberg, a director of the Company, is a partner of the law firm of
Winston & Strawn, which has provided, and continues to provide, legal services
to the Company. As of the date of this Registration Statement, Mr. Boberg
beneficially owns 2,500 shares of Common Stock and has options to acquire an
additional 5,000 shares of Common Stock.
Transactions between the Company and its officers, directors, principal
stockholders and their affiliates require the approval of a majority of the
disinterested members of the Board of Directors.
READINESS FOR YEAR 2000
The Company is in the process of planning the nature and extent of the work
required to make its systems and infrastructure Year 2000 compliant. Based on
a recent assessment, the Company will have to modify or replace significant
portions of its hardware and software so that its systems will function
properly with respect to the Year 2000 and beyond. The Company believes that
with modifications to existing software and conversions to new software
applications, in addition to hardware upgrades on certain mechanical systems,
the Year 2000 issue will not pose significant operational problems. However,
if such modifications and conversions are not made, or are not completed in a
timely manner, the Year 2000 issue could have a material impact on the
operations of the Company.
The Company continues to evaluate the Year 2000 issue and will utilize both
internal and external resources in order to reprogram, or replace, systems
that are not in compliance with the Year 2000. The Company anticipates
completing the project no later than March 31, 1999. The cost to complete the
project has not yet been determined.
The projected completion date is based on management's best estimates of the
time necessary to complete its evaluation and make any necessary modifications
and conversions, which estimates were derived utilizing numerous assumptions
of future events, including the ability of third parties to modify the
Company's systems on a timely basis. There can be no guarantee that the
project will be completed in a timely manner. Specific factors that might
delay completion of the project include, but are not limited to, the
availability of qualified personnel, the ability to locate and correct all
relevant computer codes, and similar uncertainties.
LEGAL MATTERS
The validity of the Common Stock, Preferred Stock, Debt Securities and
Warrants covered by this Prospectus will be passed upon for the Company by
Winston & Strawn, Chicago, Illinois. The validity of the Securities offered by
this Prospectus may be passed on for any underwriters or agents by counsel
named in the applicable Prospectus Supplement.
15
<PAGE>
EXPERTS
The consolidated financial statements of Brookdale Living Communities, Inc.
as of December 31, 1997 and for the period from May 7, 1997 through December
31, 1997, and the combined financial statements of the Predecessor Properties
as of December 31, 1996 and for the period from January 1, 1997 through May 6,
1997 and for each of the two years in the period ended December 31, 1996,
appearing in the Company's Annual Report (Form 10-K), have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included herein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
16
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDER-
WRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITA-
TION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED
HEREBY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Information Incorporated by Reference...................................... 2
Special Note on Forward Looking Statements................................. 3
The Company................................................................ 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Combined Fixed Charges................................ 4
Description of Capital Stock............................................... 4
Description of Debt Securities............................................. 6
Description of Warrants.................................................... 9
Description of Global Securities........................................... 10
Plan of Distribution....................................................... 12
Certain Transactions....................................................... 13
Readiness for Year 2000.................................................... 15
Legal Matters.............................................................. 15
Experts.................................................................... 16
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$200,000,000
BROOKDALE LIVING COMMUNITIES, INC.
COMMON STOCK, PREFERRED STOCK, DEBT SECURITIES AND WARRANTS TO PURCHASE COMMON
STOCK
----------------
PROSPECTUS
----------------
JULY , 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
Company, except any underwriters' fees and expenses, in connection with the
sale of the Securities being registered hereby. All of the amounts shown are
estimated, except the SEC registration fee and the NASD filing fee.
<TABLE>
<S> <C>
SEC registration fee............................................ $ 59,000
NASD filing fee................................................. 20,500
Printing expenses............................................... 100,000
Trustee's fees and expenses..................................... 20,000
Legal fees and expenses......................................... 100,000
Accounting fees and expenses.................................... 75,000
Miscellaneous expenses (including listing, rating agency,
depositary and warrant agent fees)............................. 125,500
--------
Total....................................................... $500,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the General Corporation Law of the State of Delaware
("Section 145"), a corporation may indemnify its directors, officers,
employees and agents and its former directors, officers, employees and agents
and those who serve, at the corporation's request, in such capacities with
another enterprise, against expenses (including attorneys' fees), as well as
judgments, fines and settlements in nonderivative lawsuits, actually and
reasonably incurred in connection with the defense of any action, suit or
proceeding in which they or any of them were or are made parties or are
threatened to be made parties by reason of their serving or having served in
such capacity. Section 145 provides, however, that such person must have acted
in good faith and in a manner he or she reasonably believed to be in (or not
opposed to) the best interests of the corporation, and, in the case of a
criminal action, such person must have had no reasonable cause to believe his
or her conduct was unlawful. In addition, Section 145 does not permit
indemnification in an action or suit by or in the right of the corporation,
where such person has been adjudged liable to the corporation, unless, and
only to the extent that, a court determines that such person fairly and
reasonably is entitled to indemnity for expenses the court deems proper in
light of liability adjudication. Indemnity is mandatory to the extent a claim,
issue or matter has been successfully defended.
The Company's Amended and Restated By-laws (the "By-laws") provide for
mandatory indemnification of directors and officers generally to the same
extent authorized by Section 145. Under the By-laws, the Company shall advance
expenses incurred by an officer or director in defending any such action if
the director or officer undertakes to repay such amount if it is determined
that he or she is not entitled to indemnification.
The Company has also entered into indemnification agreements with each of
the Company's directors and certain of its officers. The indemnification
agreements require, among other things, that the Company indemnify such
directors and officers to the fullest extent permitted by law and advance to
such directors and officers all related expenses, subject to reimbursement if
it is subsequently determined that indemnification is not permitted. The
Company also must indemnify and advance all expenses incurred by such
directors and officers seeking to enforce their rights under the
indemnification agreements and cover such directors and officers under the
Company's directors' and officers' liability insurance.
The Company's Restated Certificate of Incorporation provides that the
Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors, except (a) for any breach of the directors' duty of loyalty
to the Company or its
II-1
<PAGE>
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the General Corporation Law of the State of Delaware or (d)
for transactions from which directors derive improper personal benefit.
ITEM 16. EXHIBITS.
The following documents are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement
3.1* Restated Certificate of Incorporation of the Company, as filed
with the Securities and Exchange Commission on June 16, 1997 as
Exhibit 3.1 to the Company's Form 10-Q for the period ended March
31, 1997 (File No. 0-22253) and incorporated herein by reference
3.2* Amended and Restated By-laws of the Company, as filed with the
Securities and Exchange Commission on June 16, 1997 as Exhibit 3.2
to the Company's Form 10-Q for the period ended March 31, 1997
(File No. 0-22253) and incorporated herein by reference
4.1* Form of certificate representing Common Stock of the Company, as
filed with the Securities and Exchange Commission on March 17,
1997 as Exhibit 10.14 to the Company's Registration Statement on
Form S-1 (Registration No. 333-12259) and incorporated herein by
reference
4.2 Form of Indenture providing for issuance of [Convertible] Senior
Debt Securities in Series
4.3 Form of Indenture providing for issuance of [Convertible]
Subordinated Debt Securities in Series
4.4 Form of Certificate of Designations of [ ]% Series [ ]
[Convertible] Preferred Stock ($0.01 par value per share) of the
Company
4.5 Form of Warrant Agreement
Opinion of Winston & Strawn regarding legality of securities being
5.1* registered
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Ernst & Young LLP
Consent of Winston & Strawn (included in opinion filed as Exhibit
23.2* 5.1)
Powers of attorney (included on signature page included in Part II
24.1* of this filing)
25.1 Statement of Eligibility of Trustee
27.1* Financial Data Schedule, as filed with the Securities and Exchange
Commission on May 15, 1998 as Exhibit 27.1 to the Company's Form
10-Q for the period ended March 31, 1998 (File No. 0-22253) and
incorporated herein by reference
</TABLE>
- --------
*Previously filed
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Company pursuant to Section 13 or
15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Company's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 15
(other than the provisions relating to insurance), or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
(6) That, for purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rules 424(b)(l) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(7) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(8) The undersigned Company hereby undertakes to file an application, if
necessary, for the purpose of determining the eligibility of any trustee to
act under subsection (a) of Section 310 of the Trust Indenture Act (the
"Act") in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY HAS
DULY CAUSED THIS AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO,
STATE OF ILLINOIS, ON THE 8TH DAY OF JULY, 1998.
Brookdale Living Communities, Inc.
/s/ Mark J. Schulte
_____________________________________
Mark J. Schulte
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON JULY 8, 1998 BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
Michael W. Reschke* Chairman of the Board, Director
___________________________________________
Michael W. Reschke
/s/ Mark J. Schulte President and Chief Executive Officer
___________________________________________ (principal executive officer), Director
Mark J. Schulte
Darryl W. Copeland, Jr.* Executive Vice President and Chief
___________________________________________ Financial Officer (principal financial
Darryl W. Copeland, Jr. officer), Director
Sheryl A. Wolf* Controller (principal accounting officer)
___________________________________________
Sheryl A. Wolf
Wayne D. Boberg* Director
___________________________________________
Wayne D. Boberg
Bruce L. Gewertz* Director
___________________________________________
Bruce L. Gewertz
Darryl W. Hartley-Leonard* Director
___________________________________________
Darryl W. Hartley-Leonard
Daniel J. Hennessy* Director
___________________________________________
Daniel J. Hennessy
</TABLE>
*By /s/ Mark J. Schulte
----------------------------
Mark J. Schulte, Attorney-in-Fact
II-4
<PAGE>
EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
1.1 Form of Underwriting Agreement
3.1* Restated Certificate of Incorporation of the Company, as filed
with the Securities and Exchange Commission on June 16, 1997 as
Exhibit 3.1 to the Company's Form 10-Q for the period ended
March 31, 1997 (File No. 0-22253) and incorporated herein by
reference
3.2* Amended and Restated By-laws of the Company, as filed with the
Securities and Exchange Commission on June 16, 1997 as Exhibit
3.2 to the Company's Form 10-Q for the period ended March 31,
1997 (File No. 0-22253) and incorporated herein by reference
4.1* Form of certificate representing Common Stock of the Company, as
filed with the Securities and Exchange Commission on March 17,
1997 as Exhibit 10.14 to the Company's Registration Statement on
Form S-1 (Registration No. 333-12259) and incorporated herein by
reference
4.2 Form of Indenture providing for issuance of [Convertible] Senior
Debt Securities in Series
4.3 Form of Indenture providing for issuance of [Convertible]
Subordinated Debt Securities in Series
4.4 Form of Certificate of Designations of [ ]% Series [ ]
[Convertible] Preferred Stock ($0.01 par value per share) of the
Company
4.5 Form of Warrant Agreement
5.1* Opinion of Winston & Strawn regarding legality of securities
being registered
12.1* Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Ernst & Young LLP
23.2* Consent of Winston & Strawn (included in opinion filed as
Exhibit 5.1)
24.1* Powers of attorney (included on signature page included in Part
II of this filing)
25.1 Statement of Eligibility of Trustee
27.1* Financial Data Schedule, as filed with the Securities and
Exchange Commission on May 15, 1998 as Exhibit 27.1 to the
Company's Form 10-Q for the period ended March 31, 1998 (File
No. 0-22253) and incorporated herein by reference
</TABLE>
- --------
*Previously filed
<PAGE>
Exhibit 1.1
BROOKDALE LIVING COMMUNITIES, INC.
(a Delaware corporation)
[AMOUNT AND TYPE OF SECURITY]
FORM OF UNDERWRITING AGREEMENT
------------------------------
, 199_
[NAME(S) OF REPRESENTATIVE(S) OF THE UNDERWRITERS]
As Representatives of the Several Underwriters
[Address of Lead Underwriter]
Ladies and Gentlemen:
Brookdale Living Communities, Inc., a Delaware corporation (the "Company"),
confirms its agreement with [Name(s) of Representative(s) of the Underwriters]
(collectively, the "Representatives") and the underwriters listed on Schedule A
----------
attached hereto (collectively, the "Underwriters," which term shall also include
any underwriter substituted as provided in Section 9 hereof), for whom the
---------
Representatives are acting as representatives, subject to the terms and
conditions stated herein, with respect to the sale by the Company to the
Underwriters, acting severally and not jointly, of [Amount of Securities] (the
"Firm Shares") of the Company's [Type of Security] and with respect to the grant
by the Company to the Underwriters of the option described in Section 2(b)
------------
hereof to purchase all or any part of an additional [Amount and Type of
Security] (the "Option Shares") to cover overallotments. The Firm Shares and the
Option Shares are collectively hereinafter called the "Shares."
Prior to the purchase and public offering of the Shares by the
Underwriters, the Company and the Representatives, acting on behalf of the
Underwriters, shall enter into an agreement substantially in the form of Exhibit
-------
A hereto (the "Pricing Agreement"). The Pricing Agreement may take the form of
- -
an exchange of any standard form of written telecommunication between the
Company and the Representative and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Shares will be governed by
---------
this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-53969) and a related
preliminary prospectus for the registration of the Shares under the Securities
Act of 1933, as amended (the "1933 Act"), and has
<PAGE>
filed such amendments thereto and such amended preliminary prospectuses as may
have been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required. Such
registration statement when it becomes effective (as amended, if applicable) and
the prospectus constituting a part thereof (including in each case the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
rules and regulations under the 1933 Act (the " 1933 Act Regulations")), as from
time to time amended or supplemented pursuant to the 1933 Act or otherwise, are
hereinafter referred to as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Shares which differs from the Prospectus on file at the Commission at the time
the Registration Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of the
1933 Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters for
such use.
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Representatives deem advisable after the
Registration Statement becomes effective and the Pricing Agreement has been
executed and delivered.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
1(a) The Company represents and warrants to, and agrees with, each
Underwriter as of the date hereof and as of the date of the Pricing Agreement
(such later date being hereinafter referred to as the "Representation Date") as
follows:
(i) At the time the Registration Statement becomes effective and at
the Representation Date, the Registration Statement, if applicable, will comply
in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, at the Representation
Date (unless the term "Prospectus" refers to a prospectus that has been provided
to the Underwriters by the Company for use in connection with the offering of
the Shares which differs from the Prospectus on file at the Commission at the
time the Registration Statement becomes effective, in which case at the time it
is first provided to the Underwriters for such use) and at the Closing Time
referred to in Section 2(c) hereof, will comply in all material respects with
------------
the requirements of the 1933 Act and the 1933 Act Regulations and will not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided, however,
-------- -------
that the representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information contained in the first, second
and fourth paragraphs of the section of the Prospectus captioned "Underwriting.
"
(ii) The Registration Statement has become effective or will become
effective prior to execution of the Pricing Agreement and no stop order
suspending the effectiveness of the
2
<PAGE>
Registration Statement or any part thereof has been issued and no proceeding for
that purpose has been instituted or, to the knowledge of the Company, threatened
by the Commission or by the state securities authority of any jurisdiction. No
order preventing or suspending the use of the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission or by the state securities authority of
any jurisdiction.
(iii) Ernst & Young LLP, who have certified the financial statements
and financial statement schedules included in the Registration Statement, are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) The financial statements (including the notes thereto)
included in the Registration Statement and the Prospectus present fairly the
financial position of the respective entity or entities presented therein at the
respective dates indicated and the results of their operations for the
respective periods specified, and except as otherwise stated in the Registration
Statement, such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis. The
financial statement schedules included in the Registration Statement present
fairly the information required to be stated therein. The financial information
and data included in the Registration Statement and the Prospectus present
fairly the information included therein and have been prepared on a basis
consistent with that of the financial statements included in the Registration
Statement and the Prospectus and the books and records of the respective
entities presented therein. Other than the historical financial statements (and
schedules) included therein, no other historical or pro forma financial
statements (or schedules) are required by the 1933 Act or the 1933 Act
Regulations to be included in the Registration Statement. Except as reflected or
disclosed in the financial statements included in the Registration Statement or
otherwise set forth in the Prospectus, none of the Company or the Subsidiaries
(as hereinafter defined) are subject to any material indebtedness, obligation,
or liability, contingent or otherwise, known to the Company.
(v) [reserved]
(vi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, assets, or business affairs of the
Company and the Subsidiaries considered as a single enterprise, whether or not
arising in the ordinary course of business, (B) no material casualty loss or
material condemnation or other material adverse event has occurred with respect
to any of the Company's facilities, (C) there have been no acquisitions or other
transactions entered into by the Company or any Subsidiary that are material
with respect to such entities, considered as a single enterprise, or would
result in any inaccuracy in the representations contained in Section 1(a)(iv)
----------------
above, (D) there has been no dividend or distribution of any kind declared,
paid, or made by the Company on any class of its capital stock, (E) there has
been no change in the capital stock of the Company or any Subsidiary, and (F)
there has been no increase in the indebtedness of the Company or any Subsidiary
that is material to such entities, considered as a single enterprise.
3
<PAGE>
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
the corporate power and authority to own its properties, conduct its business as
described in the Prospectus and to enter into and perform its obligations under
this Agreement. The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other
jurisdiction in which such qualification is required, whether by reason of the
ownership, leasing, or management of any properties or the conduct of any other
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings, assets
or business affairs of the Company and the Subsidiaries considered as a single
enterprise.
(viii) Each Subsidiary that is a corporation (a "Corporate
Subsidiary") has been duly organized, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation and has
the corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus, and is duly qualified
and is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the condition
(financial or otherwise), business, prospects, properties, net worth or results
of operations of the Company and the Subsidiaries, considered as a single
enterprise. All of the outstanding shares of capital stock of each Corporate
Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable, were issued and sold in compliance with all applicable federal
and state securities laws, were not issued in violation of or subject to any
preemptive or similar rights, and are owned by the Company directly, or
indirectly through one of the other Subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature, except (i)
for those encumbrances disclosed in the Prospectus, (ii) for interests or liens
held by others as security for indebtedness of the Company or any Subsidiary
disclosed in the Prospectus and (iii) for transfer restrictions under applicable
federal and state securities and real estate syndication laws.
(ix) Each Subsidiary that is a general partnership or a limited
partnership (in each case, a "Partnership Subsidiary") has been duly organized
and is existing as a general partnership or limited partnership, as the case may
be, in good standing under the laws of its jurisdiction of organization and has
the partnership power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus, and is duly qualified
and is in good standing (where applicable) as a foreign partnership authorized
to do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
condition (financial or otherwise), business, prospects, properties, net worth
or results of operations of the Company and the Subsidiaries, considered as a
single enterprise. All outstanding partnership interests in the Partnership
Subsidiaries were issued and sold in compliance with the applicable partnership
or limited partnership agreements of such Partnership Subsidiaries and all
applicable federal and state securities laws, and the partnership interests
therein held directly or indirectly by the Company are owned free and clear of
any security interest, claim, lien, encumbrance or adverse interest of any
nature, except
4
<PAGE>
(i) for those encumbrances disclosed in the Prospectus, (ii) for interests or
liens held by others as security for indebtedness of the Company or any
Subsidiary disclosed in the Prospectus, (iii) to the extent provided in the
applicable partnership agreements of such Partnership Subsidiaries and (iv) for
transfer restrictions under applicable federal and state securities and real
estate syndication laws. To the knowledge of the Company, each partnership
agreement pursuant to which the Company or a Subsidiary holds a partnership
interest in a Partnership Subsidiary is in full force and effect and constitutes
the legal, valid and binding agreement of the parties thereto, enforceable
against such parties in accordance with the terms thereof, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally or by general equitable
principles. There has been no material breach of or default under, and no event
which with notice or lapse of time would constitute a material breach of or
default under, such partnership or limited partnership agreements by the Company
or any Subsidiary or, to the Company's knowledge, any other party to such
agreements.
(x) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued [Type of Security] of the Company
conform in all material respects to all statements relating thereto contained in
the Prospectus. All such [Type of Security] have been or will be duly and
validly authorized and issued, fully paid and non-assessable, and are not or
will not be subject to preemptive or other similar rights, and have been or will
be offered and sold in compliance with all applicable laws (including federal
and state securities laws). No shares of capital stock of the Company are
reserved for any purpose except in connection with the stock option plan of the
Company as described in the Prospectus. Except as described in the Prospectus,
there are no outstanding securities convertible into or exchangeable for any
capital stock of the Company and no outstanding options, rights (preemptive or
otherwise) or warrants to purchase or to subscribe for such shares or any other
securities of the Company.
(xi) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized for issuance and
sale to the Underwriters, and, when issued and delivered by the Company pursuant
to this Agreement against payment of the consideration set forth in the Pricing
Agreement, will be duly and validly issued and fully paid and non-assessable and
will be sold free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest. The terms of the Shares conform to all statements
and descriptions related thereto contained in the Prospectus and comply with all
applicable legal requirements. The Shares conform to the provisions of the
Company's charter. The form of share certificate to be used to evidence the
Shares is in due and proper form and complies with all applicable legal
requirements. No preemptive right, co-sale right, tag along right, registration
right, right of first refusal or other similar right of stockholders exists with
respect to any of the Shares or the issuance and sale thereof, other than those
that have been expressly waived prior to the date hereof and those that will
automatically expire upon the consummation of the transactions contemplated by
this Agreement on the date of Closing. No further consent, approval or
authorization of any stockholder, the Board of Directors of the Company, any
court or governmental agency or body, or others is required for the issuance and
sale or transfer of the Shares except as may be required under the federal
securities laws or under any state or other securities, Blue Sky or real estate
syndication laws and except as may be
5
<PAGE>
required to be obtained by the Underwriters. Except as disclosed in the
Prospectus, there are no stockholders agreements or voting agreements with
respect to the Common Stock to which the Company is a party or, except as
disclosed in the Prospectus, to the knowledge of the Company, between or among
any of the Company's stockholders.
(xii) None of the Company or any Subsidiary is in violation of its
charter, by-laws, certificate of limited partnership, partnership agreement, or
other organizational document, as applicable. None of the Company or any
Subsidiary is in default in the performance or observance of any obligation,
agreement, covenant, or condition contained in any material contract, indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any Subsidiary is, or at the Closing Time
will be, a party or by which the Company or any Subsidiary is, or at the Closing
Time will be, bound or to which any of the property or assets of the Company or
any Subsidiary is, or at the Closing Time will be, subject, except where a
default thereunder would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, assets, or business affairs of the
Company and the Subsidiaries, considered as a single enterprise. For purposes of
this paragraph the phrase "material contract, indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument" shall mean any
contract, indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument that is required to be filed as an exhibit to the Company's
registration statement on Form S-1 pursuant to Section 601(b) of Regulation S-K
under the 1933 Act Regulations ("Regulation S-K"). Neither the Company nor any
of the Subsidiaries is in material violation of any order, writ, injunction,
judgment or decree of any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of the
Subsidiaries or over any of their respective property.
(xiii) Except as described in the Prospectus, the Company or all
Subsidiaries have operated and currently operate their business in conformity
with all applicable laws, rules and regulations of each jurisdiction in which it
is conducting business, except where the failure to be so in compliance would
not have a material adverse effect on the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations of the
Company and the Subsidiaries, considered as a single enterprise. The operations
of the Company and its Subsidiaries with respect to any real property currently
leased, owned or managed by the Company or any Subsidiary are in material
compliance with all federal, state and local laws, ordinances, rules and
regulations relating to occupational health and safety and the environment. The
Company and each of the Subsidiaries operates its business as described in the
Prospectus and has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits"), including, without
limitation, under any applicable environmental laws and any applicable state
laws to furnish assisted living services as described under the heading
"Business - Services" on page 27 of the Prospectus, as are necessary to own,
lease and operate its respective properties and to conduct its business in the
manner described in the Prospectus, except where the failure to obtain any
required permit would not have a material adverse effect on the condition
(financial or otherwise), business, prospects, properties, net worth or results
of operations of the Company and the Subsidiaries, considered as a single
enterprise; the Company and each of the Subsidiaries has fulfilled and performed
all of its material obligations with respect to such permits and no event has
occurred which allows, or after
6
<PAGE>
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any such
permit; and, except as described in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or any of the
Subsidiaries. The Company and the Subsidiaries are not aware of any existing or
imminent matter which could reasonably be expected to adversely impact the
operations or business prospects of the Company and the Subsidiaries, considered
as a single enterprise, other than as disclosed in the Prospectus.
(xiv) This Agreement has been duly authorized, executed, and
delivered by the Company, and, assuming due authorization, execution, and
delivery hereof by the Representatives on behalf of the Underwriters, is a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms; and at the Representation Date, the Pricing Agreement
will have been duly authorized, executed, and delivered by the Company and,
assuming due authorization, execution, and delivery thereof by the
Representatives on behalf of the Underwriters, will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms; provided that the enforceability of this Agreement and the Pricing
--------
Agreement may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general principles of equity; provided
--------
further that the indemnification provisions of this Agreement may be
- -------
unenforceable under general principles of equity or public policy.
(xv) The issuance and sale of the Firm Shares and the Option Shares
by the Company, the performance by the Company and the Subsidiaries of their
respective obligations under this Agreement, the Pricing Agreement, and the
consummation of the transactions herein and therein contemplated, including the
application of the net proceeds from the sale of the Firm Shares and the Option
Shares as described in the Prospectus will not (A) conflict with or result in a
breach or violation of any of the terms or provisions of, constitute a default
under, or result in the acceleration of the maturity of any indebtedness under,
any material contract, indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which the Company or any Subsidiary is
a party or by which the Company or any Subsidiary is bound or to which any of
the property or assets of the Company or any Subsidiary is subject, (B) result
in any violation of the provisions of the charter or by-laws or other
organizational documents, as the case may be, of the Company or any Subsidiary,
or any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any Subsidiary or any of
their respective properties, or (C) result in the loss of tax-exempt status of
any tax exempt bonds described in the Prospectus. For purposes of this paragraph
the phrase "material contract, indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument" shall mean any contract,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument that is required to be filed as an exhibit to the Company's
registration statement on Form S-1 pursuant to Section 601(b) of Regulation S-K.
(xvi) Except to the extent obtained prior to the Closing Time, no
consent, approval, authorization, order, registration or qualification of or
with any court or governmental agency or
7
<PAGE>
body or any other person is required for the issue and sale of the Shares or the
consummation by the Company and the Subsidiaries of the transactions
contemplated by this Agreement and the Pricing Agreement except the registration
under the 1933 Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters.
(xvii) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the Company or
any Subsidiary is a party or of which any property of the Company or any
Subsidiary is the subject which, (i) are required to be set forth in the
Registration Statement or (ii) if determined adversely to the Company or any
Subsidiary, would individually or in the aggregate be reasonably expected to
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries, considered as a single enterprise and, to the best knowledge of
the Company, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(xviii) The Company and the Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them, as described in the Prospectus, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially adversely affect the
value of such property and do not materially adversely interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings described in the Prospectus as
being held under lease by the Company or any Subsidiary are held by it under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially adversely interfere with the use made and
proposed to be made of such property and buildings by the Company and the
Subsidiaries.
(xix) Assuming that the agreements to which the Company or any of
the Subsidiaries is a party described in the Registration Statement and
Prospectus have been duly authorized, executed and delivered by all parties
thereto (other than the Company or any affiliate of the Company), such
agreements are valid agreements, enforceable by the Company and the Subsidiaries
(as applicable), except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles and, to the Company's knowledge, the other contracting party or
parties thereto are not in material breach or material default under any of such
agreements.
(xx) Except as disclosed in the Prospectus, there are no
consensual encumbrances or restrictions on the ability of any Subsidiary (i) to
pay any dividends or make any distributions on the capital stock of any
Subsidiary which is a Corporate Subsidiary or the partnership interests of any
Subsidiary which is a Partnership Subsidiary or to pay any indebtedness owed to
the Company or any other Subsidiary, (ii) to make any loans or advances to, or
investments in, the Company or any other Subsidiary, or (iii) to transfer any of
its properties or assets to the Company or any other Subsidiary.
(xxi) The Company and the Subsidiaries maintain insurance with
insurers of
8
<PAGE>
recognized financial responsibility of the types and in the amounts generally
deemed adequate for their respective businesses and consistent with customary
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company or the Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(xxii) Neither the Company nor any of the Subsidiaries is, or after
giving effect to the issuance and sale of the Shares by the Company, will be (i)
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (ii) a "holding company" or a "subsidiary company"
of a "registered holding company," as defined in the Public Utility Holding
Company Act of 1935, as amended.
(xxiii) Except as disclosed in the Prospectus, no holder of any
securities of the Company has any rights to require the Company to register any
securities of the Company under the 1933 Act.
(xxiv) Other than this Agreement and the Pricing Agreement, the
Company is not a party to any contract, agreement or understanding with any
person that would give rise to a valid claim against the Company for a brokerage
commission, finder's fee or like payment in connection with the sale of the
Shares.
(xxv) [reserved]
(xxvi) [reserved]
(xxvii) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed therein by
Item 404 of Regulation S-K.
(xxviii) The Company and each of the Subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxix) Neither the Company nor any of the Subsidiaries, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company or any Subsidiary has, directly or indirectly, used any corporate funds
for unlawful contributions, gift, entertainment or other unlawful expenses
related to foreign or domestic political activity; made any unlawful payment to
9
<PAGE>
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds; failed to disclose fully
any contribution in violation of law; violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or made any
unlawful bribe, rebate, payoff, influence, kick-back or other unlawful payment.
(xxx) No statement, representation, warranty or covenant made by
the Company in any certificate or document required by this Agreement to be
delivered to the Underwriters was or will be, when made, inaccurate, untrue or
incorrect in any material respect.
(xxxi) Neither the Company nor any of its directors, officers or
controlling persons, has taken or will take, directly or indirectly, any action
resulting in a violation of Rule 102 of Regulation M under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or designed to cause or
result in or that has constituted or reasonably might be expected to constitute,
the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING; RESERVATION OF
SHARES.
2(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to the Underwriters the Firm Shares in the aggregate, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in the Pricing Agreement, the number of Firm
Shares set forth in Schedule A hereto opposite the name of such Underwriter
----------
(except as otherwise provided in the Pricing Agreement), plus any additional
number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to Section 9 hereof.
---------
If the Company has elected not to rely upon Rule 430A under the 1933 Act
Regulations, the public offering price and the purchase price per share to be
paid by the Underwriters for the Shares have each been determined and set forth
in the Pricing Agreement, dated the date hereof, and an amendment to the
Registration Statement and the Prospectus reflecting such information will be
filed before the Registration Statement becomes effective.
If the Company has elected to rely upon Rule 430A under the 1933 Act
Regulations, the purchase price per share to be paid by the Underwriters for the
Shares shall be an amount equal to the public offering price, less an amount per
share to be determined by agreement between the Representatives and the Company.
The public offering price per share of the Shares shall be a fixed price to be
determined by agreement between the Representatives and the Company. The public
offering price and the purchase price, when so determined, shall be set forth in
the Pricing Agreement. In the event that such prices have not been agreed upon
and the Pricing Agreement has not been executed and delivered by all parties
thereto by the close of business on the fourth business day following the date
of this Agreement, this Agreement shall terminate forthwith, without liability
of any party to any other party hereunder other than pursuant to Section 6
--------
hereof, unless otherwise agreed to by the Company and the Representative.
10
<PAGE>
2(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Underwriters to purchase up to an
additional [Amount and Type of Security], as Option Shares, at the price per
share set forth in the Pricing Agreement. The option hereby granted will expire
30 days after the date hereof (or, if the Company has elected to rely upon Rule
430A under the 1933 Act Regulations, 30 days after the Representation Date) and
may be exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Firm Shares upon notice by the Representatives to the
Company setting forth the number of Option Shares as to which the Underwriters
are then exercising the option and the time, date and place of payment and
delivery for such Option Shares. Any such time and date of delivery (an "Option
Closing Date") shall be determined by the Representatives but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time (as hereinafter defined) unless otherwise agreed
upon by the Representatives and the Company. If the option is exercised as to
all or any portion of the Option Shares, the Option Shares shall be purchased by
the Underwriters, severally and not jointly, in proportion to their respective
Firm Share underwriting obligations as set forth in Schedule A hereto (except as
---------
may be otherwise provided in the Pricing Agreement).
2(c) Payment of the purchase price for and delivery of certificates for
the Firm Shares (the "Closing") shall be made at the offices of [Name and
Address of Lead Underwriter], or at such other place as shall be agreed upon by
the Representatives and the Company, at 10:00 a.m., Washington, D.C. time, on
the third business day following the date the Registration Statement becomes
effective if the sale of the Shares is priced before 4:30 p.m. Eastern time or
on the fourth business day following the date the Registration Statement becomes
effective if the sale of the Shares is priced after 4:30 p.m. Eastern time (or,
if the Company has elected to rely upon Rule 430A, the third business day after
the Representation Date (or the fourth business day after the Representation
Date if the sale of the Shares is priced after 4:30 p.m. Eastern time)), or such
other time not later than 10 business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event that any
or all of the Option Shares are purchased by the Underwriters, payment of the
purchase price for and the delivery of such Option Shares shall be made at the
abovementioned offices of [Name of Lead Underwriter], or at such other place as
shall be mutually agreed upon by the Representatives and the Company, on each
Option Closing Date as specified in the notice from the Representatives to the
Company. Payment shall be made to the Company in same day funds by wire transfer
to an account specified by the Company in accordance with the instructions
provided by the Company, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Shares to be
purchased by the Underwriters. The certificates for the Firm Shares and the
Option Shares shall be in such authorized denominations and registered in such
names as the Representatives may request in writing at least two business days
before Closing Time or each Option Closing Date, as the case may be. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Shares which it has agreed to purchase. [Name of Lead
Underwriter], individually and not as a Representative of the Underwriters, may
(but shall not be obligated to) make payment of the
11
<PAGE>
purchase price for the Shares to be purchased by any Underwriter whose check has
not been received by Closing Time, but such payment shall not relieve such
Underwriter from its obligations hereunder. The certificates for the Firm Shares
and the Option Shares will be made available for examination and packaging by
the Underwriters not later than 10:00 a.m., Washington, D.C. time, on the last
business day prior to Closing Time or each Option Closing Date, as the case may
be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(i) The Company will (i) prepare the Prospectus in a form approved
by the Representatives and file such Prospectus pursuant to Rule 424(b) of the
1933 Act Regulations not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement, or,
if applicable, such earlier time as may be required by Rule 430A(a)(3) of the
1933 Act Regulations; (ii) advise the Representatives, promptly after it
receives notice thereof, of the time when the Registration Statement, or any
amendment thereto, has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed, (iii) advise the
Representatives, promptly after it receives notice thereof, of (A) the receipt
of any comments from the Commission, (B) the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, (C) the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, (D) the initiation or
threatening of any proceeding for any such purpose, or (E) any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; (iv) advise the Representatives
promptly of the occurrence of any event, during such period as a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any additions
to or changes in the Registration Statement or the Prospectus in order to make
any statement of a material fact therein not misleading; and, (v) in the event
of the issuance of any stop order or any order preventing or suspending the use
of any preliminary prospectus or the Prospectus or suspending any such
qualification, use promptly its best efforts to obtain its withdrawal.
(ii) The Company will (i) give the Representatives notice of its
intention to prepare or file any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus that the Company proposes for use
by the Underwriters in connection with the offering of the Shares that differs
from the prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), (ii) furnish
the Underwriters with copies of any such amendments or supplements a reasonable
time prior to the proposed filing or use thereof, and (iii) not file any such
amendment or any supplement or use any such prospectus to which the
Representatives shall reasonably object promptly after reasonable notice
thereof.
(iii) Promptly from time to time, the Company will take such action
as the
12
<PAGE>
Representatives may reasonably request to qualify the Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction.
(iv) The Company will furnish each Underwriter with copies of the
Prospectus in such quantities as such Underwriter may from time to time
reasonably request. If the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Shares, and if at such time any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply with
the 1933 Act and the 1933 Act Regulations, the Company will notify the
Representatives and upon the Representatives' request will prepare and furnish
without charge to the Underwriters and to any dealer in securities as many
copies as the Underwriters may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance In case that the Underwriters
are required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon the Underwriters request but at the Underwriters' expense, the
Company will prepare and deliver to the Underwriters as many copies as the
Underwriters may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the 1933 Act.
(v) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than eighteen months
after the "effective date of the Registration Statement" (as defined in Rule
158(c) of the 1933 Act Regulations), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section 11(a) of
the 1933 Act and the 1933 Act Regulations (including, at the option of the
Company, Rule 158).
(vi) The Company will furnish to its stockholders, as soon as
practicable after the end of each fiscal year, an annual report (including a
balance sheet and statements of income, stockholders' equity and cash flow of
the Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year, consolidated summary financial information
of the Company and its subsidiaries for such quarter in reasonable detail.
(vii) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to the Representatives copies
of all reports or other communications (financial or other) furnished to its
stockholders, and deliver to the Representatives,
13
<PAGE>
as soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange or
quotation system on which any class of securities of the Company is listed.
(viii) The Company will not invest, reinvest or otherwise use the
proceeds received by the Company from the sale of the Firm Shares or Option
Shares in such a manner, or take any action or omit to take any action, that
would cause the Company to become an "investment company" as that term is
defined in the Investment Company Act.
(ix) The Company will use the net proceeds of the sale of the Firm
Shares and Option Shares for the purposes described in the Prospectus under "Use
of Proceeds."
(x) The Company will take all action to ensure that the [Type of
Security] continues to be listed on the [Name of Exchange/Interdealer Quotation
System] or any national securities exchange.
(xi) Except for the authorization of actions permitted to be taken
by the Underwriters as contemplated herein or in the Prospectus, the Company
will not (A) take, directly or indirectly, any action designed to cause or to
result in, or that might reasonably be expected to constitute, the stabilization
or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares, or (B) for a period of 90 days following the
Representation Date: (i) sell, bid for or purchase the Shares or pay any person
any compensation for soliciting purchases of the Shares, or (ii) pay or agree to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
(xii) During the period from the date of the Pricing Agreement until
ninety (90) days after the Closing Time, the Company will not, without the prior
written consent of [Name of Lead Underwriter], directly or indirectly, sell,
offer to sell, grant any option for the sale of, or otherwise dispose of, any
[Type of Security] or any other security convertible into or exchangeable into
or exercisable for [Type of Security], other than (i) in accordance with this
Agreement, (ii) in connection with the Company's stock option plan described in
the Prospectus, or (iii) as otherwise contemplated in the Prospectus.
(xiii) The Company shall use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Time and to satisfy all conditions precedent on
the Company's part to the delivery of the Shares.
SECTION 4. PAYMENTS OF FEES AND EXPENSES. The Company covenants and
agrees with the Underwriters that (a) the Company will pay or cause to be paid
the following: (i) expenses incurred in connection with the printing and filing
of the Registration Statement as originally filed and of each amendment thereto,
(ii) expenses incurred in connection with the preparation, issuance and delivery
of the certificates for the Shares to the Underwriters, (iii) the fees and other
charges of the Company's counsel and accountants, (iv) expenses incurred in
connection with the qualification of the Shares under securities laws, including
filing fees and the reasonable fees and other charges of
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counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Memorandum, (v) expenses incurred in connection with
the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of the preliminary
prospectuses, and of the Prospectus and any amendments or supplements thereto,
(vi) expenses incurred in connection with the printing and delivery to the
Underwriters of copies of the Blue Sky Memorandum; (vii) the fee of the NASD and
(viii) the fees and expenses incurred in connection with the listing of the
[Type of Security] on the [Name of Exchange/Interdealer Quotation System],
including filing and listing fees.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters hereunder, as to the Shares to be delivered at the Closing Time
and each Option Closing Date, shall be subject to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of the Closing Time and such Option Closing Date, true and correct in
all material respects, the condition that the Company shall have performed all
of its obligations hereunder theretofore to be performed, and the following
additional conditions:
5(a) The Registration Statement shall have become effective not later than
5:30 p.m. Eastern time on the first business day following the date hereof, no
stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the Representatives' reasonable satisfaction. If the Company has elected
to rely upon Rule 430A of the 1933 Act Regulations, the price of the Shares and
any price-related information previously omitted from the effective Registration
Statement pursuant to such Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within
the applicable time period prescribed for such filing by the 1933 Act
Regulations and in accordance with Section 3(a) hereof, or a post-effective
------------
amendment providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the 1933 Act
Regulations.
5(b) Winston & Strawn, counsel for the Company, shall have furnished to
the Representatives their written opinion, dated the Closing Time and such
Option Closing Date, in form and substance satisfactory to the Representatives,
to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware and
has the corporate power and authority to own its properties and conduct its
business as described in the Prospectus.
(ii) Each of the Corporate Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to own
its properties and conduct its business as described in the Prospectus.
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(iii) Each Limited Partnership Subsidiary has been formed and is
validly existing under the laws of its jurisdiction of formation and has the
limited partnership power and authority to own its properties and conduct its
business as described in the Prospectus.
(iv) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus; all of the
issued shares of capital stock of the Company as described in the Prospectus
have been duly and validly authorized and issued and are fully paid and
nonassessable; and the terms of such shares of capital stock conform in all
material respects to all statements and descriptions related thereto contained
in the Prospectus and comply with all applicable legal requirements.
(v) The Company and each of the Subsidiaries has been duly
qualified as a foreign corporation, limited partnership, or otherwise, as
appropriate, for the transaction of business and is in good standing (to the
extent applicable) under the laws of each other jurisdiction specified in such
opinion (which shall include each jurisdiction in which the Company or any
Subsidiary owns, leases, or manages properties, or conducts any other business,
so as to require such qualification, or is subject to no material liability or
disability by reason of failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in this clause in
respect of matters of fact upon certificates of officers of the Company and
governmental authorities).
(vi) All of the outstanding shares of capital stock of each
Corporate Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and are directly or indirectly owned by the
Company, free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature known to such counsel.
(vii) To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings, domestic or
foreign, pending to which the Company, any Subsidiary or any officer or director
of the Company or any subsidiary is a party or of which any property of the
Company or any Subsidiary is the subject which are required to be disclosed in
the Prospectus; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company. The Pricing Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The issuance and sale of the Shares being delivered at the
Closing Time and such Option Closing Date by the Company, the performance by the
Company of its obligations under this Agreement and the Pricing Agreement, and
the consummation by the Company and the Subsidiaries, as applicable, of the
transactions herein and therein contemplated, including the application of the
net proceeds from the sale of the Shares as described in the Prospectus will not
(A) conflict with or result in a breach or violation of any of the terms or
provisions of, constitute a default under, or result in the acceleration of the
maturity of any indebtedness under, any material indenture, mortgage, deed of
trust or loan agreement known to such counsel or other material agreement or
16
<PAGE>
instrument known to such counsel to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary is bound or to which any of the
property or assets of the Company or any Subsidiary is subject or (B) result in
any violation of the provisions of the certificate of incorporation or by-laws,
certificate of limited partnership, partnership agreement or other
organizational documents, as the case may be, of the Company or any Subsidiary,
or any statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the Company or any
Subsidiary or any of their respective properties.
(x) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized for issuance and
sale to the Underwriters, and, when issued and delivered by the Company pursuant
to this Agreement against payment of the consideration set forth in the Pricing
Agreement, will be duly and validly issued and fully paid and non-assessable.
The issuance of the Shares is not subject to any preemptive or similar rights.
The terms of the Shares conform in all material respects to all statements and
descriptions related thereto contained in the Prospectus and comply with all
applicable legal requirements. The Shares conform to the provisions of the
Company's charter. The form of share certificate to be used to evidence the
Shares is in due and proper form and complies with all applicable legal
requirements.
(xi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body or other
person is required for the issuance and sale of the Shares by the Company or the
performance by the Company of its obligations under this Agreement and the
Pricing Agreement, and the consummation by the Company and the Subsidiaries, as
applicable, of the transactions herein and therein contemplated, except the
registration under the 1933 Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as have been obtained prior to
the Closing Time or may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters.
(xii) The statements made in the Prospectus and Part II of the
Registration Statement, to the extent such statements constitute a summary of
the legal matters or documents referred to therein, are accurate in all material
respects and fairly present the information required to be shown (it being
understood that such counsel need express no opinion as to the financial
statements and related notes thereto and the other financial, statistical and
accounting data included in the Registration Statement or Prospectus).
(xiii) The Company is not, and (assuming the application by the
Company of the net proceeds of the issue and sale of the Shares in the manner
described in the Prospectus under the caption "Use of Proceeds") after giving
effect to the issuance and sale of the Shares by the Company will not be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act.
(xiv) The Registration Statement, as of the Effective Date, and the
Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the 1933 Act and the
1933 Act Regulations, except that (a) such counsel need
17
<PAGE>
express no opinion as to the financial statements and related notes thereto and
the other financial, statistical, and accounting data included in the
Registration Statement or the Prospectus, and (b) such counsel need express no
opinion or assurance as to the accuracy, completeness or fairness of the
statements contained in the Registration Statement, except to the extent set
forth in paragraph 5(b)(xii) and the paragraph immediately following paragraph
5(b)(xvi).
(xv) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applicable
environmental laws, as are necessary to own, lease and operate its respective
properties and to conduct its business in the manner described in the Prospectus
except where the failure to obtain any required permit would not have a material
adverse effect on the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries, considered as a single enterprise; to such counsel's knowledge
after due inquiry, the Company and each of the Subsidiaries has fulfilled and
performed all of its material obligations with respect to such permits and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus, and, except as described in
the Prospectus, such permits contain no restrictions that are materially
burdensome to the Company or any of the Subsidiaries.
(xvi) To the knowledge of such counsel, there are no contracts or
documents of a character that are required to be described in the Prospectus or
filed as exhibits to or incorporated by reference into the Registration
Statement by the 1933 Act or the 1933 Act Regulations that have not been so
described or filed.
In giving its opinion required by this Section 5(b) such counsel shall
------------
additionally state that, although it has not independently verified and is not
passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or Prospectus
(except to the extent set forth in paragraph (xiii) above), no facts have come
to the attention of such counsel that cause such counsel to believe that (A) the
Registration Statement or any further amendment thereto at the time it became
effective under the 1933 Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the 1933 Act), contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
(it being understood that such counsel need express no opinion as to the
financial statements and related notes thereto and the other financial,
statistical, and accounting data included in the Registration Statement or the
Prospectus) or that (B) the Prospectus or any further amendment or supplement
thereto on the date it was filed pursuant to the 1933 Act Regulations and as of
the Closing Time or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading (it being understood that such counsel need
express no opinion as to the financial statements and related notes thereto and
the other financial, statistical, and accounting data included in the
Registration Statement or the Prospectus).
18
<PAGE>
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the United
States, the general corporate law of Illinois and the general corporate law of
Delaware.
5(c) [Name of Underwriters' Counsel], counsel for the Underwriters, shall
have furnished to the Representatives such opinion or opinions, dated the
Closing Time and the Option Closing Date, as the case may be, with respect to
the incorporation of the Company, this Agreement, the Pricing Agreement, the
validity of the Shares being delivered at the Closing Time and such Option
Closing Date, as the case may be, the Registration Statement, the Prospectus,
and other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters.
5(d) At the time of the execution of this Agreement and on the effective
date of any post-effective amendment to the Registration Statement and also at
the Closing Time and each Option Closing Date, Ernst & Young LLP shall have
furnished to the Representatives a letter or letters, dated the respective date
of delivery thereof, in form and substance satisfactory to the Representatives,
to the effect set forth in Annex I hereto and, if the Company has elected to
-------
rely upon Rule 430A of the 1933 Act Regulations, to the further effect that they
have carried out procedures specified in paragraph (v) of Annex I with respect
-------
to certain amounts, percentages, and financial information specified by the
Representatives and deemed to be part of the Registration Statement pursuant to
Rule 430A(b) and have found such amounts, percentages and financial information
to be in agreement with the records specified in such paragraph (v).
5(e) The Registration Statement and the Prospectus shall contain all
statements that are required to be stated therein in accordance with the 1933
Act and the 1933 Act Regulations and shall conform in all material respects to
the requirements of the 1933 Act and the 1933 Act Regulations. Neither the
Registration Statement nor the Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
5(f) No action, suit, or proceeding at law or in equity shall be pending
or, to the knowledge of the Company, be threatened against the Company or any
Subsidiary, that would be required to be described in the Prospectus other than
as described therein.
5(g) (A) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus (i) any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or otherwise),
business, prospects, properties, net worth or results of operations, whether or
not arising in the ordinary course of business or (ii) any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus,
and (B) since the respective dates as of which information is given in the
Prospectus, there shall not have been any change in the capital stock or long-
term debt of the Company or any Subsidiary or any
19
<PAGE>
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and the Subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (A) or (B), is in the Representatives' judgment so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at the Closing
Time or such Option Closing Date on the terms and in the manner contemplated in
the Prospectus.
5(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation of trading in securities
generally on either the Nasdaq National Market or any national stock exchange;
(ii) a general moratorium on commercial banking activities declared by either
Federal or District of Columbia authorities; or (iii) the outbreak or material
escalation of major hostilities involving the United States or the declaration
by the United States of a national emergency or war or any other calamity or
crisis or material adverse change in general economic, political or financial
conditions having an effect on the U. S. financial markets, if the effect of any
such event specified in this clause (iii), in the Representatives' judgment,
makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at the Closing Time or such Option
Closing Date on the terms and in the manner contemplated by the Prospectus.
5(i) The Shares to be sold by the Company at the Closing Time and such
Option Closing Date shall have been duly authorized for inclusion on the [Name
of Exchange/Interdealer Quotation System].
5(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Closing Time and such Option Closing Date certificates of
officers of the Company satisfactory to the Underwriters as to the accuracy of
the representations and warranties of the Company herein at and as of such
Closing Time and Option Closing Date, as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to such Closing
Time and Option Closing Date, as to the matters set forth in subsections (a) and
(e) through (g) of this Section and as to such other matters as the
Representatives may reasonably request.
If any condition specified in this Section 5 shall not have been fulfilled
---------
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Company at any time at or prior to the Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 8 hereof.
---------
SECTION 6. INDEMNIFICATION.
6(a) The Company will indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act, against any losses, claims, damages, or liabilities to which
any Underwriter or such controlling person may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged
20
<PAGE>
untrue statement of a material fact contained in any preliminary prospectus, the
Registration Statement, or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Underwriters and
such controlling persons for any legal or other expenses reasonably incurred by
the Underwriters or such controlling persons in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that (i) the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in the first, second or fourth paragraph under the caption "Underwriting"
in the Prospectus and (ii) such indemnity with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriters (or any person
controlling the Underwriters) if the person asserting any such loss, claim,
damage or liability did not receive a copy of the Prospectus (or the Prospectus
as supplemented) at or prior to the confirmation of the sale of Shares to such
person in any case where such delivery is required by the 1933 Act and the
untrue statement or omission of a material fact contained in such preliminary
prospectus was corrected in the Prospectus (or the Prospectus as supplemented).
6(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and each of the Company's directors, each officer of the Company who
signed the Registration Statement and each other person who controls the Company
within the meaning of the 1933 Act, against any losses, claims, damages, or
liabilities to which the Company or each such other person may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the first, second
or fourth paragraph under the caption "Underwriting" in the Prospectus, and will
reimburse the Company or each such other person for any legal or other expenses
reasonably incurred by the Company or such other person in connection with
investigating or defending any such action or claim as such expenses are
incurred.
6(c) Promptly after receipt by an indemnified party under subsection 6(a)
---------------
or above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the
21
<PAGE>
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation, unless such
indemnified party reasonably objects to such assumption on the ground that the
named parties to any such action (including any impleaded parties) include both
such indemnified party and an indemnifying party and such indemnified party
reasonably believes that there may be legal defenses available to it that are
different from or in addition to those available to such indemnifying party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or separate but
similar related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
6(d) If the indemnification provided for in this Section 6 is unavailable
---------
to, or insufficient to hold harmless, an indemnified party under subsection 6(a)
---------------
or (b) above in respect of any losses, claims, damages or liabilities (or
---
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection 6(c)
---------------
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters
with respect to the Shares purchased under this Agreement, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault 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 on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection 6(d) were determined by
---------------
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection 6(d). The
---------------
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection 6(d) shall be deemed to include any legal or other expenses
---------------
22
<PAGE>
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection 6(d), no Underwriter shall be required to contribute any amount in
- ---------------
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter 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 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute pursuant to this Section 6(d) are
------------
several in proportion to the respective number of shares purchased by each of
the Underwriters hereunder and not joint.
6(e) The obligations of the Company under this Section 6 shall be in
---------
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Underwriters within the meaning of the 1933 Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability which
the Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the 1933 Act.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and other
statements of the Company and the Underwriters, as set forth in this Agreement
and the Pricing Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of the Underwriters or any controlling person of the Underwriters, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
SECTION 8. TERMINATION OF AGREEMENT. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time, pursuant to Section 5. The Company shall then be under no further
liability to the Underwriters in respect of the Shares not so delivered except
as provided in Section 4 and Section 6 hereof.
SECTION 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at Closing Time to purchase the Shares which it or
they are obligated to purchase under this Agreement and the Pricing Agreement
(the "Defaulted Shares"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Shares in such amounts as may be agreed upon and upon the terms
herein set forth, if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
23
<PAGE>
(a) if the number of Defaulted Shares does not exceed ten percent (10%) of
the Shares, the non-defaulting Underwriters shall be obligated to purchase the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all non-defaulting
Underwriters; or
(b) if the number of Defaulted Shares exceeds ten percent (10%) of the
Shares, this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, the Representatives and the Company each shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
SECTION 10. NOTICES. All statements, requests, notices and agreements
hereunder shall be in writing, and, if to the Underwriters, shall be delivered
or sent by mail or facsimile transmission to [Name and Address of Lead
Underwriter], Attention: ____________ (fax no. ___-___-_____; if to the Company,
shall be delivered or sent by mail or facsimile transmission to the address of
the Company set forth in the Registration Statement, Attention: Mark J. Schulte
(fax no. 312-917-0460), with a copy to Robert J. Rudnik, Esq. (fax no. 312-977-
3701). Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
SECTION 11. PARTIES. This Agreement and the Pricing Agreement shall be
binding upon, and inure solely to the benefit of, (i) the Underwriters and the
Company and (ii) to the extent provided in Sections 6 and 7 hereof, the officers
and directors of the Company and the Underwriters and each person who controls
the Company or the Underwriters, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or the Pricing Agreement.
No purchaser of any of the Shares from the Underwriters shall be deemed a
successor or assign merely by reason of such purchase.
SECTION 12. TIME OF ESSENCE. Time shall be of the essence of this
Agreement and the Pricing Agreement. As used herein, the term "business day"
shall mean any day when the Commission's office in Washington, D.C. is open for
business.
SECTION 13. CHOICE OF LAW. This Agreement and the Pricing Agreement shall
be governed by and construed in accordance with the internal laws of the State
of Illinois (without regard to conflict of laws provisions thereof).
SECTION 14. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
24
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and, upon such acceptance hereof by the
Representatives, this letter and such acceptance hereof shall constitute a
binding agreement between the Underwriters and the Company.
[Signatures on Next Page]
25
<PAGE>
Very truly yours,
BROOKDALE LIVING
COMMUNITIES, INC.
By:________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[NAME(S) OF REPRESENTATIVE(S) OF THE UNDERWRITERS]
As Representatives of the
Several Underwriters listed
on Schedule A attached hereto
By: [Name of Lead Underwriter]
By:_______________________
Name:
Title:
26
<PAGE>
SCHEDULE A
Number of Firm
Shares to be
Underwriter Purchased
Total Underwriters........................................
27
<PAGE>
ANNEX I
Pursuant to Section 5(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Representatives to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the 1933 Act and the
applicable rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplemental
financial information and schedules audited (and, if applicable, and/or pro
forma financial information examined) by them and included in the Prospectus or
the Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the related published
rules and regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the unaudited consolidated interim financial statements as
indicated in their reports thereon, copies of which have been furnished to the
Underwriters;
(iii) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years for such fiscal
years;
(iv) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred to
below, a reading of the latest available interim financial statements of the
Company and its subsidiaries, inspection of the minute books of the Company and
its subsidiaries since the date of the latest audited financial statements
included in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows included
in the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the related published
rules and regulations thereunder, or are not in conformity with generally
accepted accounting principles applied on a basis substantially consistent with
the basis for the audited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the corresponding items
in the unaudited consolidated
28
<PAGE>
financial statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the Prospectus;
(D) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon conversions
of convertible securities, in each case which were outstanding on the date of
the latest financial statements included in the Prospectus) or any increase in
the consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or other items specified by the
Underwriters or any increases in any items specified by the Underwriters, in
each case as compared with amounts shown in the latest balance sheet included in
the Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described in
such letter; and
(E) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to in
Clause (D) there were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net income or other
items specified by the Underwriters, or any increases in any items specified by
the Underwriters, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified by
the Underwriters, except in each case for decreases or increases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; and
(v) In addition to the audit referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and (iv)
above, they have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Underwriters, which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus, or in Part II of,
or in exhibits and schedules to, the Registration Statement specified by the
Underwriters, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
29
<PAGE>
EXHIBIT A
BROOKDALE LIVING COMMUNITIES, INC.
(a Delaware corporation)
[Amount and Type of Security]
PRICING AGREEMENT
, 199_
[NAME(S) OF REPRESENTATIVE(S) OF
UNDERWRITERS]
As Representatives of the Several Underwriters
[Name and Address of
Lead Underwriter]
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated ____________, 199_
(the "Underwriting Agreement"), relating to the purchase by [Name of Lead
Underwriter] and those underwriters listed on Schedule A thereto (collectively,
the "Underwriters") of the Firm Shares and Option Shares (as each such term is
defined in the Underwriting Agreement (collectively, the "Shares")), of
Brookdale Living Communities, Inc. (the "Company").
Pursuant to Section 2 of the Underwriting Agreement, the Company agrees
with each Underwriter as follows:
1. The public offering price per share for the Shares determined as
provided in such Section 2, shall be $ .
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $ , being an amount equal to the public offering
price set forth above less $ per share.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
30
<PAGE>
Very truly yours,
BROOKDALE LIVING
COMMUNITIES, INC.
By:____________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[NAME(S) OF REPRESENTATIVE(S) OF THE
UNDERWRITERS]
As Representatives of the
Several Underwriters listed
on Schedule A attached hereto
By: [Name of Lead Underwriter]
By:_______________________
Name:
Title:
31
<PAGE>
EXHIBIT 4.2
================================================================================
BROOKDALE LIVING COMMUNITIES, INC.
TO
STATE STREET BANK AND TRUST COMPANY
as Trustee
____________
FORM OF INDENTURE
Dated as of ____________, 199_
Providing for Issuance of Senior
Debt Securities in Series
================================================================================
<PAGE>
BROOKDALE LIVING COMMUNITIES, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
(S) 310(a) (1)........................................................................609
(a) (2)...........................................................................609
(a) (3)................................................................Not Applicable
(a) (4)............................................................... Not Applicable
(b)..........................................................................608, 610
(S) 311(a)............................................................................613
(b) ............................................................................613
(S) 312(a)....................................................................701, 702(a)
(b)............................................................................702(b)
(c)........................................................................... 702(c)
(S) 313(a).........................................................................703(a)
(b)............................................................................703(a)
(c)............................................................................703(a)
(d)........................................................................... 703(b)
(S) 314(a)........................................................................... 704
(a)(4).......................................................................101, 704
(b)....................................................................Not Applicable
(c)(1)........................................................................... 102
(c)(2)........................................................................... 102
(c)(3)................................................................ Not Applicable
(d)................................................................... Not Applicable
(e).............................................................................. 102
(S) 315(a)........................................................................... 601
(b).............................................................................. 602
(c).............................................................................. 601
(d).............................................................................. 601
(e).............................................................................. 514
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
(S) 316(a)........................................................................... 101
(a)(1)(A)................................................................... 502, 512
(a)(1)(B)........................................................................ 513
(a)(2)................................................................ Not Applicable
(b).............................................................................. 508
(c)............................................................................104(c)
(S) 317(a)(1)........................................................................ 503
(a)(2)........................................................................... 504
(b)..............................................................................1003
(S) 318(a)........................................................................... 107
</TABLE>
________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-ii-
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE ONE
Definitions and Other Provisions of General Application.................................1
Section 101. Definitions..............................................................1
Section 102. Compliance Certificates and Opinions.....................................8
Section 103. Form of Documents Delivered to Trustee...................................8
Section 104. Acts of Holders; Record Dates............................................9
Section 105. Notices, Etc., to Trustee and Company...................................10
Section 106. Notice to Holders; Waiver...............................................10
Section 107. Conflict with Trust Indenture Act.......................................11
Section 108. Effect of Headings and Table of Contents................................11
Section 109. Successors and Assigns..................................................11
Section 110. Separability Clause.....................................................11
Section 111. Benefits of Indenture...................................................11
Section 112. Governing Law...........................................................11
Section 113. Legal Holidays..........................................................11
ARTICLE TWO
Security Forms.........................................................................12
Section 201. Forms Generally.........................................................12
Section 202. Form of Face of Security................................................12
Section 203. Form of Reverse of Security.............................................14
Section 204. Additional Provisions Required in Book-Entry Security...................18
Section 205. Form of Trustee's Certificate of Authentication.........................18
ARTICLE THREE
The Securities.........................................................................19
Section 301. Amount Unlimited; Issuable in Series....................................19
Section 302. Denominations...........................................................21
Section 303. Execution, Authentication, Delivery and Dating..........................21
Section 304. Temporary Securities....................................................23
Section 305. Registration, Registration of Transfer and Exchange.....................24
Section 306. Mutilated, Destroyed, Lost and Stolen Securities........................25
Section 307. Payment of Interest; Interest Rights Preserved..........................26
Section 308. Persons Deemed Owners...................................................27
Section 309. Cancellation............................................................28
Section 310. Computation of Interest.................................................28
Section 311. CUSIP Numbers...........................................................28
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
ARTICLE FOUR
Satisfaction and Discharge............................................................28
Section 401. Satisfaction and Discharge of Indenture................................28
Section 402. Application of Trust Money.............................................29
ARTICLE FIVE
Remedies..............................................................................30
Section 501. Events of Default......................................................30
Section 502. Acceleration of Maturity; Rescission and Annulment.....................31
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee........32
Section 504. Trustee May File Proofs of Claim.......................................32
Section 505. Trustee May Enforce Claims Without Possession of Securities............33
Section 506. Application of Money Collected.........................................33
Section 507. Limitation on Suits....................................................34
Section 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.........................................................34
Section 509. Restoration of Rights and Remedies.....................................34
Section 510. Rights and Remedies Cumulative.........................................35
Section 511. Delay or Omission Not Waiver...........................................35
Section 512. Control by Holders.....................................................35
Section 513. Waiver of Past Defaults................................................36
Section 514. Undertaking for Costs..................................................36
ARTICLE SIX
The Trustee...........................................................................36
Section 601. Certain Duties and Responsibilities....................................36
Section 602. Notice of Defaults.....................................................37
Section 603. Certain Rights of Trustee..............................................37
Section 604. Not Responsible for Recitals or Issuance of Securities.................38
Section 605. May Hold Securities and Serve as Trustee Under Other Indentures........38
Section 606. Money Held in Trust....................................................38
Section 607. Compensation and Reimbursement.........................................38
Section 608. Disqualification; Conflicting Interests................................39
Section 609. Corporate Trustee Required; Eligibility................................39
Section 610. Resignation and Removal; Appointment of Successor......................40
Section 611. Acceptance of Appointment by Successor.................................41
Section 612. Merger, Conversion, Consolidation or Succession to Business............42
Section 613. Preferential Collection of Claims Against Company......................43
Section 614. Investment of Certain Payments Held by the Trustee.....................43
Section 615. Appointment of Authenticating Agent....................................43
</TABLE>
-iv-
<PAGE>
<TABLE>
<S> <C>
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company.......................................45
Section 701. Company to Furnish Trustee Names and Addresses of Holders................45
Section 702. Preservation of Information; Communications to Holders...................45
Section 703. Reports by Trustee.......................................................46
Section 704. Reports by Company.......................................................46
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease....................................46
Section 801. Company May Consolidate, Etc., Only on Certain Terms.....................46
Section 802. Successor Substituted....................................................47
Section 803. Officers' Certificate and Opinion of Counsel.............................47
ARTICLE NINE
Supplemental Indentures.................................................................47
Section 901. Supplemental Indentures Without Consent of Holders.......................47
Section 902. Supplemental Indentures with Consent of Holders..........................49
Section 903. Execution of Supplemental Indentures.....................................50
Section 904. Effect of Supplemental Indentures........................................50
Section 905. Conformity with Trust Indenture Act......................................50
Section 906. Reference in Securities to Supplemental Indentures.......................50
ARTICLE TEN
Covenants...............................................................................50
Section 1001. Payment of Principal, Premium and Interest...............................50
Section 1002. Maintenance of Office or Agency..........................................50
Section 1003. Money for Securities Payments to Be Held in Trust........................51
Section 1004. Payment of Taxes and Other Claims........................................52
Section 1005. Maintenance of Operating Properties......................................53
Section 1006. Corporate Existence......................................................53
Section 1007. Limitation upon Liens....................................................53
Section 1008. Limitation upon Sales and Leasebacks.....................................55
Section 1009. Waiver of Certain Covenants..............................................56
Section 1010. Compliance Certificate...................................................57
ARTICLE ELEVEN
Redemption of Securities................................................................57
</TABLE>
-v-
<PAGE>
<TABLE>
<S> <C>
Section 1101. Applicability of Article.................................................57
Section 1102. Election to Redeem: Notice to Trustee....................................57
Section 1103. Selection by Trustee of Securities to Be Redeemed........................58
Section 1104. Notice of Redemption.....................................................58
Section 1105. Deposit of Redemption Price..............................................59
Section 1106. Securities Payable on Redemption Date....................................59
Section 1107. Securities Redeemed in Part..............................................60
ARTICLE TWELVE
Sinking Funds...........................................................................60
Section 1201. Applicability of Article.................................................60
Section 1202. Satisfaction of Sinking Fund Payments with Securities....................60
Section 1203. Redemption of Securities for Sinking Fund................................61
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance......................................................61
Section 1301. Applicability of Article; Company's Option to Effect Defeasance or Covenant
Defeasance...............................................................61
Section 1302. Defeasance and Discharge.................................................61
Section 1303. Covenant Defeasance......................................................62
Section 1304. Conditions to Defeasance or Covenant Defeasance..........................62
Section 1305. Deposited Money and U.S. Government Obligations to be Held in Trust;
Other Miscellaneous Provisions...........................................64
Section 1306. Reinstatement............................................................65
Section 1307. Qualifying Trustee.......................................................65
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers, Directors and Employees..............65
Section 1401. Exemption from Individual Liability......................................65
</TABLE>
__________________
NOTE: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-vi-
<PAGE>
INDENTURE, dated as of __________, 199_, between Brookdale Living
Communities, Inc., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal office
at 77 West Wacker Drive, Chicago, Illinois 60601, and State Street Bank and
Trust Company, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior
unsubordinated unsecured debentures, notes or other evidences of indebtedness
(herein called the "Securities"), to be issued in one or more series as provided
in this Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation in the United States of
America; and
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and
<PAGE>
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt," in respect of any Sale and Leaseback Transaction,
means, as of the time of determination, the total obligation (discounted to
present value at the rate per annum equal to the discount rate which would be
applicable to a capital lease obligation with like term in accordance with
generally accepted accounting principles) of the lessee for rental payments
(other than amounts required to be paid on account of property taxes,
maintenance, repairs, insurance, water rates and other items which do not
constitute payments for property rights) during the remaining portion of the
initial term of the lease included in such Sale and Leaseback Transaction.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 615 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a Security in the form prescribed in
Section 204 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee, and registered in the name of such
Depositary or such nominee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution
-2-
<PAGE>
of this instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Financial Officer, a Vice Chairman
of the Board, a Vice Chairman or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Controller, an Assistant Controller, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Assets" means the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom all current liabilities (excluding any indebtedness for money borrowed
having a maturity of less than 12 months from the date of the most recent
consolidated balance sheet of the Company but which by its terms is renewable or
extendable beyond 12 months from such date at the option of the borrower) all as
set forth on the most recent consolidated balance sheet of the Company and
computed in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of original execution of this Indenture
is located at _______________________, except that, with respect to presentation
of the Securities for payment or registration of transfers or exchanges and the
location of the register, such term means the office or agency of the Trustee at
which at any particular time its corporate agency business shall be conducted.
"Debt" has the meaning specified in Section 1007.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the Person designated as Depositary for such series by the Company
pursuant to Section 301, which Person shall be a clearing agency registered
under the Securities Exchange Act of 1934; and if at any time there is more than
one such Person, "Depositary" as used with respect to the Securities of any
series shall mean the Depositary with respect to the Securities of such series.
"Event of Default" has the meaning specified in Section 501.
-3-
<PAGE>
"Funded Debt" means all Debt having a maturity of more than 12 months
from the date as of which the determination is made or having a maturity of 12
months or less but by its terms being renewable or extendable beyond 12 months
from such date at the option of the borrower, but excluding any such Debt owed
to the Company or a Restricted Subsidiary.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the forms and terms of
particular series of Securities established as contemplated by Section 301.
"Indexed Security" means any Security which provides that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Financial
Officer, a Vice Chairman of the Board, a Vice Chairman or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Controller, an Assistant
Controller, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Operating Property" means any real property or equipment located
within the United States and used primarily for providing senior independent and
assisted living services to the elderly by the Company or any of its
Subsidiaries that has a net book value (after deduction of accumulated
depreciation) in excess of 2.0% of Consolidated Net Assets, other than any such
real property or equipment (i) which is financed by obligations issued by a
State, Commonwealth, Territory or possession of the United States of America, or
any political subdivision or governmental
-4-
<PAGE>
authority of any of the foregoing, or the District of Columbia or (ii) which, in
the opinion of the Board of Directors of the Company, is not of material
importance to the total business conducted by the Company and its Restricted
Subsidiaries taken as a whole.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities; provided, that if such Securities are to be redeemed, notice
--------
of such redemption has been duly given pursuant to Section 1104 of this
Indenture or provision therefor satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1302 and
1303, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Thirteen; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder, or whether sufficient funds are available for redemption or
for any other purpose, and for the purpose of making the calculations required
by Section 313 of the Trust Indenture Act, (i) the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable as of the date
of such determination upon acceleration of the Maturity thereof pursuant to
Section 502, (ii) the principal amount of a Security denominated in one or more
foreign currencies or currency units shall be the U.S. dollar equivalent,
determined in the manner
-5-
<PAGE>
provided as contemplated by Section 301 on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
(iii) the principal amount of any Indexed Security that may be counted in making
such determination or calculation and that shall be deemed to be Outstanding for
such purpose shall be equal to the principal face amount of such Indexed
Security at original issuance, unless otherwise provided with respect to such
Security pursuant to Section 301, and (iv) except for the purpose of making the
calculations required by Section 313 of the Trust Indenture Act, Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
-6-
<PAGE>
"Responsible Officer", when used with respect to the Trustee, means
any vice president, any assistant secretary, any assistant treasurer, any senior
trust officer, any trust officer or assistant trust officer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Subsidiary" means any Subsidiary of the Company that owns
any Operating Property.
"Sale and Leaseback Transaction" means any arrangement with any bank,
insurance company or other lender or investor (other than the Company or another
Restricted Subsidiary) providing for the leasing by the Company or any
Restricted Subsidiary of any Operating Property (except a lease for a temporary
period not to exceed three years by the end of which it is intended that the use
of such Operating Property by the lessee will be discontinued), which was or is
owned or leased by the Company or a Restricted Subsidiary and which has been or
is to be sold or transferred, more than 120 days after the acquisition or the
completion of construction and commencement of full operation thereof, by the
Company or such Restricted Subsidiary to such lender or investor or to any
Person to whom funds have been or are to be advanced by such lender or investor
on the security of such Operating Property.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power for the
election of directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned by the Company, or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions
-7-
<PAGE>
of this Indenture, and thereafter "Trustee" shall mean or include each Person
who is then a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
Subsidiary.
"U.S. Government Obligations" has the meaning specified in Section
1304.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
-8-
<PAGE>
Section 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or representations by
counsel or an opinion of counsel, unless such officer knows, or in the exercise
of reasonable care should know, that the certificate, representations or opinion
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or representations of counsel or
opinion of counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Company stating that the information with respect to such factual matters is
in the possession of the Company, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders; Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate
-9-
<PAGE>
or affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The Company may fix any day as the record date for the purpose of
determining the Holders of Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders of Securities of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series made by any Person
in respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
Section 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Global Trust
Services, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company, Attention: Treasurer.
Section 106. Notice to Holders; Waiver.
-------------------------
-10-
<PAGE>
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice mailed to a Holder in the
manner herein prescribed shall be conclusively deemed to have been received by
such Holder, whether or not such Holder actually receives such notice. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
-11-
<PAGE>
Section 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 112. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
Section 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date, the Redemption Date, or at the Stated Maturity or
Maturity; provided, that no interest shall accrue for the intervening period.
--------
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
---------------
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by, or by action taken pursuant to, a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
-12-
<PAGE>
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner permitted by
the rules of any securities exchange on which the Securities may be listed, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
------------------------
[insert any legend required by the Internal Revenue Code and the
----------------------------------------------------------------
regulations thereunder.]
- ------------------------
BROOKDALE LIVING COMMUNITIES, INC.
----------------------------------
No. ________________ $_______________________
CUSIP No. _______________________
Brookdale Living Communities, Inc., a corporation duly organized and
existing under the laws 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 ______________________, or registered
assigns, the principal sum of ___________ Dollars on ____________ [if the
------
Security is to bear interest prior to Maturity, insert --, and to pay interest
- ---------------------------------------------------------
thereon from _____________ or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on _______ and
______ in each year, commencing ___________________________, at the rate of %
per annum, until the principal hereof is paid or made available for payment [if
--
applicable, insert -- and (to the extent that the payment of such interest
- ----------
shall be legally enforceable) at the rate of % per annum on any overdue
principal and premium and on any overdue installment of interest]. 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 Security (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
_______ or _______ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (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 shall be given to Holders of Securities
of this series 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 Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert --
-----------------------------------------------------------------
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this
-13-
<PAGE>
Security shall bear interest at the rate of _______% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue principal
shall be payable on demand. [Any such interest on any overdue principal that is
not so paid on demand shall bear interest at the rate of _______% per annum (to
the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such demand for payment to the date payment
of such interest has been made or duly provided for, and such interest shall
also be payable on demand.]]
Payment of the principal of (and premium, if any) and [if applicable,
-------------
insert -- any such] interest on this Security will be made at the office or
- ------
agency of the Company maintained for that purpose in __________, 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 [if applicable, insert -- ;
---------------------
provided, however, that at the option of the Company payment of interest may be
- -------- -------
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer to an account
maintained by the Person entitled thereto as specified in the Security Register,
provided that such Person shall have given the Trustee written wire instructions
- --------
at least five Business Days prior to the applicable Interest Payment Date.]
[If the Security is payable in a foreign currency, insert -- the
---------------------------------------------------------------
appropriate provision.]
- ----------------------
Reference is hereby made to the further provisions of this Security
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, this Security
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 under its corporate seal.
BROOKDALE LIVING COMMUNITIES, INC.
By _________________________________
Title:
Attest:
_________________________
Title:
-14-
<PAGE>
Section 203. Form of Reverse of Security.
---------------------------
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ________________, 199_ (herein called the
"Indenture"), between the Company and State Street Bank and Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof[, limited in aggregate principal amount to
$..........].
[If applicable, insert -- The Securities of this series are subject to
---------------------
redemption upon not less than 30 nor more than 60 days' notice by mail, such 30
or 60 days, as the case may be, to be counted from the date notice is mailed,
[if applicable, insert --(1) on _________ in any year commencing
---------------------
_____ and ending with the year _____ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after ___________________, 199_], as a whole or in part,
at the election of the Company, [at Redemption Prices determined as follows:]
[at the following Redemption Prices (expressed as percentages of the principal
amount)]: If redeemed [on or before __________________, _______%, and if
redeemed] during the 12-month period beginning ____________________ of the years
indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to _______% of the principal amount,]
together in the case of any such redemption [if applicable, insert -- (whether
---------------------
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Regular Record Dates or Special Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[If applicable insert -- The Securities of this series are subject to
--------------------
redemption upon not less than 30 nor more than 60 days' notice by mail, such 30
or 60 days, as the case may be, to be counted from the date notice is mailed,
(1) on ___________ in any year commencing with the year _______ and ending with
the year through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after
-15-
<PAGE>
___________], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning __________________ of
the years indicated,
<TABLE>
<CAPTION>
Redemption Price Redemption Price for
For Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
- ---- ------------------- -------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ________% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Regular Record Dates or Special Record Dates referred to on the face hereof, all
as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
_______________, redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than _______% per annum.]
[The sinking fund for this series provides for the redemption on
__________________ in each year beginning with the year ________ and ending with
the year ________ of [not less than $________________ ("mandatory sinking fund")
and not more than] $_______________ aggregate principal amount of Securities of
this series. Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the inverse order in which they become due].]
[If the Securities do not have a sinking fund, then insert -- the
----------------------------------------------------------
Securities do not have the benefit of any sinking fund obligations.]
[If the Security is subject to redemption, insert -- In the event of
------------------------------------------------
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[If the Security is not subject to redemption, insert -- The
----------------------------------------------------
Securities of this series are not redeemable prior to Stated Maturity.]
-16-
<PAGE>
[If applicable, insert -- The Indenture contains provisions for
---------------------
defeasance at any time of [the entire indebtedness of this Security] [and/or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is not an Original Issue Discount Security, insert --
------------------------------------------------------------------
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
--------------------------------------------------------------
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
----------------------------------
amount. Upon payment (i) of the amount of principal so declared due and payable
- ------
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
[If the Security is an Indexed Security, insert -- the appropriate
----------------------------------------------
provision.]
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 Securities of each series to be
adversely 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
Securities at the time Outstanding of each series to be adversely affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, 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 Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security 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
Security.
No reference herein to the Indenture and no provision of this Security
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 premium and
interest on this Security 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 Security is registrable in the Security
Register, upon surrender of this Security 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 Security are payable, duly endorsed by, or
accompanied by a
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written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $______ [and any integral multiple thereof].
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different 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.
No recourse shall be had for the payment of the principal of (or
premium, if any) or the interest on this Security, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer, director or employee, as such, past, present or future, of
the Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes (subject to Section 307 of the Indenture), whether or
not this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws principles thereof.
Section 204. Additional Provisions Required in Book-Entry Security.
-----------------------------------------------------
Any Book-Entry Security issued hereunder shall, in addition to the
provisions contained in Sections 202 and 203 and in addition to any legend
required by the Depositary, bear a legend in substantially the following form:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary.
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This Security is exchangeable for Securities registered in the name of a Person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture and may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary."
Section 205. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: _______________
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By_____________________________
Authorized Officer
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the
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series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(4) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(5) the date or dates on which the principal of and premium, if any,
on the Securities of the series is payable or the method of determination
thereof;
(6) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method of calculating such rate or rates of
interest, the date or dates from which such interest shall accrue or the method
by which such date or dates shall be determined, the Interest Payment Dates on
which any such interest shall be payable and the Regular Record Date for any
interest payable on any Interest Payment Date;
(7) the rights, if any, to defer payments of interest on any
Securities of the series by extending the interest payment period, and the
duration of such extensions;
(8) if other than the Corporate Trust Office of the Trustee, the
place or places where the principal of and any premium and interest on
Securities of the series shall be payable;
(9) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the series
shall be payable if other than the currency of the United States of America and
the manner of determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of "Outstanding" in Section
101;
(10) the period or periods within which, the price or prices at which,
the currency or currencies (including currency units) in which and the other
terms and conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company;
(11) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or those in
which the Securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and interest
on Securities of such series as to which such election is made shall be payable,
and the periods within which and the other terms and conditions upon which such
election is to be made;
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(12) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the method by which such portion shall be determined;
(13) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods (or the methods of
determination of such a period or periods) within which, the price or prices at
which and the other terms and conditions upon which Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(14) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference to an
index, formula or other method, the index, formula or other method by which such
amounts shall be determined;
(15) if the amount Outstanding of an Indexed Security for purposes of
the definition of "Outstanding" is to be other than the principal face amount at
original issuance, the method of determination of such amount;
(16) if either or both of Section 1302 or 1303 does not apply to the
Securities of any series;
(17) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Book-Entry Securities and, in such case, the
Depositary with respect to such Book-Entry Security or Securities and the
circumstances under which any Book-Entry Security may be registered for transfer
or exchange, or authenticated and delivered, in the name of a Person other than
such Depositary or its nominee, if other than as set forth in Section 305;
(18) any additional, modified or different covenants or Events of
Default applicable to one or more particular series of Securities; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuances of additional Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an
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Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth, or providing the manner
for determining, the terms of the series.
Section 302. Denominations.
-------------
The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as contemplated
by Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, its Chief
Financial Officer or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver or
make available for delivery such Securities; provided, however, that in the case
-------- -------
of Securities of a series that are not to be originally issued at one time, the
Trustee shall authenticate and deliver or make available for delivery such
Securities from time to time in accordance with such other procedures
(including, without limitation, the receipt by the Trustee of oral or electronic
instructions from the Company or its duly authorized agents, promptly confirmed
in writing) acceptable to the Trustee as may be specified by or pursuant to a
Company Order delivered to the Trustee prior to the time of the first
authentication of Securities of such series. If the form or forms or terms of
the Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(a) if the form or forms of such Securities have been established
by or pursuant to Board Resolution as permitted by Section 201, that such form
or forms have been established in conformity with the provisions of this
Indenture;
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(b) if the terms of such Securities have been, or in the case of
Securities of a series that are not to be originally issued at one time, will be
established by or pursuant to Board Resolution as permitted by Section 301, that
such terms have been, or in the case of Securities of a series that are not to
be originally issued at one time, will be established in conformity with the
provisions of this Indenture, subject, in the case of Securities of a series
that are not to be originally issued at one time, to any conditions specified in
such Opinion of Counsel; and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; provided, that such Opinion of Counsel need
--------
express no opinion as to whether a court in the United States would render a
money judgment in currency other than that of the United States.
If such form or forms or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which the Trustee determines would expose it to personal liability.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents, with
appropriate modifications to cover such future issuances, are delivered at or
prior to the authentication upon original issuance of the first Security of such
series to be issued.
If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Book-Entry Securities, then the Company shall execute and the Trustee
shall, in accordance with this Section and the Company Order with respect to
such series, authenticate and deliver or make available for delivery one or more
Securities in such form that (i) shall represent and shall be denominated in an
amount equal to the aggregate principal amount of the Outstanding Securities of
such series to be represented by such Book-Entry Security or Securities, (ii)
shall be registered in the name of the Depositary for such Book-Entry Security
or Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear the legend set forth in Section 204.
Unless otherwise established pursuant to Section 301, each Depositary
designated pursuant to Section 301 for a Book-Entry Security must, at the time
of its designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange
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<PAGE>
Act of 1934 and any other applicable statute or regulation. The Trustee shall
have no responsibility to determine if the Depositary is so registered. Each
Depositary shall enter into an agreement with the Trustee governing the
respective duties and rights of such Depositary and the Trustee with regard to
Book-Entry Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer thereof,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series,
the Company may execute, and upon Company Order the Trustee shall authenticate
and deliver or make available for delivery, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall execute and
the Trustee shall authenticate and deliver or make available for delivery in
exchange therefor one or more definitive Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor.
Until so exchanged the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
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The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Notwithstanding anything herein to the contrary, there shall be only
one Security Register with respect to each series of Securities.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver or make available for delivery, in the name of the designated transferee
or transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver or make available for delivery, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Security Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Security Registrar and the
Trustee duly executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
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transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing, any Book-Entry Security shall be
exchangeable pursuant to this Section 305 for Securities registered in the names
of Persons other than the Depositary for such Security or its nominee only if
(i) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Book-Entry Security or if at any time such
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended and the Company does not appoint a successor
Depositary within 90 days after receipt by it of such notice or after it becomes
aware of such cessation, (ii) the Company executes and delivers to the Trustee a
Company Order that such Book-Entry Security shall be so exchangeable or (iii)
there shall have occurred and be continuing an Event of Default with respect to
the Securities. Any Book-Entry Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Securities registered in such names
as such Depositary shall direct.
Notwithstanding any other provision in this Indenture, unless and
until it is exchanged in whole or in part for Securities that are not in the
form of a Book-Entry Security, a Book-Entry Security may not be transferred or
exchanged except as a whole by the Depositary with respect to such Book-Entry
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Book-Entry Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver or make
available for delivery in exchange therefor a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest at the office or agency maintained for such purpose pursuant
to Section 1002; provided, however, that at the option of the Company, interest
-------- -------
on Securities of any series that bear interest may be paid (i) by check mailed
to the address of the Person entitled thereto as it shall appear on the Security
Register or (ii) by wire transfer to an account maintained by the Person
entitled thereto as specified in the Security Register; provided, that such
--------
Person shall have given the Trustee written wire instructions at least five
Business Days prior to the applicable Interest Payment Date.
Any interest on any Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Security of such
series and
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the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such series at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation.
------------
All Securities surrendered for payment, redemption, registration
of transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Securities so delivered and any Securities
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surrendered directly to the Trustee for any such purpose shall be promptly
canceled by the Trustee and such cancellation shall be noted conspicuously on
each such Security. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of as directed by a Company Order or after 90 days, if
not in receipt of such Company Order, shall be disposed of in accordance with
the Trustee's customary procedures.
Section 310. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided, that any such
--------
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such CUSIP numbers. The Company will promptly
notify the Trustee of any change in the CUSIP numbers.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities of any series (except as to any surviving
rights of registration of transfer, exchange or replacement of such Securities
herein expressly provided for), and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to such Securities, when
(1) either
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(A) all such Securities theretofore authenticated and
delivered (other than (i) such Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306 and (ii)
such Securities for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will become
due and payable at their Stated Maturity within one year, or (iii) 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, in the case of (B)(i), (ii) or
(iii) above, has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount in the currency or currencies or
currency unit or units in which such Securities are payable sufficient to pay
and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture with respect to such Securities have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607 and to any
Authenticating Agent under Section 615 and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the
obligations of the Trustee under Section 402, Article Six and the last paragraph
of Section 1003 shall survive.
Section 402. Application of Trust Money.
--------------------------
Subject to provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
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ARTICLE FIVE
Remedies
Section 501. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, unless it is inapplicable to a particular
series or is specifically deleted or modified in the Board Resolution (or action
taken pursuant thereto), Officers' Certificate or supplemental indenture under
which such series of Securities is issued or has been modified in an indenture
supplemental hereto):
(1) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and
as due by the terms of a Security of that series, and continuance of such
default for a period of 30 days; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to Securities of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 90 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 principal amount
of the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or
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(6) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(7) any other Event of Default provided with respect to
Securities of that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default described
in clause 5 or 6 of Section 501) with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal amount of such Securities as may be
specified in the terms thereof) of all of the Securities of that series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or, in the case of Original Issue Discount Securities or Indexed
Securities, such specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay (A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series
which have become due otherwise than by such declaration of acceleration and any
interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and (D)
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; and
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(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
If an Event of Default described in clause 5 or 6 of Section 501
occurs, the Outstanding Securities shall ipso facto become immediately due and
payable without need of any declaration or other act on the part of the Trustee
or any Holder.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver,
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assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments directly to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
--------
however, that the Trustee may, on behalf of the Holders, vote for the election
- -------
of a trustee in bankruptcy or similar official and may be a member of a
creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or any
premium or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and any premium and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
Section 507. Limitation on Suits.
-------------------
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No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee before or during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
----------------------------------------------------------------
Interest.
- --------
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
any interest on such Security on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all
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rights and remedies of the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306 and as otherwise provided in Section 507, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 512. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
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Section 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest
on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs,
including counsel fees and expenses, against any such party litigant, in the
manner and to the extent provided in the Trust Indenture Act; provided, that
--------
neither this Section nor the Trust Indenture Act shall be deemed to authorize
any court to require such an undertaking or to make such an assessment in any
suit instituted by the Company, the Trustee or the Holders of 10% in aggregate
principal amount of the Outstanding Securities of any series.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
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Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 602. Notice of Defaults.
------------------
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall, within 90 days, give the Holders of Securities of
such series notice of such default as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
-------- -------
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document (whether in its
original or facsimile form) believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
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(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities and Serve as Trustee Under Other Indentures.
---------------------------------------------------------------
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Subject to the provisions of Section 608, the Trustee may become
and act as trustee under other indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding in the same manner as if it were not Trustee.
Section 606. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
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<PAGE>
Section 607. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as shall be agreed in writing between the Company and the Trustee
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, willful misconduct or bad
faith; and
(3) to indemnify each of the Trustee, or any predecessor Trustee,
for, and to hold it harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities upon all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
Without limiting any rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(6) or Section
501(7), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the satisfaction and
discharge of this Indenture and the resignation or removal of the Trustee.
Section 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
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Section 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of any federal or state supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee being removed may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public
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officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by or
pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such
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retiring Trustee shall, upon payment of its ch arges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates; provided, however, that to the extent that such
-------- -------
property and money is not held by the Trustee in trust for the benefit of the
Holders of particular Securities, such retiring Trustee shall transfer and
deliver to such successor Trustee such property and money upon payment of its
charges hereunder.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) and (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
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Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
- --------
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
Section 614. Investment of Certain Payments Held by the Trustee.
--------------------------------------------------
Any amounts held by the Trustee hereunder, other than pursuant to
Article Thirteen hereof, shall be invested by the Trustee from e to time at the
direction of the Company in such investments as may be specified by the
Company and reasonably agreed to by the Trustee from time to time; provided,
--------
that in investing trust funds pursuant to the terms of this Section and
liquidating any investments held in trust hereunder, the Trustee may, to the
extent permitted by law, purchase securities (including for the purposes of this
paragraph securities as to which the Trustee or a Trustee Affiliate (as defined
below) is the issuer or guarantor) from, and sell securities to, itself or any
Trustee Affiliate and purchase securities underwritten by, or in which a market
is made by, the Trustee or a Trustee Affiliate. For the purposes hereof, a
"Trustee Affiliate" shall mean an entity that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Trustee. Any income or gain realized as a result of any such
investment shall be promptly distributed (in no event later than the next
Business Day) to the Company after any intended amounts have been paid to the
Holders entitled thereto, except after the occurrence and during the continuance
of an Event of Default. The Trustee shall have no liability to the Company for
any loss resulting from any investment made in accordance with this Section, and
shall bear no expense in connection with any investment pursuant to this
Section. Any such investment may be sold (without regard to maturity date) by
the Trustee whenever necessary to make any distribution required by this
Indenture. Nothing herein shall require the Trustee to invest funds held by it
pursuant to the last paragraph of Section 1003.
Section 615. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate
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Securities of such series issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
--------
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
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If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:________________
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By_________________________________
As Authenticating Agent
By_________________________________
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee (a)
semi-annually, not later than ________ and _________ in each year, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders as of the preceding _______ or _________, as the case may be, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list in similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
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(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 703. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each May 15 following the date of the first issuance of
Securities hereunder deliver to Holders a brief report, dated as of such May 15,
which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
promptly will notify the Trustee when any Securities are listed on any stock
exchange or delisted therefrom.
Section 704. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided, that any such
--------
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
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Section 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety shall be a
corporation, partnership or trust organized and validly existing under the laws
of the United States of America, any State thereof or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest on all
the Securities and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
This Section shall not apply to any merger or consolidation in which
the Company is the surviving corporation.
Section 802. Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
Section 803. Officers' Certificate and Opinion of Counsel.
--------------------------------------------
The Trustee, subject to the provisions of Sections 601 and 603, shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, conveyance, transfer or lease, and
any such assumption, complies with the provisions of this Article before the
Trustee shall execute any supplemental indenture required pursuant to this
Article.
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ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to all or any
series of Securities; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal, and
with or without interest coupons, or to permit or facilitate the issuance of
Securities in uncertificated form or in the form of Book- Entry Securities; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any such
--------
addition, change or elimination (i) shall neither (A) apply to any Security of
any series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Security with respect to such provision or (ii) shall become
effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration
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of the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
(9) if allowed, without penalty under applicable laws and regulations,
to permit payment in the United States (including any of the States thereof and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction of principal, premium, if any, or interest, if any,
on Securities in bearer form or coupons, if any; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein or
to make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this clause (10) other
--------
than with respect to a defective provision, shall not adversely affect the
interests of the Holders of Securities of any series in any material respect.
Section 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series adversely affected
by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
--------
however, that no such supplemental indenture shall, without the consent of the
- -------
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change any
Place of Payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or adversely
affect the right of the Holder of any Security to require the Company to
repurchase such Securities, or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1009, except to increase any percentage set forth in such Sections or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each
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Outstanding Security affected thereby; provided, however, that this clause shall
-------- -------
not be deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section and
Section 1009, or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to
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conform, in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of the series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Trustee is hereby initially appointed Paying Agent, and the
Corporate Trust Office of the Trustee is initially designated as the office or
agency for the foregoing purposes. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the
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Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on any Securities of that series, deposit with
a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the
Securities of that series; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or received
by the Trustee in respect of obligations deposited with the Trustee pursuant to
Article Thirteen, or then held by the Company, in trust for the payment of the
principal of (and premium, if any) or interest on any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request (unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law), or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for
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payment thereof (unless the Company has remitted required moneys or property to
the appropriate governmental authority under any applicable escheat or abandoned
or unclaimed property laws, or has otherwise been discharged under such laws or
laws of similar applicability, in which case such Holder shall look solely to
its remedies (if any) under such laws and not to the Company), and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof shall thereupon cease; provided,
--------
however, that the Trustee or such Paying Agent, before being required to make
- -------
any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in the City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 1004. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or any Operating Property of the Company
or any Restricted Subsidiary, and (2) all lawful claims for labor materials and
supplies which, if unpaid, might by law become a lien upon any Operating
Property of the Company or any Restricted Subsidiary; provided, however, that
-------- -------
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (a) whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings or (b) which is not of material importance to the business,
operations, financial condition or results of operations of the Company and its
Restricted Subsidiaries taken as a whole.
Section 1005. Maintenance of Operating Properties.
-----------------------------------
The Company will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements to the Operating Properties, as in
the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company or any
- -------- -------
Restricted Subsidiary from discontinuing the operation and maintenance of any of
such Operating Properties or from omitting to make any repairs, renewals,
replacements, betterments or improvements thereof if such discontinuance or
omission is in the judgement of the Company, desirable in the conduct of the
business of the Company and its Restricted Subsidiaries taken as a whole.
Section 1006. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
-------- -------
that the Company shall not be required to preserve any such right or
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franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 1007. Limitation upon Liens.
---------------------
The Company will not itself, and will not permit any Restricted
Subsidiary to, create, incur, issue, assume, guarantee or secure any notes,
bonds, debentures or other similar evidences of indebtedness for money borrowed
(notes, bonds, debentures or other similar evidences of indebtedness for money
borrowed being hereinafter in this Section and Section 1008 called "Debt"),
secured by any pledge of, or mortgage, lien, encumbrance or security interest on
(such pledges, mortgages, liens, encumbrances and security interests being
hereinafter in this Section, in Section 801 and in Section 1008 collectively
called "Liens"), any Operating Property owned or leased by the Company or any
Restricted Subsidiary, or on any shares of stock or Debt of any Restricted
Subsidiary owned or held by the Company or any other Restricted Subsidiary,
without effectively providing that the Securities (together with, if the Company
shall so determine, any other Debt of the Company or such Restricted Subsidiary
then existing or thereafter created which is not subordinate to the Securities)
shall be secured equally and ratably with (or prior to) such secured Debt (for
the purpose of providing such equal and ratable security, the principal amount
of any Securities shall mean the aggregate principal amount of such Securities
which are Outstanding and shall not be less than that principal amount which
could be declared to be due and payable pursuant to Section 502 on the date of
the making of such effective provision, and the extent of such equal and ratable
security shall be adjusted, to the extent permitted by law, as and when said
principal amount changes over time pursuant to Section 502 and any other
provision hereof), so long as such secured Debt shall be so secured, unless,
after giving effect thereto, the aggregate principal amount of all such secured
Debt then outstanding plus Attributable Debt of the Company and its Restricted
Subsidiaries in respect of Sale and Leaseback Transactions entered into after
the date of this Indenture (other than Sale and Leaseback Transactions permitted
by Section 1008(b)) would not exceed an amount equal to 10% of Consolidated Net
Assets; provided, however, that nothing contained in this Section shall prevent,
-------- -------
restrict or apply to, and there shall be excluded from secured Debt in any
computation under this Section, Debt secured by:
(a) Liens on any property or assets of the Company or any Restricted
Subsidiary or on any shares of stock or Debt existing as of the date of
this Indenture;
(b) Liens on all property or assets of, or on any shares of stock or
Debt of, any corporation existing at the time such corporation becomes a
Restricted Subsidiary;
(c) Liens on any property or assets or shares of stock or Debt
existing at the time of acquisition thereof (including acquisition through
merger or consolidation) or securing the payment of all or any part of the
purchase price or construction cost thereof or securing any Debt incurred
prior to, at the time of or within 120 days after the acquisition of such
property or assets or shares of stock or Debt or the completion of any such
construction, whichever is later, for the purpose of financing all or any
part of the purchase price or construction cost
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thereof (provided such Liens are limited to such shares of stock or Debt,
--------
property or assets, improvements thereon and the land upon which such
property, assets and improvements are located and any other property or
assets not then constituting an Operating Property);
(d) Liens on any property or assets to secure all or any, part of the
cost of development, operation, construction, alteration, repair or
improvement of all or any part of such property, or assets, or to secure
Debt incurred prior to, at the time of or within 120 days after the
completion of such development, operation, construction, alteration, repair
or improvement, whichever is later, for the purpose of financing all or any
part of such cost (provided such Liens are limited to such property or
--------
assets, improvements thereon and the land upon which such property, assets
and improvements are located and any other property or assets not then
constituting an Operating Property);
(e) Liens which secure Debt owing to the Company or another Restricted
Subsidiary by a Restricted Subsidiary;
(f) (i) Liens arising from the assignment of moneys due and to become
due under contracts between the Company or any Restricted Subsidiary and
the United States of America, any State, Territory, or possession thereof
or any agency, department, instrumentality or political subdivision of any,
thereof, (ii) Liens in favor of the United States of America, any State,
Commonwealth, Territory or possession thereof or any agency, department,
instrumentality or political subdivision of any thereof, pursuant to the
provisions of any contract not directly or indirectly in connection with
securing Debt or (iii) Liens arising in connection with obligations issued
by a State, Commonwealth, Territory or possession of the United States of
America, or any political subdivision or governmental authority of any of
the foregoing, or the District of Columbia;
(g) any deposit or pledge as security for the performance of any bid,
tender, contract, lease or undertaking not directly or indirectly in
connection with the securing of Debt; any deposit or pledge with any
governmental agency required or permitted to qualify the Company or any
Restricted Subsidiary to conduct business, to maintain self-insurance or to
obtain the benefits of any law pertaining to workmen's compensation,
unemployment insurance, old age pensions, social security or similar
matters, or to obtain any stay or discharge in any legal or administrative
proceedings; deposits or pledges to obtain the release of mechanics',
workmen's, repairmen's, materialmen's or warehousemen's liens or the
release of property in the possession of a common carrier; any security
interest created in connection with the sale, discount or guarantee of
notes, chattel mortgages, leases, accounts receivable, trade acceptances or
other paper, or contingent repurchase obligations, arising out of sales of
merchandise in the ordinary course of business; liens permitted by Section
1004; or other deposits or pledges similar to those referred to in this
subdivision (g);
(h) Liens arising by reason of any judgment, decree or order of any
court or other governmental authority, so long as any appropriate legal
proceedings which may have been
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initiated for the review of such judgment, decree or order shall not have
been finally terminated or so long as the period within which such
proceedings may be initiated shall not have expired; and
(i) any extension, renewal, substitution or replacement (or successive
extensions, renewals, substitutions or replacements), as a whole or in
part, of any of the Liens referred to in subdivisions (a) through (h) above
or the Debt secured thereby; provided that (1) such extension, renewal,
--------
substitution or replacement Lien shall be limited to all or any part of the
same property or assets, shares of stock or Debt that secured the Lien
extended, renewed, substituted or replaced (plus improvements on such
property and any other property or assets not then constituting an
Operating Property) and (2) in the case of subdivisions (a) through (c)
above, the Debt secured by such Lien at such time is not increased.
Debt created by the Company or any Restricted Subsidiary shall not be
cumulated with a guarantee of the same Debt by the Company, or any other
Restricted Subsidiary for the same financial obligation.
SECTION 1008. Limitation upon Sales and Leasebacks.
------------------------------------
The Company will not itself, and will not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction after the date of
this Indenture, unless either:
(a) the Attributable Debt of the Company and its Restricted
Subsidiaries in respect of such Sale and Leaseback Transaction and all
other Sale and Leaseback Transactions entered into after the date of this
Indenture (other than Sale and Leaseback Transactions permitted by Section
1008(b)), plus the aggregate principal amount of Debt secured by Liens on
Operating Properties then outstanding (excluding any such Debt secured by
Liens covered in subdivisions (a) through (i) of the first paragraph of
Section 1007) without equally and ratably securing the Securities, would
not exceed 10% of Consolidated Net Assets, or
(b) the Company applies, within 120 days after the sale or transfer,
an amount equal to the fair market value of the Operating Property so sold
and leased back at the time of entering into such Sale and Leaseback
Transaction (as determined by any two of the following: the Chairman or
Vice Chairman of the Board, the President, any Vice Chairman, any Vice
President, the Treasurer and the Controller of the Company) to (i) the
purchase of any asset or any interest in an asset which would qualify,
after purchase, as an Operating Property or (ii) the retirement of Funded
Debt (including Securities of any series constituting Funded Debt) of the
Company (and any redemption of Securities of any series pursuant to this
provision shall, if provided in the terms of such particular series of
Securities, not be prohibited pursuant to any redemption provision of such
series otherwise prohibiting redemption when such would constitute a
refunding operation or anticipated refunding
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operation or similar refunding operation); provided, that the amount to be
--------
applied to the retirement of Funded Debt of the Company shall be reduced by
(i) the principal amount of Securities delivered within 120 days after such
sale or transfer to the Trustee for redemption and cancellation, and (ii)
the principal amount of Funded Debt, other than Securities, voluntarily
retired by the Company within 120 days after such sale. For purposes of
clauses (i) and (ii) of the foregoing proviso, the principal amount of any
Securities shall mean the aggregate principal amount of such Securities
which are Outstanding and shall not be less than that principal amount
which could be declared to be due and payable pursuant to Section 502 at
the time of determination. Notwithstanding the foregoing, no retirement
referred to in this subdivision (b) may be effected by payment at maturity
or pursuant to any mandatory sinking fund payment or any mandatory
prepayment provision.
Notwithstanding the foregoing, where the Company or any Restricted
Subsidiary is the lessee in any Sale and Leaseback Transaction, Attributable
Debt shall not include any Debt resulting from the guarantee by the Company or
any other Restricted Subsidiary of the lessee's obligation thereunder.
SECTION 1009. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1004 to 1008, inclusive, with
respect to the Securities of any series if before or after the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive compliance with any
covenant or condition hereunder. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to waive any such compliance, whether or not such Holders remain
Holders after such record date.
SECTION 1010. Compliance Certificate.
----------------------
The Company will furnish to the Trustee on or before May 1 in each
year (beginning the first May 1 after the date of original issuance of
Securities hereunder) a brief certificate (which need not comply with Section
102) from the principal executive, financial or accounting officer of the
Company stating that in the course of the performance by the signer of his or
her duties as an officer of the Company he or she would normally have knowledge
of any default or non-compliance by the Company in the performance of any
covenants or conditions contained in this Indenture, stating whether or not he
or she has knowledge of any such default or non-compliance and, if so,
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specifying each such default or non-compliance of which the signer has knowledge
and the nature thereof. For purposes of this Section 1010, non-compliance or
default shall be determined without regard to any grace period or requirement of
notice provided pursuant to the terms of the Indenture.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
------------------------
Securities of any series which are redeemable in whole or in part
before their Stated Maturity shall be redeemable in accordance with their terms
and (except as otherwise specified as contemplated by Section 301 for Securities
of any series) in accordance with this Article.
Section 1102. Election to Redeem: Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution or Officers' Certificate. In
case of any redemption at the election of the Company of the Securities of any
series, the Company shall, at least 60 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities (a)
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities or elsewhere in this Indenture or (b) pursuant to an
election of the Company which is subject to a condition specified in the terms
of such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
- --------
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all of the Securities
of such series and of a specified tenor are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption
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Date by the Trustee, from the Outstanding Securities of such series and
specified tenor not previously called for redemption in accordance with the
preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP numbers) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) in the case of partial redemption of any Securities, the principal
amounts of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security, or portion thereof, to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
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(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
Section 1105. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in the currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.
Section 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
-------- -------
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1107. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver or make available for delivery to the Holder of
such Security without service charge, a new Security or Securities of the same
series and of like tenor, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and
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in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Book-Entry Security is so surrendered, such new Security so
issued shall be a new Book-Entry Security.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited.
--------
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and stating the basis for such credit and that such
Securities have not been previously so credited
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and will also deliver to the Trustee any Securities to be so delivered. Not
less than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 1103 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner provided
in Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article: Company's Option to Effect Defeasance
---------------------------------------------------------------
or Covenant Defeasance.
----------------------
Unless, pursuant to Section 301, provision is made that either or
both of (a) defeasance of the Securities of a series under Section 1302 or (b)
covenant defeasance of the Securities of a series under Section 1303 shall not
apply to the Securities of a series, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
Thirteen, with such modifications thereto as may be specified pursuant to
Section 301 with respect to any Securities, shall be applicable to the
Securities of such series, and the Company may at its option by Board
Resolution, at any time, with respect to the Securities of such series, elect to
have either Section 1302 (if applicable) or Section 1303 (if applicable) applied
to the Outstanding Securities of such series upon compliance with the conditions
set forth below in this Article Thirteen.
Section 1302. Defeasance and Discharge.
------------------------
Upon the Company's exercise of its option to have this Section
applied to any series of Securities, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities of
such series on and after the date the conditions precedent set forth below are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series which
shall thereafter be deemed to be "Outstanding" only for the purposes of the
Sections of this Indenture referred to in clauses (A) and (B) of this Section,
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of Outstanding Securities of
such series to receive, solely from the trust fund described in Section 1304 as
more fully set forth in such Section, payments of the principal of (and premium,
if any) and interest on such Securities when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 305, 306,
1002 and 1003 and such obligations as shall be ancillary thereto, (C) the
rights, powers, trusts, duties, immunities and other provisions in respect of
the Trustee hereunder and (D) this Article Thirteen. Subject to compliance with
this Article Thirteen, the Company may exercise its
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option under this Section 1302 notwithstanding the prior exercise of its option
under Section 1303 with respect to the Securities of such series. Following a
defeasance, payment of such Securities may not be accelerated because of an
Event of Default.
Section 1303. Covenant Defeasance.
-------------------
Upon the Company's exercise of its option (if any) to have this
Section applied to any Series of Securities, the Company shall be released from
its obligations under Sections 801, 1007 and 1008 (and any covenant made
applicable to such Securities pursuant to Section 301) and the occurrence of an
event specified in Section 501(4) (with respect to any of Sections 801, 1007 or
1008 or any such covenant) (and any other Event of Default applicable to such
Securities that are determined pursuant to Section 301 to be subject to this
provision) shall not be deemed to be an Event of Default with respect to the
Outstanding Securities of such series on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"), and such
Securities shall thereafter be deemed not to be "Outstanding" for the purposes
of any direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Sections 801, 1007 or 1008 (and
any other covenant made applicable to such Security pursuant to Section 301) and
any such Events of Default, but shall continue to be deemed "Outstanding" for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to the Outstanding Securities of such series, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of any reference in any
such Section or such other covenant to any other provision herein or in any
other document, but the remainder of this Indenture and such Securities shall be
unaffected thereby. Notwithstanding the defeasance by the Company of its
obligations under Section 801, any successor shall be required to assume the
Company's obligations under Section 607 as a condition to such succession.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions precedent to application of
either Section 1302 or Section 1303 to the Outstanding Securities of or within
such series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 609 who shall agree to comply with the provisions of this Article
Thirteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (A) money in an amount (in
such currency, currencies or currency units in which such Securities are then
specified as payable at Maturity), or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment, money in an amount, or (C) a combination thereof in an
amount, sufficient, without reinvestment, in the opinion of a nationally
recognized firm of independent public accountants
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expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, (i) the principal of (and premium, if any) and
interest on the Outstanding Securities of such series on the Maturity of such
principal, premium, if any, or interest and (ii) any mandatory sinking fund
payments applicable to such Securities on the day on which such payments are due
and payable in accordance with the terms of this Indenture and such Securities.
Before such a deposit the Company may make arrangements satisfactory to the
Trustee for the redemption of Securities at a future date or dates in accordance
with Article Eleven, which shall be given effect in applying the foregoing. For
this purpose, "U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations 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, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account of
the holder of such depositary receipt, provided that (except as required by law)
--------
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depositary receipt.
(2) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing (A) on the date of such deposit or
(B) insofar as subsections 501(5) and (6) are concerned, at any time during the
period ending on the 91st day after the date of such deposit or, if longer,
ending on the day following the expiration of the longest preference period
applicable to the Company in respect of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period).
(3) Such defeasance or covenant defeasance shall not (A) cause the
Trustee for the Securities of such series to have a conflicting interest as
defined in Section 608 or for purposes of the Trust Indenture Act with respect
to any Securities of the Company or (B) result in the trust arising from such
deposit to constitute, unless it is qualified as, a regulated investment company
under the Investment Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(5) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the Company
has received from, or
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<PAGE>
there has been published by, the Internal Revenue Service a ruling, or (y) since
the date of this Indenture there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred.
(6) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section 301.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1302 or
the covenant defeasance under Section 1303 (as the case may be) have been
complied with.
Section 1305. Deposited Money and U.S. Government Obligations to be Held in
-------------------------------------------------------------
Trust: Other Miscellaneous Provisions.
-------------------------------------
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (collectively, for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of the Outstanding Securities of such series shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent (but
not including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304
which in the opinion of a nationally recognized firm of
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<PAGE>
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
Section 1306. Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment or any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Thirteen until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 1305; provided,
--------
however, that if the Company makes any payment of principal of (and premium, if
- -------
any) or interest on any such Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
the Paying Agent.
Section 1307. Qualifying Trustee.
------------------
Any trustee appointed pursuant to Section 1304 for the purpose of
holding trust funds deposited pursuant to that Section shall be appointed under
an agreement in form acceptable to the Trustee and shall provide to the Trustee
a certificate of such trustee, upon which certificate the Trustee shall be
entitled to conclusively rely, that all conditions precedent provided for herein
to the related defeasance or covenant defeasance have been complied with. In no
event shall the Trustee be liable for any acts or omissions of said trustee.
ARTICLE FOURTEEN
Immunity of Incorporators, Stockholders, Officers, Directors and Employees
Section 1401. Exemption from Individual Liability.
-----------------------------------
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer,
director, or employee, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations
of the Company, and that no such personal liability whatever shall attach to, or
is or shall be incurred by, the incorporators, stockholders, officers,
directors, or employees, as such, of the Company or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or
-67-
<PAGE>
implied therefrom; and that any and all such personal liability, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer,
director, or employee, as such, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or implied
therefrom, are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of such
Securities.
*****
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-68-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By: _________________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By: _________________________________________
Name:
Title:
-69-
<PAGE>
STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
On ___________, 199__, before me, ____________, Notary Public,
personally appeared __________________, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity and that by his/her
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
_____________________________________
Notary Public
-70-
<PAGE>
STATE OF _____________)
) ss.:
COUNTY OF ____________)
On the _____ day of _________, 199__, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
he/she is _____________ of _______________________________, one of the companies
described in and which executed the foregoing instrument; that it was so affixed
by authority of the Board of Directors of said corporation, and that he/she
signed his/her name thereto by like authority of the Board of Directors of said
corporation.
_____________________________________
Notary Public
-71-
<PAGE>
EXHIBIT 4.3
================================================================================
BROOKDALE LIVING COMMUNITIES, INC.
TO
STATE STREET BANK AND TRUST COMPANY
as Trustee
__________
FORM OF INDENTURE
Dated as of ________, 199_
Providing for Issuance of Subordinated
Debt Securities in Series
================================================================================
<PAGE>
BROOKDALE LIVING COMMUNITIES, INC.
Certain Sections of this Indenture relating to Sections 310 through
318, inclusive, of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
(S) 310(a)(1) ................................................................................. 609
(a)(2) ................................................................................. 609
(a)(3) ................................................................................. Not Applicable
(a)(4) ................................................................................. Not Applicable
(b) ................................................................................. 608, 610
(S) 311(a) ................................................................................. 613
(b) ................................................................................. 613
(S) 312(a) ................................................................................. 701
702(a)
(b) ................................................................................. 702(b)
(c) ................................................................................. 702(c)
(S) 313(a) ................................................................................. 703(a)
(b) ................................................................................. 703(a)
(c) ................................................................................. 703(a)
(d) ................................................................................. 703(b)
(S) 314(a) ................................................................................. 704
(a)(4) ................................................................................. 101, 704
(b) ................................................................................. Not Applicable
(c)(1) ................................................................................. 102
(c)(2) ................................................................................. 102
(c)(3) ................................................................................. Not Applicable
(d) ................................................................................. Not Applicable
(e) ................................................................................. 102
(S) 315(a) ................................................................................. 601
(b) ................................................................................. 602
(c) ................................................................................. 601
(d) ................................................................................. 601
(e) ................................................................................. 514
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
(S) 316(a) ................................................................................. 101
(a)(1)(A)............................................................................... 502, 512
(a)(1)(B)............................................................................... 513
(a)(2).................................................................................. Not Applicable
(b) ................................................................................. 508
(c) ................................................................................. 104(c)
(S) 317(a)(1) ................................................................................. 503
(a)(2) ................................................................................. 504
(b) ................................................................................. 1003
(S) 318(a) ................................................................................. 107
</TABLE>
_____________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE ONE
Definitions and Other Provisions of General Application........................................... 1
Section 101. Definitions.......................................................................... 1
Section 102. Compliance Certificates and Opinions................................................. 8
Section 103. Form of Documents Delivered to Trustee............................................... 9
Section 104. Acts of Holders; Record Dates........................................................ 9
Section 105. Notices, Etc., to Trustee and Company................................................ 10
Section 106. Notice to Holders; Waiver............................................................ 10
Section 107. Conflict with Trust Indenture Act.................................................... 11
Section 108. Effect of Headings and Table of Contents............................................. 11
Section 109. Successors and Assigns............................................................... 11
Section 110. Separability Clause.................................................................. 11
Section 111. Benefits of Indenture................................................................ 11
Section 112. Governing Law........................................................................ 12
Section 113. Legal Holidays....................................................................... 12
ARTICLE TWO
Security Forms.................................................................................... 12
Section 201. Forms Generally...................................................................... 12
Section 202. Form of Face of Security............................................................. 13
Section 203. Form of Reverse of Security.......................................................... 14
Section 204. Additional Provisions Required in Book-Entry Security................................ 19
Section 205. Form of Trustee's Certificate of Authentication...................................... 19
ARTICLE THREE
The Securities.................................................................................... 20
Section 301. Amount Unlimited; Issuable in Series................................................. 20
Section 302. Denominations........................................................................ 22
Section 303. Execution, Authentication, Delivery and Dating....................................... 23
Section 304. Temporary Securities................................................................. 25
Section 305. Registration, Registration of Transfer and Exchange.................................. 25
Section 306. Mutilated, Destroyed, Lost and Stolen Securities..................................... 27
Section 307. Payment of Interest; Interest Rights Preserved....................................... 28
Section 308. Persons Deemed Owners................................................................ 29
Section 309. Cancellation......................................................................... 29
Section 310. Computation of Interest.............................................................. 30
Section 311. CUSIP Numbers........................................................................ 30
</TABLE>
iii
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<TABLE>
<S> <C>
ARTICLE FOUR
Satisfaction and Discharge........................................................................ 30
Section 401. Satisfaction and Discharge of Indenture.............................................. 30
Section 402. Application of Trust Money........................................................... 31
ARTICLE FIVE
Remedies.......................................................................................... 31
Section 501. Events of Default.................................................................... 31
Section 502. Acceleration of Maturity; Rescission and Annulment................................... 33
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee...................... 34
Section 504. Trustee May File Proofs of Claim..................................................... 34
Section 505. Trustee May Enforce Claims Without Possession of Securities.......................... 35
Section 506. Application of Money Collected....................................................... 35
Section 507. Limitation on Suits.................................................................. 35
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest............ 36
Section 509. Restoration of Rights and Remedies................................................... 36
Section 510. Rights and Remedies Cumulative....................................................... 36
Section 511. Delay or Omission Not Waiver......................................................... 37
Section 512. Control by Holders................................................................... 37
Section 513. Waiver of Past Defaults.............................................................. 37
Section 514. Undertaking for Costs................................................................ 38
ARTICLE SIX
The Trustee....................................................................................... 38
Section 601. Certain Duties and Responsibilities.................................................. 38
Section 602. Notice of Defaults................................................................... 38
Section 603. Certain Rights of Trustee............................................................ 38
Section 604. Not Responsible for Recitals or Issuance of Securities............................... 39
Section 605. May Hold Securities and Serve as Trustee Under Other Indentures...................... 40
Section 606. Money Held in Trust.................................................................. 40
Section 607. Compensation and Reimbursement....................................................... 40
Section 608. Disqualification; Conflicting Interests.............................................. 41
Section 609. Corporate Trustee Required; Eligibility.............................................. 41
Section 610. Resignation and Removal; Appointment of Successor.................................... 41
Section 611. Acceptance of Appointment by Successor............................................... 43
Section 612. Merger, Conversion, Consolidation or Succession to Business.......................... 44
Section 613. Preferential Collection of Claims Against Company.................................... 44
Section 614. Investment of Certain Payments Held by the Trustee................................... 44
Section 615. Appointment of Authenticating Agent.................................................. 45
</TABLE>
iv
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<TABLE>
<S> <C>
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company................................................. 46
Section 701. Company to Furnish Trustee Names and Addresses of Holders............................ 46
Section 702. Preservation of Information; Communications to Holders............................... 47
Section 703. Reports by Trustee................................................................... 47
Section 704. Reports by Company................................................................... 47
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease.............................................. 48
Section 801. Company May Consolidate, Etc., Only on Certain Terms................................. 48
Section 802. Successor Substituted................................................................ 48
Section 803. Officers' Certificate and Opinion of Counsel......................................... 49
ARTICLE NINE
Supplemental Indentures........................................................................... 49
Section 901. Supplemental Indentures Without Consent of Holders................................... 49
Section 902. Supplemental Indentures with Consent of Holders...................................... 50
Section 903. Execution of Supplemental Indentures................................................. 51
Section 904. Effect of Supplemental Indentures.................................................... 51
Section 905. Conformity with Trust Indenture Act.................................................. 51
Section 906. Reference in Securities to Supplemental Indentures................................... 52
ARTICLE TEN
Covenants.......................................................................................... 52
Section 1001. Payment of Principal, Premium and Interest........................................... 52
Section 1002. Maintenance of Office or Agency...................................................... 52
Section 1003. Money for Securities Payments to Be Held in Trust.................................... 52
Section 1004. Payment of Taxes and Other Claims.................................................... 54
Section 1005. Maintenance of Operating Properties.................................................. 54
Section 1006. Corporate Existence.................................................................. 54
Section 1007. Waiver of Certain Covenants.......................................................... 55
Section 1008. Compliance Certificate............................................................... 55
ARTICLE ELEVEN
Redemption of Securities........................................................................... 55
Section 1101. Applicability of Article............................................................. 55
Section 1102. Election to Redeem: Notice to Trustee................................................ 56
Section 1103. Selection by Trustee of Securities to Be Redeemed.................................... 56
Section 1104. Notice of Redemption................................................................. 57
Section 1105. Deposit of Redemption Price.......................................................... 57
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
Section 1106. Securities Payable on Redemption Date................................................ 58
Section 1107. Securities Redeemed in Part.......................................................... 58
ARTICLE TWELVE
Sinking Funds...................................................................................... 58
Section 1201. Applicability of Article............................................................. 58
Section 1202. Satisfaction of Sinking Fund Payments with Securities................................ 59
Section 1203. Redemption of Securities for Sinking Fund............................................ 59
ARTICLE THIRTEEN
Subordination of Securities........................................................................ 59
Section 1301. Securities Subordinate to Senior Debt................................................ 59
Section 1302. Payment Over of Proceeds Upon Dissolution, Etc....................................... 60
Section 1303. No Payment When Senior Debt in Default............................................... 61
Section 1304. Payment Permitted If No Default...................................................... 61
Section 1305. Subrogation to Rights of Holders of Senior Debt...................................... 62
Section 1306. Provisions Solely to Define Relative Rights.......................................... 62
Section 1307. Trustee to Effectuate Subordination.................................................. 62
Section 1308. No Waiver of Subordination Provisions................................................ 62
Section 1309. Notice to Trustee.................................................................... 63
Section 1310. Reliance on Judicial Order or Certificate of Liquidating Agent....................... 63
Section 1311. Trustee Not Fiduciary for Holders of Senior Debt..................................... 64
Section 1312. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights......... 64
Section 1313. Article Applicable to Paying Agents.................................................. 64
Section 1314. Defeasance of this Article Thirteen.................................................. 64
ARTICLE FOURTEEN
Conversion of Securities........................................................................... 65
Section 1401. Applicability of Article............................................................. 65
Section 1402. Conversion Privilege and Conversion Price............................................ 65
Section 1403. Exercise of Conversion Privilege..................................................... 65
Section 1404. Fractions of Shares.................................................................. 66
Section 1405. Adjustment of Conversion Price....................................................... 66
Section 1406. Notice of Adjustments of Conversion Price............................................ 70
Section 1407. Notice of Certain Corporate Action................................................... 70
Section 1408. Company to Reserve Common Stock...................................................... 71
Section 1409. Taxes on Conversions................................................................. 71
Section 1410. Covenant as to Common Stock.......................................................... 72
</TABLE>
vi
<PAGE>
<TABLE>
<S> <C>
ARTICLE FIFTEEN
Defeasance and Covenant Defeasance..................................................................... 73
Section 1501. Applicability of Article; Company's Option to Effect Defeasance or Covenant Defeasance... 73
Section 1502. Defeasance and Discharge................................................................. 73
Section 1503. Covenant Defeasance...................................................................... 74
Section 1504. Conditions to Defeasance or Covenant Defeasance.......................................... 74
Section 1505. Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions................................................................. 76
Section 1506. Reinstatement............................................................................ 77
Section 1507. Qualifying Trustee....................................................................... 77
ARTICLE SIXTEEN
Immunity of Incorporators, Stockholders, Officers, Directors and Employees............................. 77
Section 1601. Exemption from Individual Liability...................................................... 77
</TABLE>
___________
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
vii
<PAGE>
INDENTURE, dated as of _________ __, 199 , between Brookdale Living
Communities, Inc., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company"), having its principal office
at 77 West Wacker Drive, Chicago, Illinois 60601, and State Street Bank and
Trust Company, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as provided in this
Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation in the United States of
America; and
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and
1
<PAGE>
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 615 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a Security in the form prescribed in
Section 204 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee, and registered in the name of such
Depositary or such nominee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Section 1411, shares issuable on conversion of Securities shall
include only shares of the class designated as Common Stock of the Company at
the date of this instrument or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable
2
<PAGE>
in the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Company and which are not subject to redemption by the Company;
provided that if at any time there shall be more than one such resulting class,
- --------
the shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Financial Officer, a Vice Chairman
of the Board, a Vice Chairman or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Controller, an Assistant Controller, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Assets" means the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom all current liabilities (excluding any indebtedness for money borrowed
having a maturity of less than 12 months from the date of the most recent
consolidated balance sheet of the Company but which by its terms is renewable or
extendable beyond 12 months from such date at the option of the borrower), all
as set forth on the most recent consolidated balance sheet of the Company and
computed in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of original execution of this Indenture
is located at ____________________, except that, with respect to presentation of
the Securities for payment or registration of transfers or exchanges and the
location of the register, such term means the office or agency of the Trustee at
which at any particular time its corporate agency business shall be conducted.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the Person designated as Depositary for such series by the Company
pursuant to Section 301, which Person shall be a clearing agency registered
under the Securities Exchange Act of 1934; and if at any time there is more than
one such Person, "Depositary" as used with respect to the Securities of any
series shall mean the Depositary with respect to the Securities of such series.
"Event of Default" has the meaning specified in Section 501.
"Expiration Time" has the meaning specified in Section 1405.
3
<PAGE>
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the forms and terms of
particular series of Securities established as contemplated by Section 301.
"Indexed Security" means any Security which provides that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Financial
Officer, a Vice Chairman of the Board, a Vice Chairman or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Controller, an Assistant
Controller, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Operating Property" means any real property or equipment located
within the United States and used primarily for providing senior independent and
assisted living services to the elderly by the Company or any of its
Subsidiaries that has a net book value (after deduction of accumulated
depreciation) in excess of 2.0% of Consolidated Net Assets, other than any such
real property or equipment (i) which is financed by obligations issued by a
State, Commonwealth, Territory or possession of the United States of America, or
any political subdivision or governmental authority of any of the foregoing, or
the District of Columbia or (ii) which, in the opinion of the Board of Directors
of the Company, is not of material importance to the total business conducted by
the Company and its Restricted Subsidiaries taken as a whole.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
4
<PAGE>
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities; provided, that if such Securities are to be redeemed, notice
--------
of such redemption has been duly given pursuant to Section 1104 of this
Indenture or provision therefor satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1502
and 1503, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Fifteen; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder, or whether sufficient funds are available for redemption or
for any other purpose, and for the purpose of making the calculations required
by Section 313 of the Trust Indenture Act, (i) the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable as of the date
of such determination upon acceleration of the Maturity thereof pursuant to
Section 502, (ii) the principal amount of a Security denominated in one or more
foreign currencies or currency units shall be the U.S. dollar equivalent,
determined in the manner provided as contemplated by Section 301 on the date of
original issuance of such Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the amount determined as provided in (i)
above) of such Security, (iii) the principal amount of any Indexed Security that
may be counted in making such determination or calculation and that shall be
deemed to be Outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise provided
with respect to such Security pursuant to Section 301, and (iv) except for the
purpose of making the calculations required by Section 313 of the Trust
Indenture Act, Securities owned by the
5
<PAGE>
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, waiver
or other action, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchased Shares" has the meaning specified in Section 1405.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means
any vice president, any assistant secretary, any assistant treasurer, any senior
trust officer, any trust officer or assistant trust officer, or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
6
<PAGE>
"Restricted Subsidiary" means any Subsidiary of the Company that owns
any Operating Property.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Payment" has the meaning specified in Section 1302.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Debt" means, without duplication, the principal, premium (if
any) and unpaid interest on all present and future (i) indebtedness of the
Company for borrowed money, (ii) obligations of the Company evidenced by bonds,
debentures, notes or similar instruments, (iii) indebtedness incurred, assumed
or guaranteed by the Company in connection with the acquisition by it or a
Subsidiary of any business, properties or assets (except purchase-money
indebtedness classified as accounts payable under generally accepted accounting
principles), (iv) obligations of the Company as lessee under leases required to
be capitalized on the balance sheet of the lessee under generally accepted
accounting principles, (v) reimbursement obligations of the Company in respect
of letters of credit relating to indebtedness or other obligations of the
Company that qualify as indebtedness or obligations of the kind referred to in
clauses (i) through (iv) above, and (vi) obligations of the Company under direct
or indirect guarantees in respect of, and obligations (contingent or otherwise)
to purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the kinds referred to in
clauses (i) through (v) above, in each case unless in the instrument creating or
evidencing the indebtedness or obligation or pursuant to which the same is
outstanding it is provided that such indebtedness or obligation is not superior
in right of payment to the Securities.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power for the
election of directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned by the Company, or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries.
7
<PAGE>
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
Subsidiary.
"U.S. Government Obligations" has the meaning specified in Section
1504.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
8
<PAGE>
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or representations
by counsel or an opinion of counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate, representations
or opinion with respect to the matters upon which such officer's certificate or
opinion is based are erroneous. Any such certificate or representations of
counsel or opinion of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders; Record Dates.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary
9
<PAGE>
public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged
to him the execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The Company may fix any day as the record date for the purpose of
determining the Holders of Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders of Securities of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series made by any Person
in respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
Section 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Global Trust
Services, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company, Attention: Treasurer.
10
<PAGE>
Section 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice mailed to a Holder in the
manner herein prescribed shall be conclusively deemed to have been received by
such Holder, whether or not such Holder actually receives such notice. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
11
<PAGE>
Section 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 112. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
Section 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date, the Redemption Date, or at the Stated Maturity or
Maturity; provided, that no interest shall accrue for the intervening period.
--------
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
---------------
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by, or by action taken pursuant to, a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner permitted by
the rules of any securities exchange
12
<PAGE>
on which the Securities may be listed, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities.
Section 202. Form of Face of Security.
------------------------
[insert any legend required by the Internal Revenue Code and the
---------------------------------------------------------------
regulations thereunder.]
- ----------------------
BROOKDALE LIVING COMMUNITIES, INC.
----------------------------------
No.____________ $______________
CUSIP No. ____________________________
Brookdale Living Communities, Inc., a corporation duly organized and
existing under the laws 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 ______________________________, or
registered assigns, the principal sum of _______________________ Dollars on
______________ [if the Security is to bear interest prior to Maturity, insert,
-------------------------------------------------------------
and to pay interest thereon from ___________________ or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on ____________ and _____________in each year, commencing
__________________, at the rate of _____% per annum, until the principal hereof
is paid or made available for payment [if applicable, insert -- and (to the
----------------------
extent that the payment of such interest shall be legally enforceable) at the
rate of _______% per annum on any overdue principal and premium and on any
overdue installment of interest]. 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 Security (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 __________ or ________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (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 shall be given to Holders of Securities of this series
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 Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert --
-----------------------------------------------------------------
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand.
[Any such interest on any overdue principal that is not so paid
13
<PAGE>
on demand shall bear interest at the rate of ___% per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest shall also be payable on
demand.]]
Payment of the principal of (and premium, if any) and [if applicable,
--------------
insert -- any such] interest on this Security will be made at the office or
- ------
agency of the Company maintained for that purpose in __________________, 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 [if applicable, insert --;
---------------------
provided, however, that at the option of the Company payment of interest may be
- -------- -------
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer to an account
maintained by the Person entitled thereto as specified in the Security Register,
provided that such Person shall have given the Trustee written wire instructions
- --------
at least five Business Days prior to the applicable Interest Payment Date.]
[If the Security is payable in a foreign currency, insert -- the
--------------------------------------------------------
appropriate provision.]
Reference is hereby made to the further provisions of this Security
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, this Security
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 under its corporate seal.
BROOKDALE LIVING COMMUNITIES, INC.
By_____________________________
Title:
Attest:
_______________________
Title:
14
<PAGE>
Section 203. Form of Reverse of Security.
---------------------------
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of __________, 199___ (herein called the
"Indenture"), between the Company and State Street Bank and Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Debt and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [,limited in
aggregate principal amount to $_____________].
[If applicable, insert -- The Securities of this series are subject to
---------------------
redemption upon not less than 30 nor more than 60 days' notice by mail, such 30
or 60 days, as the case may be, to be counted from the date notice is mailed,
[if applicable, insert -- (1) on __________ in any year commencing with the year
---------------------
_________ and ending with the year __________ through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [on or after _____________, 19___], as a whole or
in part, at the election of the Company, [at Redemption Prices determined as
follows:] [at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before _____________%, and if redeemed]
during the 12-month period beginning ____________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
and thereafter at a Redemption Price equal to _____% of the principal amount,]
together in the case of any such redemption [if applicable, insert -- (whether
---------------------
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Regular Record Dates or Special Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[If applicable insert -- The Securities of this series are subject to
--------------------
redemption upon not less than 30 nor more than 60 days' notice by mail, such 30
or 60 days, as the case may be, to be counted from the date notice is mailed,
(1) on __________ in any year commencing with the year _____ and ending with the
year ______ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [on or after ______________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth
15
<PAGE>
in the table below: If redeemed during the 12-month period beginning
______________ of the years indicated,
Redemption Price Redemption Price for
Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
- ---- ------------------- -----------------------
and thereafter at a Redemption Price equal to _________% of the principal
amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date,
but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Regular Record Dates or Special Record Dates referred to on the face hereof, all
as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
_____________ redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than _____% per annum.]
[The sinking fund for this series provides for the redemption on
_____________ in each year beginning with the year ________________ and ending
with the year of ___________ [not less than $_____________ ("mandatory sinking
fund") and not more than] $_________________ aggregate principal amount of
Securities of this series. Securities of this series acquired or redeemed by the
Company otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory] sinking fund payments otherwise required to be
made [in the inverse order in which they become due].]
[If the Securities do not have a sinking fund, then insert -- the
----------------------------------------------------------
Securities do not have the benefit of any sinking fund obligations.]
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effect the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
16
<PAGE>
[If the Security is subject to redemption, insert -- In the event of
------------------------------------------------
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[If the Security is not subject to redemption, insert -- The
----------------------------------------------------
Securities of this series are not redeemable prior to Stated Maturity.]
[If applicable, insert -- The Indenture contains provisions for
---------------------
defeasance at any time of [the entire indebtedness of this Security] [and/or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[If the Security is not an Original Issue Discount Security, insert --
------------------------------------------------------------------
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If
--------------------------------------------------------------
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to - insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
[If the Security is an Indexed Security, insert -- the appropriate
----------------------------------------------
provision.]
[If the Security is convertible, insert -- Subject to and upon
--------------------------------------
compliance with the provisions of the Indenture, the Holder of this Security is
entitled, at its option, at any time on or after the opening of business on
__________, 199__ and on or before the close of business on __________, or in
case this Security or a portion hereof is called for redemption, then in respect
of this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the close
of business on the Redemption Date, to convert this Security (or any portion of
the principal amount hereof which is $ __________or an integral multiple
thereof), at the principal amount hereof, or of such portion, into fully paid
and nonassessable shares (calculated as to each conversion to the nearest 1/100
of a share) of [Common Stock] [Preferred Stock] of the Company at a conversion
price equal to $_________ aggregate principal amount of Securities for each
share of [Common Stock] [Preferred Stock] (or at the current adjusted conversion
price if an adjustment has been made as provided in the Indenture) by surrender
of this Security, duly endorsed or assigned to the Company or in blank, to the
Company at its office or agency in ______________________, accompanied by
written notice to the Company that the Holder hereof elects to convert this
Security, of if less than the entire principal amount hereof is to be converted,
the portion hereof to be converted, and, in case such surrender shall be made
during
17
<PAGE>
the period from the close of business on any Regular Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date (unless this Security of the portion hereof being converted has been called
for redemption on a Redemption Date within such period), also accompanied by
payment in immediately available funds or other funds acceptable to the Company
of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of this Security then being converted. Subject to the aforesaid
requirement for payment and, in the case of a conversion after the Regular
Record Date next preceding any Interest Payment Date and on or before such
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made on conversion for interest accrued hereon or
for dividends on the Common Stock issued on conversion. No fractions of shares
or scrip representing fractions of shares will be issued on conversion, but
instead of any fractional interest the Company shall pay a cash adjustment as
provided in the Indenture. The conversion price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in case of
certain consolidations or mergers to which the Company is a party or the
transfer of substantially all of the assets of the Company, the Indenture shall
be amended, without the consent of any Holders of Securities, so that this
Security, if then outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon the consolidation,
merger or transfer by a holder of the number of shares of [Common Stock]
[Preferred Stock] into which this Security might have been converted immediately
prior to such consolidation, merger or transfer (assuming such holder of [Common
Stock] [Preferred Stock] failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-electing
shares), assuming, if such consolidation, merger or transfer is prior to [insert
date upon which the Securities first become convertible], that this Security was
convertible at the time of such consolidation, merger or transfer at the initial
conversion price specified above as adjusted from [date of issuance], to such
time pursuant to 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 Securities of each series to be
adversely 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
Securities at the time Outstanding of each series to be adversely affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, 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 Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security 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
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional,
18
<PAGE>
to pay the principal of and any premium and interest on this Security 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 Security is registrable in the Security
Register, upon surrender of this Security 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 Security 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 his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $______________ [and any integral multiple
thereof]. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different 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.
No recourse shall be had for the payment of the principal of (or
premium, if any) or the interest on this Security, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer, director or employee, as such, past, present or future, of
the Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes (subject to Section 307 of the Indenture), whether or
not this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture. The Indenture and
this Security shall be governed by and construed in accordance with the laws of
the State of New York without regard to the conflicts of laws principles
thereof.
19
<PAGE>
Section 204. Additional Provisions Required in Book-Entry Security.
-----------------------------------------------------
Any Book-Entry Security issued hereunder shall, in addition to the
provisions contained in Sections 202 and 203 and in addition to any legend
required by the Depositary, bear a legend in substantially the following form:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary. This Security is exchangeable for Securities
registered in the name of a Person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture and may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary."
Section 205. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:________________________
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By __________________________________
Authorized Signatory
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined
20
<PAGE>
in the manner provided, in an Officers' Certificate, or established in one or
more indentures supplemental hereto, prior to the issuance of Securities of any
series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant
to Section 303, are deemed never to have been authenticated and delivered
hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(4) the date or dates on which the principal of and premium, if any,
on the Securities of the series is payable or the method of determination
thereof;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method of calculating such rate or rates of interest,
the date or dates from which such interest shall accrue or the method by which
such date or dates shall be determined, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for any interest
payable on any Interest Payment Date;
(6) if other than the Corporate Trust Office of the Trustee, the place
or places where the principal of and any premium and interest on Securities of
the series shall be payable;
(7) the period or periods within which, the price or prices at which,
the currency or currencies (including currency units) in which and the other
terms and conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods (or the methods of
determination of such a period or periods) within which, the price or prices at
which and the other terms and conditions upon which Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(10) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the series
shall be payable if other than the currency of the United States of America and
the manner of determining the equivalent thereof in
21
<PAGE>
the currency of the United States of America for purposes of the definition of
"Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference to an
index, formula or other method, the index, formula or other method by which such
amounts shall be determined;
(12) if the amount Outstanding of an Indexed Security for purposes of
the definition of "Outstanding" is to be other than the principal face amount at
original issuance, the method of determination of such amount;
(13) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or those in
which the Securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and interest
on Securities of such series as to which such election is made shall be payable,
and the periods within which and the other terms and conditions upon which such
election is to be made;
(14) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
the method by which such portion shall be determined;
(15) if either or both of Section 1502 or 1503 does not apply to the
Securities of any series;
(16) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Book-Entry Securities and, in such case, the
Depositary with respect to such Book-Entry Security or Securities and the
circumstances under which any Book-Entry Security may be registered for transfer
or exchange, or authenticated and delivered, in the name of a Person other than
such Depositary or its nominee, if other than as set forth in Section 305;
(17) the rights, if any, to defer payments of interest on any
Securities of the series by extending the interest payment period, and the
duration of such extensions;
(18) any additional, modified or different covenants or Events of
Default applicable to one or more particular series of Securities;
(19) the application, if any, of Article Fourteen to the Securities of
any Series; and
(20) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution
22
<PAGE>
referred to above and (subject to Section 303) set forth, or determined in the
manner provided, in the Officers' Certificate referred to above or in any such
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth, or providing the manner for determining, the terms of
the series.
Section 302. Denominations.
-------------
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, its Chief
Financial Officer or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver or make available for
delivery such Securities; provided, however, that in the case of Securities of a
-------- -------
series that are not to be originally issued at one time, the Trustee shall
authenticate and deliver or make available for delivery such Securities from
time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Company or its duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant to a Company Order
delivered to the Trustee prior to the time of the first authentication of
Securities of such series. If the form or forms or terms of the Securities of
the series have been established in or pursuant to one or more Board Resolutions
as permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities
23
<PAGE>
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(a) if the form or forms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 201, that such form or
forms have been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been, or in the case of
Securities of a series that are not to be originally issued at one time, will be
established by or pursuant to Board Resolution as permitted by Section 301, that
such terms have been, or in the case of Securities of a series that are not to
be originally issued at one time, will be established in conformity with the
provisions of this Indenture, subject, in the case of Securities of a series
that are not to be originally issued at one time, to any conditions specified in
such Opinion of Counsel; and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; provided, that such Opinion of Counsel need
--------
express no opinion as to whether a court in the United States would render a
money judgment in currency other than that of the United States.
If such form or forms or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which the Trustee determines would expose it to personal liability.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents, with
appropriate modifications to cover such future issuances, are delivered at or
prior to the authentication upon original issuance of the first Security of such
series to be issued.
If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Book-Entry Securities, then the Company shall execute and the Trustee
shall, in accordance with this Section and the Company Order with respect to
such series, authenticate and deliver or make available for delivery one or more
Securities in such form that (i) shall represent and shall be denominated in an
amount equal to the aggregate principal amount of the Outstanding Securities of
such series to be represented by such Book-Entry Security or Securities, (ii)
shall be registered in the name of the Depositary for such Book-Entry Security
or Securities or the nominee of such Depositary, (iii) shall be delivered by the
24
<PAGE>
Trustee to such Depositary or pursuant to such Depositary's instruction and (iv)
shall bear the legend set forth in Section 204.
Unless otherwise established pursuant to Section 301, each Depositary
designated pursuant to Section 301 for a Book-Entry Security must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation. The Trustee shall have no responsibility to
determine if the Depositary is so registered. Each Depositary shall enter into
an agreement with the Trustee governing the respective duties and rights of such
Depositary and the Trustee with regard to Book-Entry Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized officer thereof,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver or make available for delivery, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver or make available for delivery in
exchange therefor one or more definitive Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor.
Until so exchanged the temporary
25
<PAGE>
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Notwithstanding anything herein to the contrary, there shall be only
one Security Register with respect to each series of Securities.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver or make available for delivery, in the name of the designated transferee
or transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver or make available for delivery, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Security Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Security Registrar and the
Trustee duly executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
26
<PAGE>
The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing, any Book-Entry Security shall be
exchangeable pursuant to this Section 305 for Securities registered in the names
of Persons other than the Depositary for such Security or its nominee only if
(i) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Book-Entry Security or if at any time such
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended and the Company does not appoint a successor
Depositary within 90 days after receipt by it of such notice or after it becomes
aware of such cessation, (ii) the Company executes and delivers to the Trustee a
Company Order that such Book-Entry Security shall be so exchangeable or (iii)
there shall have occurred and be continuing an Event of Default with respect to
the Securities. Any Book-Entry Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Securities registered in such names
as such Depositary shall direct.
Notwithstanding any other provision in this Indenture, unless and
until it is exchanged in whole or in part for Securities that are not in the
form of a Book-Entry Security, a Book-Entry Security may not be transferred or
exchanged except as a whole by the Depositary with respect to such Book-Entry
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Book-Entry Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver or make available
for delivery in exchange therefor a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
27
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In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest at the office or agency maintained for such purpose pursuant
to Section 1002; provided, however, that at the option of the Company, interest
-------- -------
on Securities of any series that bear interest may be paid (i) by check mailed
to the address of the Person entitled thereto as it shall appear on the Security
Register or (ii) by wire transfer to an account maintained by the Person
entitled thereto as specified in the Security Register; provided, that such
--------
Person shall have given the Trustee written wire instructions at least five
Business Days prior to the applicable Interest Payment Date.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such
series and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee
28
<PAGE>
an amount of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
29
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purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Securities so delivered and any Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by the Trustee and such
cancellation shall be noted conspicuously on each such Security. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of as directed by a
Company Order or after 90 days, if not in receipt of such Company Order, shall
be disposed of in accordance with the Trustee's customary procedures.
Section 310. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, that any such notice may
--------
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such CUSIP numbers. The Company will promptly
notify the Trustee of any change in the CUSIP numbers.
30
<PAGE>
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities of any series (except as to any surviving
rights of registration of transfer, exchange or replacement of such Securities
herein expressly provided for), and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to such Securities, including, but not limited to,
Article Thirteen hereof, when
(1) either
(A) all such Securities theretofore authenticated and delivered (other
than (i) such Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) such Securities
for whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) 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,
in the case of (B)(i), (ii) or (iii) above, has deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose an amount in
the currency or currencies or currency unit or units in which such Securities
are payable sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture with
respect to such Securities have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and to any
Authenticating Agent under Section 615 and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the
obligations of the Trustee under Section 402, Article Six and the last paragraph
of Section 1003 shall survive.
Section 402. Application of Trust Money.
--------------------------
Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body, unless
it is inapplicable to a particular series or is specifically deleted or modified
in the Board Resolution (or action taken pursuant thereto), Officers'
Certificate or supplemental indenture under which such series of Securities is
issued or has been modified in an indenture supplemental hereto):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series and continuance of such default
for a period of 30 days; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to Securities of that series
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 90 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 principal amount of the
Outstanding Securities of that series a written
32
<PAGE>
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
in furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities of
that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default described in
clause 5 or 6 of Section 501) with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal amount of such Securities as may be
specified in the terms thereof) of all of the Securities of that series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or, in the case of Original Issue Discount Securities or Indexed
Securities, such specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been
33
<PAGE>
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities
of that series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed therefor
in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
If an Event of Default described in clause 5 or 6 of Section 501
occurs, the Outstanding Securities shall ipso facto become immediately due and
payable without need of any declaration or other act on the part of the Trustee
or any Holder.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed
34
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therefor in such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments directly to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
--------
however, that the Trustee may, on behalf of the Holders, vote for the election
- -------
of a trustee in bankruptcy or similar official and may be a member of a
creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
35
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Section 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and any premium and interest, respectively; and
THIRD: The balance, if any, to the Company.
Section 507. Limitation on Suits.
-------------------
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee before or during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
36
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herein provided and for the equal and ratable benefit of all Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
----------------------------------------------------------------
Interest.
- --------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
any interest on such Security on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306 and as otherwise provided in Section 507, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
37
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Section 512. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
Section 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs,
including counsel fees and expenses, against any such party litigant, in the
manner and to the extent provided in the Trust Indenture Act; provided, that
--------
neither this Section nor the Trust Indenture Act shall be deemed to authorize
any court to require such an undertaking or to make such an
38
<PAGE>
assessment in any suit instituted by the Company, the Trustee or the Holders of
10% in aggregate principal amount of the Outstanding Securities of any series.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
Section 602. Notice of Defaults.
------------------
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall, within 90 days, give the Holders of Securities of
such series notice of such default as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
-------- -------
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document (whether in its
original or facsimile form) believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
39
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(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities and Serve as Trustee Under Other Indentures.
---------------------------------------------------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company
40
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with the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
Subject to the provisions of Section 608, the Trustee may become and
act as trustee under other indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding in the same manner as if it were not Trustee.
Section 606. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 607. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as shall be agreed in writing between the Company and the Trustee
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, willful misconduct or bad
faith; and
(3) to indemnify each of the Trustee, or any predecessor Trustee, for,
and to hold it harmless against, any and all loss, liability, damage, claim or
expense incurred without negligence or willful misconduct on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities upon all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
Without limiting any rights available to the Trustee under applicable
law, when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
41
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The provisions of this Section shall survive the satisfaction and
discharge of this Indenture and the resignation or removal of the Trustee.
Section 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of any federal or state supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee being removed may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(d) If at any time:
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(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide Holder
of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and shall comply with
the applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided in Section 106. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
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Section 611. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates; provided, however, that to the extent that such
-------- -------
property and money is not held by the Trustee in trust for the benefit of the
Holders of particular Securities, such retiring Trustee shall transfer and
deliver to such successor Trustee such property and money upon payment of its
charges hereunder.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee
44
<PAGE>
all such rights, powers and trusts referred to in paragraph (a) and (b) of this
Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
--------
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
Section 614. Investment of Certain Payments Held by the Trustee.
--------------------------------------------------
Any amounts held by the Trustee hereunder, other than pursuant to
Article Thirteen hereof, shall be invested by the Trustee from time to time at
the direction of the Company in such investments as may be specified by the
Company and reasonably agreed to by the Trustee from time to time; provided that
--------
in investing trust funds pursuant to the terms of this Section and liquidating
any investments held in trust hereunder, the Trustee may, to the extent
permitted by law, purchase securities (including for the purposes of this
paragraph securities as to which the Trustee or a Trustee Affiliate (as defined
below) is the issuer or guarantor) from, and sell securities to, itself or any
Trustee Affiliate and purchase securities underwritten by, or in which a market
is made by, the Trustee or a Trustee Affiliate. For the purposes hereof, a
"Trustee Affiliate" shall mean an entity that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Trustee. Any income or gain realized as a result of any such
investment shall be promptly distributed (in no event later than the next
Business Day) to the Company after any intended amounts have been paid to the
Holders entitled thereto, except after the occurrence and during the continuance
of an Event of Default. The Trustee shall have no liability to the Company for
any loss resulting from any investment made in accordance with this Section, and
shall bear no expense in connection with any investment pursuant to this
Section. Any such investment may be sold (without regard to maturity date) by
the Trustee whenever necessary to make any distribution
45
<PAGE>
required by this Indenture. Nothing herein shall require the Trustee to invest
funds held by it pursuant to the last paragraph of Section 1003.
Section 615. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
--------
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and
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<PAGE>
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:_____________
STATE STREET BANK AND TRUST COMPANY,
As Trustee
By_________________________
As Authenticating Agent
By_________________________
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than __________ and _________ in each year, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders as of the preceding __________ or _________, as the case may be,
and (b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list in similar
form and content as of a date not more than 15 days prior to the time such list
is furnished; excluding from any such list names and addresses received by the
Trustee in its capacity as Security Registrar.
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Section 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.
Section 703. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty days after each May 15 following the date of the
first issuance of Securities hereunder deliver to Holders a brief report, dated
as of such May 15, which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company promptly will notify the Trustee when any Securities are listed on any
stock exchange or delisted therefrom.
Section 704. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided, that any such
--------
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety shall be a
corporation, partnership or trust organized and validly existing under the laws
of the United States of America, any State thereof or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest on all
the Securities and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
This Section shall not apply to any merger or consolidation in which
the Company is the surviving corporation.
Section 802. Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
49
<PAGE>
Section 803. Officers' Certificate and Opinion of Counsel.
--------------------------------------------
The Trustee, subject to the provisions of Sections 601 and 603, shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, conveyance, transfer or lease, and
any such assumption, complies with the provisions of this Article before the
Trustee shall execute any supplemental indenture required pursuant to this
Article.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to all or any
series of Securities; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal, and
with or without interest coupons, or to permit or facilitate the issuance of
Securities in uncertificated form or in the form of Book-Entry Securities; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any such
--------
addition, change or elimination (i) shall neither (A) apply to any Security of
any series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Security with respect to such provision or (ii) shall become
effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
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<PAGE>
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
611(b); or
(9) if allowed, without penalty under applicable laws and regulations,
to permit payment in the United States (including any of the States thereof and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction of principal, premium, if any, or interest, if any,
on Securities in bearer form or coupons, if any; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein or
to make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this clause (10), other
--------
than with respect to a defective provision, shall not adversely affect the
interests of the Holders of Securities of any series in any material respect.
Section 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series adversely affected
by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
--------
however, that no such supplemental indenture shall, without the consent of the
- -------
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502, or
change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or adversely affect any right of the Holder of any Security to require
the Company to repurchase such Security, or adversely affect the right to
convert any Security as contemplated by Article Fourteen or modify the
provisions of Article Thirteen or the definition of "Senior Debt" in a manner
adverse to the Holder of any Security in any material respect, or
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<PAGE>
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1007, except to increase any percentage set forth in such Sections or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require the
-------- -------
consent of any Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section and Section 1007, or the deletion of
this proviso, in accordance with the requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
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Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of the series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Trustee is hereby initially appointed Paying Agent, and the
Corporate Trust Office of the Trustee is initially designated as the office or
agency for the foregoing purposes. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
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Section 1003. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on any Securities of that series, deposit with
a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the
Securities of that series; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or received
by the Trustee in respect of obligations deposited with the Trustee pursuant to
Article Fifteen, or then held by the Company, in trust for the payment of the
principal of (and premium, if any) or interest on any Security of any series and
remaining unclaimed for two years after such principal (and premium, if
54
<PAGE>
any) or interest has become due and payable shall be paid to the Company on
Company Request (unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof (unless the Company has remitted required moneys or other
property to the appropriate governmental authority under any applicable escheat
or abandoned or unclaimed property laws, or has otherwise been discharged under
such laws or laws of similar applicability, in which case such Holder shall look
solely to its remedies (if any) under such laws and not to the Company), and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
- -------- -------
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
Section 1004. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or any Operating Property of the Company
or any Restricted Subsidiary, and (2) all lawful claims for labor materials and
supplies which, if unpaid, might by law become a lien upon any Operating
Property of the Company or any Restricted Subsidiary; provided, however, that
-------- -------
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (a) whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings or (b) which is not of material importance to the business,
operations, financial condition or results of operations of the Company and its
Restricted Subsidiaries taken as a whole.
Section 1005. Maintenance of Operating Properties.
-----------------------------------
The Company will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements to the Operating Properties as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company or any
- -------- -------
Restricted Subsidiary from discontinuing the operation and maintenance of any of
such Operating Properties or from omitting to make any repairs, renewals,
replacements, betterments or improvements thereof if such discontinuance or
omission is in the judgement of the Company, desirable in the conduct of the
business of the Company and its Restricted Subsidiaries taken as a whole.
Section 1006. Corporate Existence.
-------------------
55
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Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
-------- -------
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.
Section 1007. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1004 to 1006, inclusive, with
respect to the Securities of any series if before or after the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to waive compliance with any
covenant or condition hereunder. If a record date is fixed, the Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to waive any such compliance, whether or not such Holders remain
Holders after such record date.
Section 1008. Compliance Certificate.
----------------------
The Company will furnish to the Trustee on or before May 1 in each
year (beginning the first May 1 after the date of original issuance of
Securities hereunder) a brief certificate (which need not comply with Section
102) from the principal executive, financial or accounting officer of the
Company stating that in the course of the performance by the signer of his or
her duties as an officer of the Company he or she would normally have knowledge
of any default or non-compliance by the Company in the performance of any
covenants or conditions contained in this Indenture, stating whether or not he
or she has knowledge of any such default or non-compliance and, if so,
specifying each such default or non-compliance of which the signer has knowledge
and the nature thereof. For purposes of this Section 1008, non-compliance or
default shall be determined without regard to any grace period or requirement of
notice provided pursuant to the terms of the Indenture.
56
<PAGE>
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
------------------------
Securities of any series which are redeemable in whole or in part
before their Stated Maturity shall be redeemable in accordance with their terms
and (except as otherwise specified as contemplated by Section 301 for Securities
of any series) in accordance with this Article.
Section 1102. Election to Redeem: Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution or Officers' Certificate. In
case of any redemption at the election of the Company of the Securities of any
series, the Company shall, at least 60 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities (a) prior
to the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture or (b) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction or
condition.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
- --------
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all of the Securities
of such series and of a specified tenor are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
57
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The provisions of the two preceding paragraphs shall not apply
with respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall identify the Securities to be
redeemed (including CUSIP numbers) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) in the case of partial redemption of any Securities, the
principal amounts of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security, or portion thereof, to be redeemed and,
if applicable, that interest thereon will cease to accrue on and after said
date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the
case, and
(7) that there exists a conversion privilege.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company and shall be
irrevocable.
58
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Section 1105. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money in the currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.
Section 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
-------- -------
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 1107. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver or make available for delivery to the
Holder of such Security without service charge, a new Security or Securities of
the same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered. If a Book-
Entry Security is so surrendered, such new Security so issued shall be a new
Book-Entry Security.
59
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ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited. Such
--------
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 45 days prior to each sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and stating the basis for such credit and that such
Securities have not been previously so credited and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner
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provided in Section 1104. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 1106 and 1107.
ARTICLE THIRTEEN
Subordination of Securities
Section 1301. Securities Subordinate to Senior Debt.
-------------------------------------
The Company covenants and agrees, and each Holder of a Security,
by his acceptance thereof, likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article (subject to the
provisions of Article Four and Article Fifteen), the payment of the principal of
(and premium, if any) and interest on each and all of the Securities (including
any amounts payable upon a purchase of the Securities) are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Debt.
Section 1302. Payment Over of Proceeds Upon Dissolution, Etc.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, or (b) any liquidation, dissolution
or other winding up of the Company, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshaling of assets and liabilities of the Company,
then and in any such event specified in (a), (b) or (c) above (each such event,
if any, herein sometimes referred to as a "Proceeding") the holders of Senior
Debt shall be entitled to receive payment in full of all amounts due or to
become due on or in respect of all Senior Debt, or provision shall be made for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, before the Holders of the Securities are entitled
to receive any payment or distribution of any kind or character, whether in
cash, property or securities, on account of principal of (or premium, if any) or
interest on or other obligations in respect of the Securities or on account of
any purchase or other acquisition of Securities by the Company or any Subsidiary
of the Company (all such payments, distributions, purchases and acquisitions
herein referred to, individually and collectively, as a "Securities Payment"),
and to that end the holders of Senior Debt shall be entitled to receive, for
application to the payment thereof, any Securities Payment which may be payable
or deliverable in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
Securities Payment before all Senior Debt is paid in full or payment thereof
provided for in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, and if such fact shall, at or prior to the time
of such Securities Payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such Securities Payment shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
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or distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include a payment or distribution of stock or securities
of the Company provided for by a plan of reorganization or readjustment
authorized by an order or decree of a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or of any other
corporation provided for by such plan of reorganization or readjustment which
stock or securities are subordinated in right of payment to all then outstanding
Senior Debt to substantially the same extent as the Securities are so
subordinated as provided in this Article. The consolidation of the Company with,
or the merger of the Company into, another Person or the liquidation or
dissolution of the Company following the conveyance or transfer of all or
substantially all of its properties and assets as an entirety to another Person
upon the terms and conditions set forth in Article Eight shall not be deemed a
Proceeding for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer such properties and assets as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article Eight.
Section 1303. No Payment When Senior Debt in Default.
--------------------------------------
In the event that any Securities are declared due and payable
before their Stated Maturity, then in such event the holders of the Senior Debt
outstanding at the time of such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Debt, or provision shall be made for such payment in cash
or cash equivalents or otherwise in a manner satisfactory to the holders of such
Senior Debt, before the Holders of the Securities are entitled to receive any
Securities Payment.
In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior Debt
beyond any applicable grace period with respect thereto, or in the event that
any event of default with respect to any Senior Debt shall have occurred and be
continuing permitting the holders of such Senior Debt (or a trustee on behalf of
the holders thereof) to declare such Senior Debt due and payable prior to the
date on which it would otherwise have become due and payable, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist and such acceleration shall have been rescinded or annulled, or in the
event any judicial proceeding shall be pending with respect to any such default
in payment or event of default, then no Securities Payment shall be made;
provided, however, that nothing in this paragraph shall prevent the satisfaction
- -------- -------
of any sinking fund payment in accordance with Article Twelve by delivering and
crediting, pursuant to Section 1202, Securities which have been acquired (upon
redemption or otherwise).
In the event that, notwithstanding the foregoing, the Company
shall make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this
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Section, and if such fact shall, at or prior to the time of such Securities
Payment, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such Securities Payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any Securities
Payment with respect to which Section 1302 would be applicable.
Section 1304. Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article or elsewhere in this Indenture
or in any of the Securities shall prevent (a) the Company, at any time except
during the pendency of any Proceeding referred to in Section 1302 or under the
conditions described in Section 1303, from making Securities Payments, or (b)
the application by the Trustee of any money deposited with it hereunder to
Securities Payments or the retention of such Securities Payment by the Holders,
if, at the time of such application by the Trustee, it did not have knowledge
that such Securities Payment would have been prohibited by the provisions of
this Article.
Section 1305. Subrogation to Rights of Holders of Senior Debt.
-----------------------------------------------
Subject to the payment in full of all amounts due or to become due
on or in respect of Senior Debt, or the provision for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Debt, the Holders of the Securities shall be subrogated to the rights of the
holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of
(and premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of the
Senior Debt of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Debt by Holders of the Securities or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Debt.
Section 1306. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Debt on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as among the Company, its creditors other than holders of Senior Debt
and the Holders of the Securities, the obligation of the Company, which is
absolute and unconditional (and which, subject to the rights under this Article
of the holders of Senior Debt, is intended to rank equally with all other
general obligations of the Company), to pay to the Holders of the Securities the
principal of (and premium, if any) and interest on the Securities as and when
the same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of the Securities
and creditors of the Company other than the holders of
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Senior Debt; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
Section 1307. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 1308. No Waiver of Subordination Provisions.
-------------------------------------
No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
Section 1309. Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 601, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
-------- -------
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become
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payable for any purpose (including, without limitation, the payment of the
principal of (and premium, if any) or interest on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purpose
for which such money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Debt (or a
trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
Section 1310. Reliance on Judicial Order or Certificate of Liquidating Agent.
--------------------------------------------------------------
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 601, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
Section 1311. Trustee Not Fiduciary for Holders of Senior Debt.
------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Securities or to
the Company or to any other Person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article or otherwise.
Section 1312. Rights of Trustee as Holder of Senior Debt; Preservation of
-----------------------------------------------------------
Trustee's Rights.
- ----------------
The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article with respect to any Senior Debt which may
at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
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Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607.
Section 1313. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
--------
however, that Section 1312 shall not apply to the Company or any Affiliate of
- -------
the Company if it or such Affiliate acts as Paying Agent.
Section 1314. Defeasance of this Article Thirteen.
-----------------------------------
The subordination of the Securities provided by this Article
Thirteen is expressly made subject to the provisions for defeasance or covenant
defeasance in Article Fifteen hereof and, anything herein to the contrary
notwithstanding, upon the effectiveness of any such defeasance or covenant
defeasance, the Securities then outstanding shall thereupon cease to be
subordinated pursuant to this Article Thirteen.
ARTICLE FOURTEEN
Conversion of Securities
Section 1401. Applicability of Article.
------------------------
If pursuant to Section 301 provision is made for the conversion of
Securities pursuant to this Article Fourteen, then the provisions of this
Article Fourteen, with such modifications thereto as may be specified pursuant
to Section 301 with respect to any Securities, shall be applicable to the
Securities of such series.
Section 1402. Conversion Privilege and Conversion Price.
-----------------------------------------
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000 may
be converted at the principal amount thereof, or of such portion thereof, into
fully paid and nonassessable shares (calculated as to each conversion to the
nearest 1/100 of a share) of Common Stock of the Company, at the conversion
price, determined as hereinafter provided, in effect at the time of conversion.
Such conversion right shall commence at the opening of business on the date
provided for with respect to such Securities and expire at the close of business
on the date provided for with respect to such Securities. In case a Security or
portion thereof is called for redemption, such conversion right in respect of
the Security or portion
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so called shall expire at the close of business on the Redemption Date, unless
the Company defaults in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion is herein referred to as the "conversion price". The conversion
price shall be adjusted in certain instances as provided in Section 1405.
Section 1403. Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 1002, accompanied by written
notice to the Company at such office or agency that the Holder elects to convert
such Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within such
period) be accompanied by payment in immediately available funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of Securities being surrendered
for conversion. Except as provided in the preceding sentence and subject to the
third paragraph of Section 307, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities surrendered for
conversion or on account of any dividends on the Common Stock issued upon
conversion.
Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
at such time. As promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 1404.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
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Section 1404. Fractions of Shares.
-------------------
No fractional shares of Common Stock shall be issued upon
conversion of Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the market price per
share of Common Stock (as determined by the Board of Directors or in any manner
prescribed by the Board of Directors) at the close of business on the day of
conversion.
Section 1405. Adjustment of Conversion Price.
------------------------------
(1) In case at any time after the date of the issuance of the
applicable Securities, the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock, the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(2) In case at any time after the date of the issuance of the
applicable Securities, the Company shall issue rights or warrants to all holders
of its Common Stock (not being available on an equivalent basis to Holders of
the Securities upon conversion) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the current market price
per share (determined as provided in paragraph (8) of this Section) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the conversion price in effect at the opening of business on
the day following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately after
the
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opening of business on the day following the date fixed for such determination.
For the purposes of this paragraph (2), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not
issue any rights or warrants in respect of shares of Common Stock held in the
treasury of the Company.
(3) In case at any time after the date of the issuance of the
applicable Securities, outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and, conversely,
in case outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the conversion price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) In case at any time after the date of the issuance of the
applicable Securities, the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid in cash out of
the retained earnings of the Company and any dividend or distribution referred
to in paragraph (1) of this Section), the conversion price shall be adjusted so
that the same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (8) of this Section) of the Common Stock on
the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of the portion of
the assets or evidences of indebtedness so distributed applicable to one share
of Common Stock and the denominator shall be such current market price per share
of the Common Stock, such adjustment to become effective immediately prior to
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution.
(5) In case at any time after the date of the issuance of the
applicable Securities, the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 1411 applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (I) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) has been made and (II) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of any non-cash consideration payable in respect of any tender offer
by the Company or any of its subsidiaries
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for all or any portion of the Common Stock concluded within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to paragraph (6) of this Section has been made, exceeds 15%
of the product of the current market price per share of the Common Stock on the
date for the determination of holders of shares of Common Stock entitled to
receive such distribution times the number of shares of Common Stock outstanding
on such date, then, and in each such case, immediately after the close of
business on such date for determination, the conversion price shall be decreased
so that the same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by a
fraction (i) the numerator of which shall be equal to the current market price
per share (determined as provided in paragraph (8) of this Section) of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the excess of such combined amount over such 15% and (y) the
number of shares of Common Stock outstanding on such date for determination and
(ii) the denominator of which shall be equal to the current market price per
share (determined as provided in paragraph (8) of this Section) of the Common
Stock on such date for determination.
(6) In case at any time after the date of the issuance of the
applicable Securities, a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall require the payment to stockholders
of an aggregate consideration having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution) that combined together with (I) the aggregate of the cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as of
the expiration of such tender offer, of any non-cash consideration payable in
respect of any other tender offer, by the Company or any Subsidiary for all or
any portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this paragraph (6) has been made and (II) the aggregate amount of any
distributions to all holders of the Company's Common Stock made exclusively in
cash within 12 months preceding the expiration of such tender offer and in
respect of which no adjustment pursuant to paragraph (5) of this Section has
been made, exceeds 15% of the product of the current market price per share of
the Common Stock (determined as provided in paragraph (8) of this Section) as of
the last time (the "Expiration Time") tenders could have been made pursuant to
such tender offer (as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time, then,
and in each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the conversion price shall be adjusted so
that the same shall equal the price determined by multiplying the conversion
price immediately prior to close of business on the date of the Expiration Time
by a fraction (i) the numerator of which shall be equal to (A) the product of
(I) the current market price per share of the Common Stock (determined as
provided in paragraph (8) of this Section) on the date of the Expiration Time
and (II) the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the aggregate non-cash
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares, and (ii) the
denominator of which shall be equal to the product of (A) the current market
price per
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share of the Common Stock (determined as provided in paragraph (8) of this
Section) as of the Expiration Time and (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time less the
number of all shares accepted for payment pursuant to such tender offer (the
shares deemed so accepted up to any such maximum, being referred to as the
"Purchased Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 1412 applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and "the date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section).
(8) For the purpose of any computation under paragraphs (2), (4), (5)
and (6) of this Section, the current market price per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices for the
five consecutive Trading Days selected by the Company commencing not more than
20 Trading Days before, and ending not later than the earlier of the day in
question and the day before the "ex" date with request to the issuance or
distribution requiring such computation. The closing price for each day shall
be the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on such
National Market System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose. For purposes of this
paragraph, the term "'ex' date", when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on such exchange or in such market without the right to receive such issuance or
distribution.
(9) No adjustment in the conversion price shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this paragraph
-------- -------
(9) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this paragraph (9) shall
be made to the nearest cent.
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(10) The Company may make such reductions in the conversion
price, in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons. The Company
shall have the power to resolve any ambiguity or correct any error in this
paragraph (10) and its actions in so doing shall be final and conclusive.
Section 1406. Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 1405 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted conversion price and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each office or agency maintained for the
purpose of conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the conversion price has been adjusted
and setting forth the adjusted conversion price shall forthwith be required, and
as soon as practicable after it is required, such notice shall be mailed by the
Company to all Holders at their last addresses as they shall appear in the
Security Register.
Section 1407. Notice of Certain Corporate Action.
----------------------------------
In case at any time after the date 20 days prior to the date on
which the Securities first become convertible:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out of its
retained earnings; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
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then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 1002, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or warrants, or, if
a record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined, or (y) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up. Neither the failure to give such notice
nor any defect therein shall affect the legality or validity of the proceedings
described in clauses (a) through (d) of this Section 1407. If at the time the
Trustee shall not be the conversion agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
Section 1408. Company to Reserve Common Stock.
-------------------------------
The Company shall at all times reserve and keep available, free
from pre-emptive rights, out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of Securities, the full number of shares
of Common Stock then issuable upon the conversion of all outstanding Securities.
Section 1409. Taxes on Conversions.
--------------------
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
Section 1410. Covenant as to Common Stock.
---------------------------
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1409, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
Section 1411. Cancellation of Converted Securities.
------------------------------------
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All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
Section 1412. Provisions in Case of Consolidation, Merger or Sale of Assets.
-------------------------------------------------------------
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any sale or transfer of all or substantially all of the assets of the
Company, the Person formed by such consolidation or resulting from such merger
or which acquires such assets, as the case may be, shall execute and deliver to
the Trustee a supplemental indenture providing that the Holder of each Security
then outstanding shall have the right thereafter, during the period such
Security shall be convertible as specified in Section 1402, to convert such
Security only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock of the Company into which such Security might
have been converted immediately prior to such consolidation, merger, sale or
transfer, assuming such holder of Common Stock of the Company (i) is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be ("constituent Person"), or an Affiliate of a constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer (provided that if the kind or amount of securities,
--------
cash and other property receivable upon such consolidation, merger, sale or
transfer is not the same for each share of Common Stock of the Company held
immediately prior to such consolidation, merger, sale or transfer by other than
a constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares), and assuming, if such
consolidation, merger, sale or transfer is prior to the date upon which the
Securities first become convertible, that the Securities were convertible at the
time of such consolidation, merger, sale or transfer at the initial conversion
price specified in Section 1402 as adjusted from the date of the issuance of the
applicable Securities to such time pursuant to Section 1405. Such supplemental
indenture shall provide for adjustments which, for events subsequent to the
effective date of such supplemental indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
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ARTICLE FIFTEEN
Defeasance and Covenant Defeasance
Section 1501. Applicability of Article; Company's Option to Effect Defeasance
---------------------------------------------------------------
or Covenant Defeasance.
----------------------
Unless, pursuant to Section 301, provision is made that either or
both of (a) defeasance of the Securities of a series under Section 1502 or (b)
covenant defeasance of the Securities of a series under Section 1503 shall not
apply to the Securities of a series, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
Fifteen, with such modifications thereto as may be specified pursuant to Section
301 with respect to any Securities, shall be applicable to the Securities of
such series, and the Company may at its option by Board Resolution, at any time,
with respect to the Securities of such series, elect to have either Section 1502
(if applicable) or Section 1503 (if applicable) applied to the Outstanding
Securities of such series upon compliance with the conditions set forth below in
this Article Fifteen.
Section 1502. Defeasance and Discharge.
------------------------
Upon the Company's exercise of its option to have this Section
applied to any series of Securities, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities of
such series, and the provisions of Article Thirteen hereof shall cease to be
effective, on and after the date the conditions precedent set forth below are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series which
shall thereafter be deemed to be "Outstanding" only for the purposes of the
Sections of this Indenture referred to in clauses (A) and (B) of this Section,
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of Outstanding Securities of
such series to receive, solely from the trust fund described in Section 1504 as
more fully set forth in such Section, payments of the principal of (and premium,
if any) and interest on such Securities when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 305, 306,
1002 and 1003 and such obligations as shall be ancillary thereto, (C) the
rights, powers, trusts, duties, immunities and other provisions in respect of
the Trustee hereunder and (D) this Article Fifteen. Subject to compliance with
this Article Fifteen, the Company may exercise its option under this Section
1502 notwithstanding the prior exercise of its option under Section 1503 with
respect to the Securities of such series. Following a defeasance, payment of
such Securities may not be accelerated because of an Event of Default.
75
<PAGE>
Section 1503. Covenant Defeasance.
-------------------
Upon the Company's exercise of its option (if any) to have this
Section applied to any series of Securities, the Company shall be released from
its obligations under Section 801 (and any covenant made applicable to such
Securities pursuant to Section 301), the occurrence of an event specified in
Section 501(4) (with respect to Section 801 or any such covenant) (and any other
Event of Default applicable to such Securities that are determined pursuant to
Section 301 to be subject to this provision) shall not be deemed to be an Event
of Default with respect to the Outstanding Securities of such series and the
provisions of Article Thirteen hereof shall cease to be effective on and after
the date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and such Securities shall thereafter be deemed not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Section 801 (and any other covenant made applicable to such Security pursuant to
Section 301 and any such Events of Default), but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities of such
series, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
such other covenant whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or such other covenant or by reason of any
reference in any such Section or such other covenant to any other provision
herein or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby. Notwithstanding the defeasance by the
Company of its obligations under Section 801, any successor shall be required to
assume the Company's obligations under Section 607 as a condition to such
succession.
Section 1504. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions precedent to application of
either Section 1502 or Section 1503 to the Outstanding Securities of or within
such series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 609 who shall agree to comply with the provisions of this Article
Fifteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (A) money in an amount (in
such currency, currencies or currency units in which such Securities are then
specified as payable at Maturity), or (B) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment, money in an amount, or (C) a combination thereof in an
amount, sufficient, without reinvestment, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (i) the principal of (and premium, if any) and interest on the
Outstanding Securities of such series on the Maturity of such principal,
premium, if any, or interest and (ii) any mandatory sinking fund payments
applicable to such Securities on the day on which such payments are due and
payable in accordance with the
76
<PAGE>
terms of this Indenture and such Securities. Before such a deposit the Company
may make arrangements satisfactory to the Trustee for the redemption of
Securities at a future date or dates in accordance with Article Eleven, which
shall be given effect in applying the foregoing. For this purpose, "U.S.
Government Obligations" means securities that are (x) direct obligations of the
United States of America for the payment of which its full faith and credit is
pledged or (y) obligations 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, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any such U.S. Government Obligation or
a specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depositary receipt, provided that (except as required by law) such custodian is
--------
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depositary receipt.
(2) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing (A) on the date of such deposit or
(B) insofar as subsections 501(5) and (6) are concerned, at any time during the
period ending on the 91st day after the date of such deposit or, if longer,
ending on the day following the expiration of the longest preference period
applicable to the Company in respect of such deposit (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period).
(3) Such defeasance or covenant defeasance shall not (A) cause the
Trustee for the Securities of such series to have a conflicting interest as
defined in Section 608 or for purposes of the Trust Indenture Act with respect
to any Securities of the Company or (B) result in the trust arising from such
deposit to constitute, unless it is qualified as, a regulated investment company
under the Investment Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(5) In the case of an election under Section 1502, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (y) since the date of this Indenture there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
77
<PAGE>
(6) In the case of an election under Section 1503, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
(7) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section 301.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1502 or
the covenant defeasance under Section 1503 (as the case may be) have been
complied with.
Section 1505. Deposited Money and U.S. Government Obligations to be Held in
-------------------------------------------------------------
Trust; Other Miscellaneous Provisions.
-------------------------------------
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (collectively, for
purposes of this Section 1505, the "Trustee") pursuant to Section 1504 in
respect of the Outstanding Securities of such series shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
this Indenture, to the payment, either directly or through any Paying Agent (but
not including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law. Money so held in trust shall not be subject to the provisions of Article
Thirteen.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 1504 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 1504 which in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
78
<PAGE>
Section 1506. Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1505 by reason of any order or judgment or any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Fifteen until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 1505; provided, however, that
-------- -------
if the Company makes any payment of principal of (and premium, if any) or
interest on any such Security following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money held by the Trustee or the Paying Agent.
Section 1507. Qualifying Trustee.
------------------
Any trustee appointed pursuant to Section 1504 for the purpose of
holding trust funds deposited pursuant to that Section shall be appointed under
any agreement in form acceptable to the Trustee and shall provide to the Trustee
a certificate of such trustee, upon which certificate the Trustee shall be
entitled to conclusively rely, that all conditions precedent provided for herein
to the related defeasance or covenant defeasance have been complied with. If no
event shall the Trustee be liable for any acts or omissions of said trustee.
ARTICLE SIXTEEN
Immunity of Incorporators, Stockholders, Officers, Directors and Employees
Section 1601. Exemption from Individual Liability.
-----------------------------------
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or otherwise
in respect thereof, shall be had against any incorporator, stockholder, officer,
director, or employee, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations
of the Company, and that no such personal liability whatever shall attach to, or
is or shall be incurred by, the incorporators, stockholders, officers,
directors, or employees, as such, of the Company or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer, director, or employee,
as such, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom, are hereby expressly
waived and
79
<PAGE>
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of such Securities.
*****
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
80
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By:______________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
By:______________________________________
Name:
Title:
81
<PAGE>
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
On ____________, 199__, before me, ____________, Notary Public,
personally appeared __________________, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity and that by his/her
signature on the instrument the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
_______________________________________
Notary Public
82
<PAGE>
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
On the _____ day of ___________, 199_, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
he/she is _____________ of _______________________________, one of the companies
described in and which executed the foregoing instrument; that it was so affixed
by authority of the Board of Directors of said corporation, and that he/she
signed his/her name thereto by like authority of the Board of Directors of said
corporation.
___________________________________
Notary Public
83
<PAGE>
Exhibit 4.4
FORM OF
CERTIFICATE OF DESIGNATIONS
OF THE
____% SERIES __ [CONVERTIBLE] PREFERRED STOCK
(Par Value $0.01 Per Share)
OF
BROOKDALE LIVING COMMUNITIES, INC.
------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-----------
The undersigned duly authorized officer of Brookdale Living Communities,
Inc., a corporation organized and existing under the General Corporation Law of
the State of Delaware (the "Company"), in accordance with the provisions of
Section 103 thereof, and pursuant to Section 151 thereof, DOES HEREBY CERTIFY:
That the Certificate of Incorporation of the Company provides that the
Company is authorized to issue 20,000,000 shares of Preferred Stock, $0.01 par
value per share, issuable in series by the Board; and
That pursuant to the authority conferred upon the Board of Directors (the
"Board") by the Certificate of Incorporation of the Company, the Board on
_________ __, 199_, approved the creation, issuance and the voting powers of
shares of Preferred Stock to be issued in one or more series as determined by a
duly authorized committee of the Board, and, on _______________, 199_ such duly
authorized committee of the Board adopted the following resolution creating a
series of ________________ shares of Preferred Stock designated as set forth
below:
RESOLVED, that pursuant to the authority expressly granted to and vested in
the Board by provisions of the Certificate of Incorporation of the Company, as
amended (the "Certificate of Incorporation") and the General Corporation Law of
the State of Delaware, the issuance of a series of Preferred Stock, which shall
consist of ________________ shares of the ____________ shares of Preferred
Stock which the Company now has authority to issue, be, and the same hereby is,
authorized, and this committee of the Board hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
shares of such series (in addition to the powers, designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of
<PAGE>
Incorporation which may be applicable to the Preferred Stock) authorized by this
resolution as follows:
1. Designation and Rank. The designation of such series of Preferred
--------------------
Stock authorized by this resolution shall be ____% Series __ [Convertible]
Preferred Stock (the "Series __Preferred Stock"). The maximum number of shares
of Series __ Preferred Stock shall be _________________. Shares of the Series
__ Preferred Stock shall have a liquidation preference of $_____ per share. The
Series __Preferred Stock shall rank prior to the Company's Common Stock and to
all other classes and series of equity securities of the Company now or
hereafter authorized, issued or outstanding (the Common Stock and such other
classes and series of equity securities collectively may be referred to herein
as the "Junior Stock"), other than any classes or series of equity securities of
the Company ranking on a parity with (the "Parity Stock") or senior to (the
"Senior Stock") the Series __ Preferred Stock as to dividend rights and rights
upon liquidation, winding up or dissolution of the Company. The Series __
Preferred Stock shall be junior to all outstanding debt of the Company. The
Series __ Preferred Stock shall be [senior to] [on a parity with] the Series __
Preferred Stock as to both payments of dividends and distribution of assets upon
liquidation, dissolution and winding up of the Company. The Series __ Preferred
Stock shall be subject to creation of Senior Stock, Parity Stock and Junior
Stock to the extent not expressly prohibited by the Company's Certificate of
Incorporation.
2. Cumulative Dividends; Priority.
------------------------------
(a) Payment of Dividends. The holders of record of shares of
--------------------
Series __ Preferred Stock shall be entitled to receive, when, as, and if
declared by the Board, out of funds legally available therefor, cumulative
cash dividends at the rate of _____% per annum per share, which shall
accrue from the original issue date and be payable quarterly in arrears on
the first day of [March, June, September and December] in each year,
commencing on _______________, ____, or, if such day is a non-business day,
on the next business day (each of such dates, a "Dividend Payment Date").
Each declared dividend shall be payable to holders of record as they appear
on the stock books of the Company at the close of business on such record
dates, not more than 60 calendar days preceding the payment dates therefor,
as are determined by the Board or a duly authorized committee thereof (each
of such dates, a "Record Date"). Quarterly dividend periods (each a
"Dividend Period") shall commence on and include the first day of [March,
June, September and December] of each year and shall end on and include the
date next preceding the next following Dividend Payment Date.
The amount of dividends payable per share for each full Dividend
Period shall be computed by dividing by four the amount determined by
applying the _____% annual dividend rate to the $_____ liquidation
preference of such
-2-
<PAGE>
share. Dividends on the Series __ Preferred Stock shall accrue day by day.
Dividends shall be cumulative. The initial quarterly dividend payable on
_______________, ____ and the amount of any dividend payable for any other
period shorter than a full Dividend Period shall be computed on the basis
of a 360-day year composed of twelve 30-day months and the actual number of
days elapsed in such period.
(b) Priority as to Dividends. No full dividends shall be
------------------------
declared or paid or set apart for payment on Preferred Stock of any series
ranking, as to dividends, on a parity with or junior to the Series __
Preferred Stock for any period unless full dividends for the immediately
preceding Dividend Period on the Series __ Preferred Stock (including any
accumulation in respect of unpaid dividends from prior Dividend Periods)
have been or contemporaneously are declared and paid (or declared and a sum
sufficient for the payment thereof set apart for such payment). When
dividends are not paid in full (or declared and a sum sufficient for such
full payment is not so set apart) upon the Series __ Preferred Stock and
any other Preferred Stock ranking on a parity as to dividends with the
Series __ Preferred Stock, dividends declared upon shares of Series __
Preferred Stock and such other Preferred Stock ranking on a parity as to
dividends shall be declared pro rata, so that the amount of dividends
declared per share on the Series __ Preferred Stock and such other
Preferred Stock shall bear in all cases to each other the same ratio that
accrued dividends for the then-current Dividend Period per share on the
shares of Series __ Preferred Stock (including any accumulation in respect
of unpaid dividends for prior Dividend Periods) and accrued dividends,
including required or permitted accumulations, if any, of such other
Preferred Stock, bear to each other.
Unless full dividends on the Series __ Preferred Stock have been
declared and paid or set apart for payment for the immediately preceding
Dividend Period (including any accumulation in respect of unpaid dividends
for prior Dividend Periods) (i) no cash dividend or other distribution
(other than in shares of Junior Stock) shall be declared or paid or set
aside for payment on the Junior Stock, (ii) the Company may not, directly
or indirectly, repurchase, redeem or otherwise acquire any shares of its
Junior Stock (or any moneys paid to or made available for a sinking fund
for the redemption of any shares except by conversion into or exchange for
Junior Stock) and (iii) the Company may not, directly or indirectly,
repurchase, redeem or otherwise acquire any shares of Series __ Preferred
Stock or Parity Stock (or any moneys paid to or made available for a
sinking fund for the redemption of any shares of any such stock) otherwise
than pursuant to a pro rata offer to purchase or a concurrent redemption of
all, or a pro rata portion, of the outstanding shares of Series __
Preferred Stock and Parity Stock (except by conversion into or exchange for
Junior Stock).
-3-
<PAGE>
The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company if, under the preceding paragraph, the Company would be prohibited
from purchasing or otherwise acquiring such shares at such time and in such
manner.
3. Redemption.
----------
(a) General. The shares of the Series __ Preferred Stock will
-------
not be redeemable prior to ________________, 19__. At any time on or after
__________________, 19__, subject to the applicable restrictions set forth
in this Section 3 and applicable law, the shares of Series __ Preferred
Stock may be redeemed, in whole or in part, at the election of the Company,
upon notice as provided in Section 3(b) hereof, by resolution of its Board
of Directors, at any time or from time to time, at the redemption price of
$_____ per share, plus, in each case, an amount equal to all accrued and
unpaid dividends to the date fixed for redemption.
If less than all the outstanding shares of Series __ Preferred
Stock are to be redeemed, the Company will select those to be redeemed pro
rata, by lot or by a substantially equivalent method. On and after the
redemption date, dividends shall cease to accrue on the shares of Series __
Preferred Stock called for redemption, and they shall be deemed to cease to
be outstanding, provided that the redemption price (including any accrued
and unpaid dividends to the date fixed for redemption) has been duly paid
or provided for.
(b) Notice of Redemption. Notice of any redemption, setting
--------------------
forth (i) the date and place fixed for said redemption, (ii) the redemption
price and (iii) a statement that dividends on the shares of Series __
Preferred Stock to be redeemed will cease to accrue and accumulate on such
redemption date shall be mailed, postage prepaid, at least 30 days but not
more than 60 days prior to said redemption date to each holder of record of
the Series __ Preferred Stock to be redeemed at his or her address as the
same shall appear on the books of the Company. If less than all the shares
of the Series __ Preferred Stock owned by such holder are then to be
redeemed, the notice shall specify the number of shares thereof which are
to be redeemed and the numbers of the certificates representing such
shares.
If such notice of redemption shall have been so mailed and if on
or before the redemption date specified in such notice all funds necessary
for such redemption shall have been set aside by the Company separate and
apart from its other funds in trust for the account of the holders of the
shares of the Series __ Preferred Stock so to be redeemed (so as to be and
continue to be available
-4-
<PAGE>
therefor), then, on and after said redemption date, notwithstanding that
any certificate for shares of the Series __ Preferred Stock so called for
redemption shall not have been surrendered for cancellation, the shares of
the Series __ Preferred Stock so called for redemption shall be deemed to
be no longer outstanding, the dividends thereon shall cease to accrue, and
all rights with respect to such shares of the Series __ Preferred Stock so
called for redemption shall forthwith cease and terminate, except only the
right of the holders thereof to receive out of the funds so set aside in
trust the amount payable on redemption thereof, but without interest, upon
surrender (and endorsement or assignment for transfer, if required by the
Company) of their certificates.
However, if such notice of redemption shall have been so mailed,
and if prior to the date of redemption specified in such notice all said
funds necessary for such redemption shall have been irrevocably deposited
in trust for the account of the holders of the shares of the Series __
Preferred Stock to be redeemed (so as to be and continue to be available
therefor) with a bank or trust company named in such notice doing business
in the City of New York and having capital surplus and undivided profits of
at least $50,000,000, thereupon and without awaiting the redemption date,
all shares of the Series __ Preferred Stock with respect to which such
notice shall have been so mailed, and such deposit shall have been so made
shall be deemed to be no longer outstanding and all rights with respect to
such shares of the Series __ Preferred Stock shall forthwith upon such
deposit in trust cease and terminate, except only the right of the holders
thereof on or after the redemption date to receive from such deposit the
amount payable upon the redemption, but without interest, upon surrender
(and endorsement or assignment to transfer, if required by the Company) of
their certificates.
In case the holders of shares of the Series __ Preferred Stock
which shall have been redeemed shall not within two years (or any longer
period if required by law) after the redemption date claim any amount so
deposited in trust for the redemption of such shares, such bank or trust
company shall, upon demand and if permitted by applicable law, pay over to
the Company any such unclaimed amount so deposited with it, and shall
thereupon be relieved of all responsibility in respect thereof, and
thereafter the holders of such shares shall, subject to applicable escheat
laws, look only to the Company for payment of the redemption price thereof,
but without interest from the date of redemption.
(c) Status of Shares Redeemed. Shares of Series __ Preferred
-------------------------
Stock redeemed, purchased or otherwise acquired for value by the Company,
shall, after such acquisition, have the status of authorized and unissued
shares of Preferred Stock and may be reissued by the Company at any time as
shares of any series of Preferred Stock other than as shares of Series __
Preferred Stock.
-5-
<PAGE>
4. Voting Rights.
-------------
The voting rights of the Series __ Preferred Stock shall be as
follows:
[(a) General Voting Rights. Except as expressly provided
---------------------
hereinafter in this Section, or as otherwise from time to time required by
applicable law, this Series of Preferred Stock shall have no voting rights.
(b) Voting Rights Upon Dividend Arrears.
-----------------------------------
(i) Right to Elect Directors. In the event that an amount
------------------------
equal to six quarterly dividend payments on this Series of Preferred
Stock shall have accrued and be unpaid, the holders of this Series of
Preferred Stock shall have the right, voting separately as a class
together with holders of shares of any Parity Stock upon which like
voting rights have been conferred and are exercisable ("Voting Parity
Stock"), to elect two members of the Board of Directors, each member
to be in addition to the then authorized number of directors, at the
next annual meeting of stockholders and thereafter until dividends on
this Series of Preferred Stock have been paid in full for four
consecutive Dividend Periods, including the last preceding Dividend
Period.
(ii) Term of Office of Directors. Any director who shall
---------------------------
have been elected by holders of this Series of Preferred Stock and
Voting Parity Stock entitled to vote in accordance with this
subparagraph (b) shall hold office for a term expiring (subject to the
earlier payment, or declaration and setting aside for payment, of
dividends on this Series of Preferred Stock for four consecutive
Dividend Periods as described below) at the next annual meeting of
stockholders and during such term may be removed at any time, either
for or without cause, by, and only by, the affirmative vote of the
holders of record of a majority of the shares of this Series of
Preferred Stock and Voting Parity Stock present and voting, in person
or by proxy, at a special meeting of such stockholders called for such
purpose, and any vacancy created by such removal may also be filled at
such meeting. A meeting for the removal of a director elected by the
holders of this Series of Preferred Stock and Voting Parity Stock and
the filling of the vacancy created thereby shall be called by the
Secretary of the Company as promptly as possible and in any event
within 10 days after receipt of a request therefor signed by the
holders of not less than 25% of the outstanding shares of this Series
of Preferred Stock, subject to any applicable notice requirements
imposed by law or regulation. Such meeting shall be held at the
earliest practicable date thereafter, provided
-6-
<PAGE>
that no such meeting shall be required to be held during the 90-day
period preceding the date fixed for the annual meeting of
stockholders.
Upon payment, or declaration and setting aside for payment,
of dividends on this Series of Preferred Stock for four consecutive
Dividend Periods the terms of office of all directors elected by the
holders of the shares of this Series of Preferred Stock and the Voting
Parity Stock pursuant thereto then in office shall, without further
action, thereupon terminate unless otherwise required by law. Upon
such termination the number of directors constituting the Board of
Directors of the Company shall, without further action, be reduced by
two, subject always to the increase of the number of directors
pursuant to the foregoing provisions in the case of the future right
of holders of the shares of this Series of Preferred Stock and Voting
Parity Stock to elect directors as provided above.
(iii) Vacancies. Any vacancy caused by the death or
---------
resignation of a director who shall have been elected in accordance
with this subparagraph (b) may be filled by the remaining director so
elected or, if not so filled, by a vote of holders of a plurality of
the shares of this Series of Preferred Stock and Voting Parity Stock
present and voting, in person or by proxy, at a meeting called for
such purpose. Unless such vacancy shall have been filled by the
remaining director as aforesaid, such meeting shall be called by the
Secretary of the Company at the earliest practicable date after such
death or resignation, and in any event within 10 days after receipt of
a written request signed by the holders of record of at least 25% of
the outstanding shares of this Series of Preferred Stock, subject to
any applicable notice requirements imposed by law or regulation.
Notwithstanding the provisions of this paragraph, no such special
meeting shall be required to be held during the 90-day period
preceding the date fixed for the annual meeting of stockholders.
(iv) Stockholders' Right to Call Meeting. If any meeting
-----------------------------------
of the holders of this Series of Preferred Stock and Voting Parity
Stock required by this subparagraph (b) to be called shall not have
been called within 30 days after personal service of a written request
therefor upon the Secretary of the Company or within 30 days after
mailing the same within the United States of America by registered
mail addressed to the Secretary of the Company at its principal
executive offices, subject to any applicable notice requirements
imposed by law or regulation, then the holders of record of at least
25% of the outstanding shares of this Series of Preferred Stock may
designate in writing one of their number to call such meeting at the
expense of the Company, and such meeting may be called by such
-7-
<PAGE>
person so designated upon the notice required for annual meetings of
stockholders or such shorter notice (but in no event shorter than
permitted by law or regulation) as may be acceptable to the holders of
a majority of the total number of shares of this Series of Preferred
Stock. Any holder of this Series of Preferred Stock so designated
shall have access to the Preferred Stock books of the Company for this
Series of Preferred Stock for the purpose of causing such meeting to
be called pursuant to these provisions.
(v) Quorum. At any meeting of the holders of this Series of
------
Preferred Stock called in accordance with the provisions of this
subparagraph (b) for the election or removal of directors, the
presence in person or by proxy of the holders of a majority of the
total number of shares of this Series of Preferred Stock and Voting
Parity Stock shall be required to constitute a quorum; in the absence
of a quorum, a majority of the holders present in person or by proxy
shall have power to adjourn the meeting from time to time without
notice other than an announcement at the meeting, until a quorum shall
be present.
(c) Voting Rights on Extraordinary Matters. So long as any
--------------------------------------
shares of this Series of Preferred Stock shall be outstanding and unless
the consent or approval of a greater number of shares shall then be
required by law, without first obtaining the approval of the holders of at
least two-thirds of the number of shares of this Series of Preferred Stock
at the time outstanding (voting separately as a class together with the
holders of shares (on a one vote per share basis) of Voting Parity Stock)
given in person or by proxy at a meeting at which the holders of such
shares shall be entitled to vote separately as a class, the Company shall
not either directly or indirectly or through merger or consolidation with
any other company, (i) authorize, create or issue, or increase the
authorized or issued amount, of any class or series of stock ranking prior
to the shares of this Series of Preferred Stock in rights and preferences
or (ii) approve any amendment to (or otherwise alter or repeal) its
Certificate of Incorporation (or this resolution) which would materially
and adversely change the specific terms of this Series of Preferred Stock.
An amendment which increases the number of authorized shares of any class or
series of Preferred Stock or authorizes the creation or issuance of other
classes or series of Preferred Stock, in each case ranking junior to or on a
parity with this Series of Preferred Stock with respect to the payment of
dividends and distribution of assets upon liquidation, dissolution or winding
up, or substitutes the surviving entity in a merger or consolidation,
reorganization or other business combination for the Company, shall not be
considered to be such an adverse change.
-8-
<PAGE>
(d) One Vote Per Share. In connection with any matter on which
------------------
holders of this Series of Preferred Stock are entitled to vote as provided
in paragraphs (b) and (c) of this Section, or any matter on which the
holders of this Series of Preferred Stock are entitled to vote as one class
or otherwise pursuant to law or the provisions of the Certificate of
Incorporation, each holder of this Series of Preferred Stock shall be
entitled to one vote for each share of this Series of Preferred Stock held
by such holder.]
[In connection with any matter on which holders of the Common
Stock, par value $0.01 per share, are entitled to vote, each holder of this
Series of Preferred Stock shall be entitled to [one vote, voting together
with such Common Stock as a single class, for each share of this Series of
Preferred Stock held by such holder].]
5. No Sinking Fund. [No sinking fund will be established for the
---------------
retirement or redemption of shares of Series __ Preferred Stock.] [Insert any
applicable sinking fund provisions. ]
[6. Conversion. [Insert any applicable conversion provisions.]]
----------
[6.] [7.] Liquidation Rights; Priority.
----------------------------
(a) In the event of any liquidation, dissolution or winding up
of the affairs of the Company, whether voluntary or involuntary, after
payment or provision for payment of the debts and other liabilities of the
Company, the holders of shares of the Series __ Preferred Stock shall be
entitled to receive, out of the assets of the Company, whether such assets
are capital or surplus and whether or not any dividends as such are
declared, $_____ per share plus an amount equal to all accrued and unpaid
dividend for prior Dividend Periods, and no more, before any distribution
shall be made to the holders of the Common Stock or any other class of
stock or series thereof ranking junior to the Series __ Preferred Stock
with respect to the distribution of assets. After payment of the full
amount of the liquidation preference, the holders of shares of the Series
__ Preferred Stock shall not be entitled to any further participation.
(b) Nothing contained in this Section 6 shall be deemed to
prevent redemption of shares of the Series __ Preferred Stock by the
Company in the manner provided in Section 3. Neither the merger nor
consolidation of the Company into or with any other company, nor the merger
or consolidation of any other company into or with the Company, nor a sale,
transfer or lease of all or any part of the assets of the Company, shall be
deemed to be a liquidation, dissolution or winding up of the Company within
the meaning of this Section [6][7].
-9-
<PAGE>
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, stating a payment
date and the place where the distributable amounts shall be payable, shall
be given by mail, postage prepaid, no less than 30 days prior to the
payment date stated therein, to the holders of record of the Series __
Preferred Stock at their respective addresses as the same shall appear on
the books of the Company.
(d) If the amounts available for distribution with respect to
the Series __ Preferred Stock and all other outstanding stock of the
Company ranking on a parity with the Series __ Preferred Stock upon
liquidation are not sufficient to satisfy the full liquidation rights of
all the outstanding Series __ Preferred Stock and stock ranking on a parity
therewith, then the holders of each series of such stock will share ratably
in any such distribution of assets in proportion to the full respective
preferential amount (which in the case of Preferred Stock may include
accumulated dividends) to which they are entitled.
IN WITNESS WHEREOF, Brookdale Living Communities, Inc. has caused this
Certificate to be signed by _________________, its [President], and attested by
_________________, its [Secretary], this ____ day of ________________, 199_.
BROOKDALE LIVING COMMUNITIES, INC.
By: _____________________________
[Name and Title]
Attest:
___________________
[Name and Title]
-10-
<PAGE>
EXHIBIT 4.5
- --------------------------------------------------------------------------------
FORM OF
COMMON STOCK
WARRANT AGREEMENT
dated as of ________ __, ____
between
BROOKDALE LIVING COMMUNITIES, INC.
and
[NAME OF WARRANT AGENT], as Warrant Agent
___________________________________
Common Stock Warrants
Expiring ________ __, ____
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES................................................................... 1
RECITALS.................................................................. 1
ARTICLE I
ISSUANCE OF WARRANTS AND FORM, EXECUTION,
DELIVERY AND REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants...................................... 2
SECTION 1.02. Form, Execution and Delivery of Warrant Certificates...... 3
SECTION 1.03. Transfer of Warrants...................................... 5
SECTION 1.04. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates............................................. 6
SECTION 1.05. Cancellation of Warrant Certificates...................... 7
SECTION 1.06. Treatment of Holders [If Warrants are to be issued in
Book-Entry form: and Beneficial Owners] of Warrant
Certificates............................................. 7
ARTICLE II
EXERCISE PRICE, DURATION, EXERCISE AND CALL OF WARRANTS
SECTION 2.01. Exercise Price............................................ 8
SECTION 2.02. Duration of Warrants...................................... 8
SECTION 2.03. Exercise of Warrants...................................... 8
SECTION 2.04. Adjustment Under Certain Circumstances.................... 10
SECTION 2.05. Call of the Warrants...................................... 16
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
[If Warrants are to be issued in Book-Entry Form:
AND BENEFICIAL OWNERS] OF WARRANTS
SECTION 3.01. No Rights as Holders of Warrant Securities Conferred by
Warrants or Warrant Certificates......................... 17
SECTION 3.02. Holder [If Warrants are to be issued in Book-Entry form:
and Beneficial Owner] of Warrant May Enforce Rights...... 17
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
ARTICLE IV
CONCERNING THE WARRANT AGENT
SECTION 4.01. Warrant Agent............................................. 17
SECTION 4.02. Limitations on Warrant Agent's Obligations................ 17
SECTION 4.03. Compliance With Applicable Laws........................... 19
SECTION 4.04. Resignation and Appointment of Successor.................. 19
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendments................................................ 21
SECTION 5.02. Merger, Consolidation, Sale, Transfer or Conveyance....... 22
SECTION 5.03. Notices and Demands to the Company and Warrant Agent...... 23
SECTION 5.04. Addresses................................................. 23
SECTION 5.05. GOVERNING LAW............................................. 23
SECTION 5.06. Delivery of Prospectus.................................... 23
SECTION 5.07. Obtaining of Governmental Approvals....................... 23
SECTION 5.08. Payment of Taxes.......................................... 24
SECTION 5.09. Benefits of Warrant Agreement............................. 24
SECTION 5.10. Headings.................................................. 24
SECTION 5.11. Severability.............................................. 24
SECTION 5.12. Counterparts.............................................. 24
SECTION 5.13. Inspection of Agreement................................... 24
SECTION 5.14. Board of Director Action; No Liability of Directors,
Officers, Employees or Shareholders....................... 24
SECTION 5.15. Warrant Holders Not Shareholders.......................... 25
</TABLE>
EXHIBITS
--------
EXHIBIT A. Form of Warrant Certificate
ii
<PAGE>
COMMON STOCK WARRANT AGREEMENT
COMMON STOCK WARRANT AGREEMENT, dated as of ________ __, ____ (as modified,
amended or supplemented, this "Agreement"), between BROOKDALE LIVING
COMMUNITIES, INC., a Delaware corporation (the "Company") and [NAME OF WARRANT
AGENT], a _________________, as Warrant Agent (the "Warrant Agent").
W I T N E S S E T H:
- - - - - - - - - -
[If Securities and Warrants are to be offered together: WHEREAS, the
------------------------------------------------------
Company proposes to sell [title of Securities being offered] (the "Securities")
together with warrants (each, a "Warrant") representing the right to purchase
Common Stock (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and]
[If Warrants are to be offered separately: WHEREAS, the Company proposes to
-----------------------------------------
sell warrants (each, a "Warrant") representing the right to purchase Common
Stock (the "Warrant Securities"), such warrant certificates and other warrant
certificates issued pursuant to this Agreement being herein called the "Warrant
Certificates"; and]
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange, exercise and cancellation of the Warrants, and the
Company wishes to set forth in this Agreement, among other things, the
provisions of the Warrants, the form of the Warrant Certificates evidencing the
Warrants and the terms and conditions upon which the Warrants may be issued,
transferred, exchanged, exercised and canceled;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND FORM, EXECUTION,
DELIVERY AND REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. Each Warrant shall represent the
--------------------
right, subject to the provisions contained herein and therein, to purchase
[________] Warrant Securities at the Exercise Price set forth in Section 2.01.
[If Securities and Warrants are to be offered together: Warrants shall be issued
-----------------------------------------------------
in units with the Securities [If Warrants are not immediately detachable: and
-------------------------------------------
shall not be separately transferable [Unless Warrants are not detachable: before
-----------------------------------
________ __, ____ (the "Detachment Date")]].] [If Warrants are to be offered
-----------------------------
separately: Warrants shall be issued as a separate security and shall be
- -----------
transferable from and after the date of issuance.] [If Warrants are to be
---------------------
offered in Book-Entry form: [All] [A portion] of the Warrants shall initially
- ---------------------------
be represented by one or more Book-Entry certificates (each, a "Book-Entry
Warrant Certificate").] [If Securities and Warrants are to be offered together
-----------------------------------------------------
and in definitive form: Each Warrant Certificate included in such a unit shall
- -----------------------
evidence [_______] Warrants for each [_______] Securities included in such
unit.] [If Warrants are to be offered separately and in definitive form: Each
----------------------------------------------------------------
Warrant Certificate shall evidence [_______] Warrants.]
<PAGE>
SECTION 1.02. Form, Execution and Delivery of Warrant Certificates.
----------------------------------------------------
(a) One or more Warrant Certificates evidencing Warrants to purchase not
more than [____] Warrant Securities (except as provided in Sections 1.03, 1.04
and 2.03(e)) may be executed by the Company and delivered to the Warrant Agent
upon the execution of this Warrant Agreement or from time to time thereafter.
(b) Each Warrant Certificate, whenever issued, shall be in registered form
substantially in the form set forth in Exhibit A hereto, with such appropriate
---------
insertions, omissions, substitutions and other variations as are required or
permitted by this Agreement. [If Warrants are issued in Book-Entry form: Each
------------------------------------------
Book-Entry Warrant Certificate shall bear such legend or legends as may be
required by the Depository in order for it to accept the Warrants for its book-
entry settlement system.] Each Warrant Certificate shall be printed,
lithographed, typewritten, mimeographed or engraved or otherwise reproduced in
any other manner as may be approved by the officers executing the same (such
execution to be conclusive evidence of such approval) and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as the officers of the
Company executing the same may approve (such execution to be conclusive evidence
of such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto, or with any regulation of any stock exchange
on which the Warrants [If Securities and Warrants are to be offered together:,
------------------------------------------------------
the Securities] or the Warrant Securities may be listed, or to conform to usage.
Each Warrant Certificate shall be signed on behalf of the Company by its
Chairman of the Board, Chief Executive Officer, President, Chief Financial
Officer, Vice Chairman of the Board, Vice Chairman or any Vice President. The
signature of any such officer on any Warrant Certificate may be manual or
facsimile. Each Warrant Certificate, when so signed on behalf of the Company,
shall be delivered to the Warrant Agent together with an order for the
countersignature and delivery of such Warrants.
(c) The Warrant Agent shall, upon receipt of any Warrant Certificate duly
executed on behalf of the Company, countersign such Warrant Certificate and
deliver such Warrant Certificate to or upon the order of the Company. Each
Warrant Certificate shall be dated the date of its countersignature.
(d) No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby may be exercised, unless such Warrant Certificate has been countersigned
by the manual signature of the Warrant Agent. Such signature by the Warrant
Agent upon any Warrant Certificate executed by the Company shall be conclusive
evidence that such Warrant Certificate has been duly issued under the terms of
this Agreement.
(e) If any officer of the Company who has signed any Warrant Certificate
either manually or by facsimile signature shall cease to be such officer before
such Warrant Certificate shall have been countersigned and delivered by the
Warrant Agent, such Warrant Certificate nevertheless may be countersigned and
delivered as though the person who signed such Warrant Certificate had not
ceased to be such officer of the Company; and any Warrant Certificate may be
signed on behalf of the Company by such persons as, at the actual date of the
execution of such Warrant Certificate, shall be the proper officers of the
Company as specified in this Section 1.02, regardless of whether at the date of
the execution of this Agreement any such person was such officer.
-2-
<PAGE>
(f) The Holders shall [If Warrants are to be issued in Book-Entry form:,
------------------------------------------------
except as stated below with respect to Warrants evidenced by a Book-Entry
Warrant Certificate,] be entitled to receive Warrants in physical, certificated
form.
[If Warrants are to be issued in Book-Entry form: (g) A Holder shall not be
------------------------------------------------
entitled to receive Warrants in physical, certificated form unless (i) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Book-Entry Warrant Certificate or if at any time it has
ceased to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, and the Company does not appoint a successor within 90 days or
(ii) the Company at any time shall determine to have the Warrants represented by
definitive Warrant Certificates and shall execute and deliver to the Warrant
Agent a written order signed in the name of the Company by its Chairman of the
Board, Chief Executive Officer, President, Chief Financial Officer, Vice
Chairman of the Board, Vice Chairman or Vice President, stating that the Company
wishes to issue Warrants in definitive form in exchange for such Book-Entry
Warrant Certificate. In any such instance, and in accordance with the provisions
of this Agreement, each Holder shall be entitled to have registered in its name
the number of Warrants in definitive form equivalent to such Holder's beneficial
interest in such Book-Entry Warrant Certificate and shall receive physical
delivery of definitive Warrant Certificates representing such Warrants from the
Depositary.
(h) A Book-Entry Warrant Certificate may be exchanged for a new Book-Entry
Warrant Certificate, or one or more new Book-Entry Warrant Certificates may be
issued, to reflect the issuance by the Company of additional Warrants. To
effect such an exchange, the Company shall deliver to the Warrant Agent one or
more new Book-Entry Warrant Certificates duly executed on behalf of the Company
as provided in Section 1.02. The Warrant Agent shall authenticate each new
Book-Entry Warrant Certificate as provided in Section 1.02 and shall deliver
each new Book-Entry Warrant Certificate to the Depository. The Warrant Agent
shall cancel each Book-Entry Warrant Certificate delivered to it by the
Depository in exchange therefor, if any.]
SECTION 1.03. Transfer of Warrants.
--------------------
[If Warrants are to be issued in Book-Entry form: (a) [All] [A portion]
------------------------------------------------
of the Warrants shall initially be represented by one or more Book-Entry Warrant
Certificates deposited with [the Depository Trust Company] (the "Depository")
and registered in the name of [Cede & Co.], a nominee of the Depository. Except
as provided for in Section 1.03(b) hereof, no person acquiring Warrants with
book-entry settlement through the Depository shall receive or be entitled to
receive physical delivery of definitive Warrant Certificates evidencing such
Warrants. Ownership of beneficial interests in the Warrants shall be shown on,
and the transfer of such ownership shall be effected through, records maintained
by (i) the Depository or its nominee for each Book-Entry Warrant Certificate, or
(ii) institutions that have accounts with the Depository (such institution, with
respect to a Warrant in its account, a "Participant").]
[If Warrants are to be issued in Book-Entry form: (b) If the Depository
------------------------------------------------
subsequently ceases to make its book-entry settlement system available for the
Warrants, the Company may instruct the Warrant Agent regarding making other
arrangements for book-entry settlement. In the event that the Warrants are not
eligible for, or it is no longer necessary to have the Warrants available in,
book-entry form, the Warrant Agent shall provide written instructions to the
Depository to deliver to the Warrant Agent for cancellation each Book-Entry
Warrant Certificate, and the Company shall instruct the Warrant
-3-
<PAGE>
Agent to deliver to the Depository definitive Warrant Certificates in physical
form evidencing such Warrants. Such definitive Warrant Certificates shall be in
the form annexed hereto as Exhibit A with appropriate insertions, modifications
and omissions, as provided above.]
[If Securities and Warrants are to be offered together: (c) [If Warrants
------------------------------------------------------ -----------
are not immediately detachable: Prior to the Detachment Date,] Warrants may be
- -------------------------------
transferred or exchanged only together with the Security to which such Warrant
is attached, and only for the purpose of effecting, or in conjunction with, a
transfer or exchange of such Security. Furthermore, [If Warrants are not
-------------------
immediately detachable: on or prior to the Detachment Date,] each transfer of a
- -----------------------
Security on the register relating to such Securities shall operate also to
transfer the Warrants to which such Security was initially attached. [If
--
Warrants are not immediately detachable: From and after the Detachment Date, the
- ----------------------------------------
above provisions shall be of no further force and effect.]
(d) A Warrant Certificate may be transferred at the option of the Holder
thereof upon surrender of such Warrant Certificate at the corporate trust office
of the Warrant Agent, properly endorsed or accompanied by appropriate
instruments of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent [If Warrants are to be issued
----------------------------
in Book-Entry form:; provided, however, that except as otherwise provided
- ------------------- -------- -------
herein or in any Book-Entry Warrant Certificate, each Book-Entry Warrant
Certificate may be transferred only in whole and only to the Depository, to
another nominee of the Depository, to a successor depository, or to a nominee of
a successor depository]. Upon any such registration of transfer, the Company
shall execute, and the Warrant Agent shall countersign and deliver, as provided
in Section 1.02, in the name of the designated transferee a new Warrant
Certificate or Warrant Certificates of any authorized denomination evidencing in
the aggregate a like number of unexercised Warrants.
(e) [If Warrants are not immediately detachable: After the Detachment
-------------------------------------------
Date,] Upon surrender at the corporate office of the Warrant Agent, properly
endorsed or accompanied by appropriate instruments of transfer and written
instructions for such exchange, all in form satisfactory to the Company and the
Warrant Agent, one or more Warrant Certificates may be exchanged for one or more
Warrant Certificates in any other authorized denominations; provided that such
--------
new Warrant Certificate(s) evidence the same aggregate number of Warrants as the
Warrant Certificate(s) so surrendered. Upon any such surrender for exchange, the
Company shall execute, and the Warrant Agent shall countersign and deliver, as
provided in Section 1.02, in the name of the Holder of such Warrant
Certificates, the new Warrant Certificates.
(f) The Warrant Agent shall keep, at its corporate trust office, books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates in accordance with Section 1.02 and transfers,
exchanges, exercises and cancellations of outstanding Warrant Certificates.
Whenever any Warrant Certificates are surrendered for transfer or exchange in
accordance with this Section 1.03, an authorized officer of the Warrant Agent
shall manually countersign and deliver the Warrant Certificates which the Holder
making the transfer or exchange is entitled to receive.
(g) No service charge shall be made for any transfer or exchange of
Warrant Certificates, but the Company may require payment of a sum sufficient to
cover any stamp or other tax or other governmental charge that may be imposed in
connection with any such transfer or exchange.
-4-
<PAGE>
SECTION 1.04. Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
---------------------------------------------------------
Upon receipt by the Company and the Warrant Agent of evidence satisfactory to
them of the ownership of and the loss, theft, destruction or mutilation of any
Warrant Certificate and of indemnity satisfactory to them and, in the case of
mutilation, upon surrender of such Warrant Certificate to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser, the
Company shall execute, and an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of
the same tenor and for a like number of Warrants. No service charge shall be
made for any replacement of Warrant Certificates, but the Company may require
the payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange. To
the extent permitted under applicable law, the provisions of this Section 1.04
are exclusive with respect to the replacement of mutilated, lost, stolen or
destroyed Warrant Certificates and shall preclude any and all other rights or
remedies.
SECTION 1.05. Cancellation of Warrant Certificates. Any Warrant
------------------------------------
Certificate surrendered to the Warrant Agent for transfer, exchange or exercise
of the Warrants evidenced thereby shall be promptly canceled by the Warrant
Agent and shall not be reissued and, except as expressly permitted by this
Agreement, no Warrant Certificate shall be issued hereunder in lieu thereof. The
Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of canceled Warrant Certificates in a manner satisfactory to the
Company. Any Warrant Certificate surrendered to the Company for transfer,
exchange or exercise of the Warrants evidenced thereby shall be promptly
delivered to the Warrant Agent and such transfer, exchange or exercise shall not
be effective until such Warrant Certificate has been received by the Warrant
Agent.
SECTION 1.06. Treatment of Holders [If Warrants are to be issued in Book-
----------------------------------------------------------
Entry form: and Beneficial Owners] of Warrant Certificates. (a) The term
- ----------------------------------------------------------
"Holder", as used herein, shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose [If Warrants are not immediately detachable: or,
-------------------------------------------
prior to the Detachment Date, the person in whose name the Security to which
such Warrant Certificate was initially attached is registered upon the register
relating to such Securities. At all times prior to the Detachment Date, the
Company will, or will cause the registrar of the Securities to, make available
to the Warrant Agent such information as to holders of the Securities as may be
necessary to keep the Warrant Agent's records current]. [If Warrants are to be
---------------------
issued in Book-Entry form: The Holder of each Book-Entry Warrant Certificate
- --------------------------
shall initially be [___________], a nominee of the Depository.]
[If Warrants are to be issued in Book-Entry Form: (b) The term "Beneficial
------------------------------------------------
Owner" as used herein shall mean any person in whose name ownership of
beneficial interests in Warrants evidenced by a Book-Entry Warrant Certificate
is recorded in the records maintained by the Depository or its nominee, or by a
Participant [If Warrants are not immediately detachable: , or, prior to the
-------------------------------------------
Detachment Date, the person in whose name the Security to which such Warrant
Certificate was initially attached is registered upon the register relating to
such Securities].]
(c) Every Holder [If Warrants are to be issued in Book-Entry form: and
------------------------------------------------
every Beneficial Owner] consents and agrees with the Company, the Warrant Agent
and with every subsequent Holder [If Warrants are to be issued in Book-Entry
------------------------------------------
form: and Beneficial Owner] that until the Warrant Certificate is transferred on
- -----
the books of the Warrant Agent, the Company and the Warrant Agent may treat the
-5-
<PAGE>
registered Holder of such Warrant Certificate as the absolute owner of the
Warrants evidenced thereby for any purpose and as the person entitled to
exercise the rights attaching to the Warrants evidenced thereby, any notice to
the contrary notwithstanding.
ARTICLE II
EXERCISE PRICE, DURATION, EXERCISE AND CALL OF WARRANTS
SECTION 2.01. Exercise Price. The exercise price of each Warrant shall be
--------------
$________ (the "Exercise Price") [modify as appropriate to reflect terms of
offered Warrants].
SECTION 2.02. Duration of Warrants. [Subject to the limitations set forth
--------------------
herein,] Each Warrant may be exercised in whole but not in part [Unless Warrants
---------------
may be exercised on only one date: on any Business Day (as defined below)
- ----------------------------------
occurring during the period (the "Exercise Period") commencing on [its date of
issuance] [_________ __, ____] and ending at 5:00 P.M., New York time,] on
__________ __, ____ (the "Expiration Date"). Each Warrant remaining unexercised
after 5:00 P.M., New York time, on the Expiration Date shall become void, and
all rights of the Holder under this Agreement shall cease.
As used herein, the term "Business Day" means any day which is not a
Saturday or Sunday and is not a legal holiday or a day on which banking
institutions generally are authorized or obligated by law or regulation to close
in New York[ and __________].
SECTION 2.03. Exercise of Warrants.
--------------------
(a) A Holder may exercise a Warrant by delivering, not later than 5:00
P.M., New York time, on [Unless Warrants may be exercised on only one date: any
--------------------------------------------------
Business Day during the Exercise Period (the "Exercise Date")] [If Warrants may
---------------
be exercised on only one date: the Expiration Date] to the Warrant Agent at its
- ------------------------------
corporate trust department (i) the Warrant Certificate evidencing the Warrants
to be exercised, [If Warrants are to be issued in Book-Entry form: and, in the
------------------------------------------------
case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the
"Book-Entry Warrants") on the records of the Depository to an account of the
Warrant Agent at the Depository designated for such purpose in writing by the
Warrant Agent to the Depository from time to time,] (ii) an election to purchase
the Warrant Securities ("Election to Purchase"), [For definitive Warrant
----------------------
Certificates: properly completed and executed by the Holder on the reverse of
- -------------
the Warrant Certificate] [If Warrants are to be issued in Book-Entry form: or,
------------------------------------------------
in the case of a Book-Entry Warrant Certificate, properly executed by the
Participant and substantially in the form included on the reverse of each
Warrant Certificate,] and (iii) the Exercise Price for each Warrant to be
exercised in lawful money of the United States of America by a cashier's check
or by wire transfer in immediately available funds. If any of (a) the Warrant
Certificate [If Warrants are to be issued in Book-Entry form: or the Book-Entry
------------------------------------------------
Warrants,] (b) the Election to Purchase, or (c) the Exercise Price therefor, is
received by the Warrant Agent after 5:00 P.M., New York time, on [Unless
------
Warrants may be exercised on only one date: the specified Exercise Date, the
- -------------------------------------------
Warrants will be deemed to be received and exercised on the Business Day next
succeeding the Exercise Date. If the date specified as the Exercise Date is not
a Business Day, the Warrants will be deemed to be received and exercised on the
next succeeding day which is a Business Day. If the Warrants are received or
deemed to be received after] the Expiration Date, the exercise thereof will be
null and void and any funds delivered to the
-6-
<PAGE>
Warrant Agent will be returned to the Holder [If Warrants are to be issued in
--------------------------------
Book-Entry form: or Participant, as the case may be,] as soon as practicable. In
- ----------------
no event will interest accrue on funds deposited with the Warrant Agent in
respect of an exercise or attempted exercise of Warrants. The validity of any
exercise of Warrants will be determined by the Warrant Agent in its sole
discretion and such determination will be final and binding upon the Holder and
the Company. Neither the Company nor the Warrant Agent shall have any obligation
to inform a Holder of the invalidity of any exercise of Warrants. The Warrant
Agent shall deposit all funds received by it in payment of the Exercise Price in
the account of the Company maintained with the Warrant Agent for such purpose
and shall advise the Company by telephone at the end of each day on which funds
for the exercise of the Warrants are received of the amount so deposited to its
account. The Warrant Agent shall promptly confirm such telephonic advice to the
Company in writing.
(b) The Warrant Agent shall, by 11:00 A.M. on the Business Day following
the [Unless Warrants may be exercised on only one date: Exercise Date of any
--------------------------------------------------
Warrant] [If Warrants may be exercised on only one date: Expiration Date],
----------------------------------------------
advise the Company and the [Trustee under the Indenture applicable to] [the
transfer agent and registrar in respect of] the Warrant Securities issuable upon
such exercise as to the number of Warrants exercised in accordance with the
terms and conditions of this Agreement, the instructions of each Holder [If
--
Warrants are to be issued in Book-Entry form: or Participant, as the case may
- ---------------------------------------------
be,] with respect to delivery of the Warrant Securities issuable upon such
exercise, and the delivery of definitive Warrant Certificates [If Warrants are
---------------
to be issued in Book-Entry form: or one or more Book-Entry Warrant Certificates,
- --------------------------------
as appropriate,] evidencing the balance, if any, of the Warrants remaining after
such exercise, and such other information as the Company or such [Trustee]
[transfer agent and registrar] shall reasonably require.
(c) The Company shall, by 5:00 P.M., New York time, on the third Business
Day next succeeding the [Unless Warrants may be exercised on only one date:
-------------------------------------------------
Exercise Date of any Warrant] [If Warrants may be exercised on only one date:
---------------------------------------------
Expiration Date], execute, issue and deliver to the Warrant Agent, [pursuant to
the Indenture applicable to the Warrant Securities, the Warrant Securities, duly
authenticated by the Trustee of such Indenture and in authorized denominations]
[the Warrant Securities] to which such Holder is entitled, in fully registered
form, registered in such name or names as may be directed by such Holder [If
--
Warrants are to be issued in Book-Entry form: or the Participant, as the case
- ---------------------------------------------
may be]. Upon receipt of such Warrant Securities, the Warrant Agent shall, by
5:00 P.M., New York time, on the fifth Business Day next succeeding [Unless
------
Warrants may be exercised on only one date: such Exercise Date] [If Warrants may
- ------------------------------------------- ---------------
be exercised on only one date: the Expiration Date], transmit such Warrant
- ------------------------------
Securities, to or upon the order of the Holder [If Warrants are to be issued in
-------------------------------
Book-Entry form: or Participant, as the case may be,] together with, or preceded
- ----------------
by the prospectus referred to in Section 5.06 hereof. The Company agrees that
it will provide such information and documents to the Warrant Agent as may be
necessary for the Warrant Agent to fulfill its obligations hereunder.
(d) [reserved]
(e) Warrants may be exercised only in whole numbers of Warrants. [Unless
------
Warrants may be exercised on only one date: If fewer than all of the Warrants
- -------------------------------------------
evidenced by a Warrant Certificate are exercised, a new Warrant Certificate for
the number of Warrants remaining unexercised shall be executed by the Company
and countersigned by the Warrant Agent as provided in Section 1.02 hereof, and
delivered to the Holder at the address specified on the books of the Warrant
Agent or as otherwise specified by such Holder.]
-7-
<PAGE>
(f) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities; and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
Warrant Securities until such tax or other charge shall have been paid or it has
been established to the Company's satisfaction that no such tax or other charge
is due.
SECTION 2.04. Adjustment Under Certain Circumstances. The Exercise Price
---------------------------------------
and the number of Warrant Securities purchasable upon the exercise of each
Warrant shall be subject to adjustment [as shall be determined by the Warrant
Agent, which determination shall be final and binding upon the Holders and the
Company.] as follows:
(i) If the Company at any time after the date of this Agreement (1)
declares a stock dividend or other distribution on Securities payable in
shares, (2) subdivides the outstanding Common Stock or Preferred Stock (for
the purposes of this Section only, "Shares") or (3) combines outstanding
Shares into a smaller number of Shares, the Exercise Price to be in effect
after the time of the record date for such dividend or distribution or of
the effective date of such subdivision or combination shall be determined
by multiplying the Exercise Price in effect immediately prior to such time
by a fraction, the numerator of which shall be the number of Shares
outstanding immediately prior to such time and the denominator of which
shall be the number of Shares to be outstanding immediately after giving
effect to such dividend, distribution, subdivision or combination, in each
case excluding any Shares held in the treasury of the Company ("Treasury
Shares"). Such an adjustment shall be made successively whenever any event
listed above occurs.
(ii) If the Company fixes a record date for the issuance of rights or
warrants to all holders of Shares entitling them (for a period expiring
within __ days after such record date) to subscribe for or purchase Shares
(or securities convertible into Shares) at a price per Share (or having a
conversion price per share, if a security convertible into Shares) less
than the current market price per Share (as defined in subsection (iv)) on
such record date, the Exercise Price to be in effect after such record date
shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be
the number of Shares outstanding on such record date plus the number of
Shares which the aggregate offering price of the total number of Shares so
to be offered (or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price
(as defined in subsection (iv)) and the denominator of which shall be the
number of Shares outstanding on such record date plus the number of
additional Shares to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible). If
such subscription price may be paid in consideration, part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company.
Shares owned by or held for the account of the Company or any majority-
owned subsidiary of the Company shall not be deemed outstanding for the
purpose of any such computation. Such an adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued and to the extent they are issued
but expire unexercised, the Exercise Price shall again be adjusted to be
the Exercise Price that would then be in effect if such record date had not
been fixed.
-8-
<PAGE>
(iii) If the Company fixes a record date for the making of a
distribution to all holders of Shares (including any such distribution made
in connection with a consolidation or merger in which the Company is the
continuing corporation) of shares of its stock, evidences of its
indebtedness or assets (other than dividends or distributions in cash
payable out of consolidated earnings or earned surplus) or subscription
rights or warrants (excluding those referred to in subsection (ii), the
Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current
market price per Share (as defined in subsection (iv) on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company) of the portion of such shares, evidences of
indebtedness, assets, subscription rights or warrants applicable to one
Share, and the denominator of which shall be such current market price per
Share. Such an adjustment shall be made successively whenever such a record
date is fixed; and if such distribution is not so made, the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
(iv) For the purpose of any computation under subsections (ii) or
(iii), the current market price per Share on any record date shall be
deemed to be the average of the daily closing prices per share for the 30
consecutive NYSE trading days commencing 45 NYSE trading days before such
record date. For the purpose of all relevant provisions of this Agreement,
the closing price for each day shall be the last sale price regular way or,
in case no such sale takes place on such day, the average of the closing
bid and asked prices regular way, in either case on the NYSE, or, if the
Shares are not listed or admitted to trading on the NYSE, on the principal
national securities exchange on which the Shares are listed or admitted to
trading or, if the Shares are not listed or admitted to trading on any
national securities exchange, the average of the highest reported bid and
lowest reported asked prices as furnished by the National Association of
Securities Dealers, Inc. (the "NASD") through Nasdaq or a similar
organization if Nasdaq is no longer reporting such information (such
reported last sale price of, or such average of such bid and asked prices
for, the shares or any other securities is referred to herein as the
"Market Value" of the shares or such securities). If on any such trading
day the Shares are not quoted by any such organization, the current market
price of such Shares on such day, as determined by the Board of Directors
of the Company, shall be used.
(v) Not withstanding the foregoing, no adjustment in the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least one percent in such price; provided, however, that any
-------- -------
adjustments which by reason of this subsection (v) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 2.04 shall be made to the
nearest cent or to the nearest one-hundredth of a Share, as the case may
be.
(vi) If at any time, as a result of an adjustment made pursuant to
this Section 2.04, the holder of any Warrant thereafter exercised becomes
entitled to receive any shares of the Company other than Shares, thereafter
the number of such other shares so receivable upon exercise of any Warrant
shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Shares contained in this Section 2.04, and the provisions of this Section
2.04 and Sections 2.02, 2.03, 2.05, 5.08 and 5.14 with respect to the
Shares shall apply on like terms to any such other shares.
-9-
<PAGE>
(vii) In any case in which this Section 2.04 shall require that an
adjustment in the Exercise Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Warrant exercised after such
record date, the Shares and other capital stock of the Company, if any,
issuable upon such exercise over and above the Shares and other capital
stock of the Company, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; provided, however,
-------- -------
that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing, subject to the following proviso, such
holder's right to receive such additional Shares upon the occurrence of the
event requiring such adjustment and, provided further, to the extent such
event does not occur, the adjustment made in respect of such non-occurrence
shall be retroactive to such Record Date and affect all Warrants exercised
between such Record Date and the date of such non-occurrence.
(viii) Upon each adjustment of the Exercise Price pursuant to this
Section 2.04 each Warrant outstanding immediately prior to such adjustment
shall thereafter constitute the right to purchase, at the adjusted Exercise
Price per Share, an adjusted number of Shares determined (to the nearest
hundredth) by multiplying the number of Shares purchasable upon exercise of
a Warrant immediately prior to such adjustment by a fraction, the numerator
of which shall be the Exercise Price in effect immediately prior to such
adjustment and the denominator of which shall be the Exercise Price in
effect immediately after such adjustment; provided, however, that the
-------- -------
Company may elect, in substitution for the adjustment in the number of
Shares pursuant to this subsection (viii), to adjust the number of Warrants
pursuant to subsection (ix).
(ix) In substitution for any adjustment in the number of Shares
purchasable upon the exercise of a Warrant as provided in subsection
(viii), the Company may elect to adjust the number of Warrants so that each
Warrant outstanding after such adjustment in number of Warrants shall be
exercisable for one share. Each Warrant held of record immediately prior to
such adjustment of the number of Warrants shall become that number of
Warrants determined (to the nearest hundredth) by multiplying the number of
shares purchasable upon exercise of a Warrant immediately prior to such
adjustment by a fraction, the numerator of which shall be the Exercise
Price in effect immediately prior to such adjustment and the denominator of
which shall be the Exercise Price in effect immediately after such
adjustment. The Company shall make a public announcement (by news release
and by notice to any securities exchange on which the Warrants are then
listed) of its election to adjust the number of Warrants, indicating the
record date for the adjustment and, if known at the time, the amount of the
adjustment to be made in the number of Warrants. This record date may be
the date on which the Exercise Price is adjusted or any day thereafter, but
shall be at least 10 days later than the date of the public announcement.
Upon each adjustment of the number of Warrants pursuant to this subsection
(ix) the Company shall, as promptly as practicable, cause to be distributed
to holders of record of Warrant Certificates on such record date Warrant
Certificates evidencing the additional Warrants to which such holders shall
be entitled as a result of such adjustment or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Warrant Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof if
required by the Company in its sole discretion, new Warrant Certificates
evidencing all the Warrants to which such holders shall be entitled after
such adjustment. Warrant Certificates to be so distributed may, at the
option of the Company, bear
-10-
<PAGE>
the adjusted Exercise Price and shall be registered in the names of the
holders of record of Warrant Certificates on the record date specified in
the public announcement.
(x) In the case of any reclassification or change of outstanding
Shares (other than a change in par value, if any, as a result of a
subdivision or combination), or in case of any consolidation of the Company
with any other corporation or any merger of the Company into another
corporation or of another corporation into the Company (other than a
consolidation or merger in which the Company is the continuing corporation
and which does not result in any such reclassification or change of
outstanding Shares, but including a consolidation or merger in which the
Company is the continuing corporation and in which all or a majority of the
Shares outstanding immediately prior to such consolidation (excluding
Treasury Shares) or merger are converted into, or converted into the right
to receive, consideration other than capital stock), or in case of any sale
of the properties and assets of the Company as, or substantially as, an
entirety to any other person or entity, each Warrant shall, after such
reclassification or change of Shares, consolidation, merger or sale, be
exercisable at the then Exercise Price and upon the other terms and
conditions specified in this Agreement for the number of shares of stock or
other securities or assets (which may be cash) to which a holder of the
number of Shares purchasable (at the time of such reclassification or
change of Shares, consolidation, merger or sale) upon the exercise of such
Warrant would have been entitled (other than pursuant to any applicable
dissenters rights of appraisal) upon such reclassification or change of
Shares, consolidation, merger or sale; and in any such case, the provisions
set forth in this Section 2.04 with respect to the rights and interests
thereafter of the holders of the Warrants shall be appropriately adjusted
so as to be applicable, as nearly as may reasonably be, to any shares of
stock, other securities or property thereafter deliverable on the exercise
of the Warrants. The Company shall not effect any such consolidation,
merger or sale unless, prior to or simultaneously with the consummation
thereof, the successor person or entity (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing
such assets or other appropriate person or entity shall assume, by written
instrument executed and delivered to the Warrant Agent, the obligation to
deliver to the holder of each Warrant such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holders are
entitled to receive and to assume the other obligations of the Company
under this Warrant Agreement. [Notwithstanding the foregoing, in the event
of any such consolidation, merger or sale in which holders of the Company's
Common Stock within two years of the date of this Agreement receive any
consideration other than common stock or rights, options or warrants to
acquire common stock, the holder of each Warrant so electing in a writing
filed with the Company prior thereto, shall be entitled to receive cash,
simultaneously with the consummation of such transaction, in an amount
equal to the average closing price of the Warrant (as determined in the
same manner as the average closing price per share is determined in the
second and third sentences of subsection (iv) for the 20 NYSE trading days
immediately preceding the public announcement of such merger, consolidation
or sale.]
(xi) Except as provided in this Section 2.04, no adjustment in
respect of any dividends on the Shares shall be made during the term of a
Warrant or upon the exercise of a Warrant.
(xii) Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants,
Warrant Certificates theretofore or
-11-
<PAGE>
thereafter issued may continue to express the same Exercise Price per share
and number and kind of shares as are stated on the Warrant Certificates
initially issuable pursuant to this Agreement.
(xiii) Anything in this Section 2.04 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Exercise Price
or increase in the number of shares purchasable upon the exercise of each
Warrant, in addition to those adjustments required by this Section 2.04, as
it in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Shares, or any issuance wholly for cash
of any Shares at less than the current market price, or any issuance wholly
for cash of Shares or securities which by their terms are convertible into
or exchangeable for Shares, or any stock dividend, or any issuance of
rights, options or warrants referred to above in this Section 2.04, made by
the Company to its common shareholders shall not be taxable to them.
(xiv) Anything in this Section 2.04 to the contrary notwithstanding,
the issuance of shares, or the granting of options to purchase shares, by
the Company or its subsidiaries to any of their employees under their
employee benefit, compensation or incentive plans, as well as the issuance
of shares under any dividend reinvestment plan of the Company, are not to
be taken into consideration for adjustments under this Section 2.04.
SECTION 2.05. Call of the Warrants. If the closing price per share for
--------------------
the Shares (determined as provided in the second sentence of Section 2.04(iv))
is greater than ___% of the Exercise Price (as defined below) then in effect for
any ___ NYSE trading days within a period of __ consecutive NYSE trading days,
the Company may elect, by written notice given within __ days after the end of
such __-day period, to redeem the Warrants, at a price of $_________ per
Warrant, on a date not less than __ days after the giving of such notice (which
date shall not be prior to _________, _________) (such date is referred to below
as the "Warrant Call Date"). The notice of the Warrant Call Date shall be given
to the Warrant Agent as provided in Section _______ and copies of such notice
shall be mailed to the registered holders of the Warrant Certificates as
provided in Section 5.04. If there is not at any relevant time a NYSE, then
business days rather than trading days on the NYSE will be used in the foregoing
provisions.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
[If Warrants are to be issued in Book-Entry Form:
------------------------------------------------
AND BENEFICIAL OWNERS] OF WARRANTS
SECTION 3.01. No Rights as Holders of Warrant Securities Conferred by
-------------------------------------------------------
Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced
- --------------------------------
thereby shall entitle the Holder thereof to any of the rights of a holder of any
Warrant Securities.
SECTION 3.02. Holder [If Warrants are to be issued in Book-Entry
--------------------------------------------------
form: and Beneficial Owner] of Warrant May Enforce Rights. Notwithstanding any
- ---------------------------------------------------------
of the provisions of this Agreement, any Holder [If Warrants are to be issued in
-------------------------------
Book-Entry form: and any Beneficial Owner] of any Warrant,
- ----------------
-12-
<PAGE>
without the consent of the Warrant Agent or the Holder of any Warrant, may, on
such Holder's [If Warrants are to be issued in Book-Entry form: or Beneficial
------------------------------------------------
Owner's] own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise in respect of, such Holder's [If Warrants are to be issued in Book-
-------------------------------------
Entry form: or Beneficial Owner's] right to exercise the Warrants evidenced by
- -----------
any Warrant Certificate in the manner provided in this Agreement and such
Warrant Certificate.
ARTICLE IV
CONCERNING THE WARRANT AGENT
SECTION 4.01. Warrant Agent. The Company hereby appoints [Name of
-------------
Warrant Agent] as Warrant Agent of the Company in respect of the Warrants upon
the terms and subject to the conditions herein set forth, and [Name of Warrant
Agent] hereby accepts such appointment. The Warrant Agent shall have the powers
and authority granted to and conferred upon it hereby and such further powers
and authority to act on behalf of the Company as the Company may hereafter grant
to or confer upon it.
SECTION 4.02. Limitations on Warrant Agent's Obligations. The Warrant
------------------------------------------
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the Holders from time to time shall be subject:
(a) Compensation and Indemnification. The Company agrees to pay the
--------------------------------
Warrant Agent compensation to be agreed upon with the Company for all
services rendered by the Warrant Agent and to reimburse the Warrant Agent
for all reasonable out-of-pocket expenses (including reasonable counsel
fees) incurred by the Warrant Agent in connection with the services
rendered by it hereunder. The Company also agrees to indemnify the Warrant
Agent for, and to hold it harmless against, any loss, liability or expense
incurred without negligence, bad faith or breach of this Agreement on the
part of the Warrant Agent, arising out of or in connection with its acting
as Warrant Agent hereunder.
(b) Agent for the Company. In acting in the capacity of Warrant
---------------------
Agent under this Agreement, the Warrant Agent is acting solely as agent of
the Company and does not assume any obligation or relationship of agency or
trust with any of the owners or holders of the Warrants except as expressly
set forth herein.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory
-------
to it (which may be counsel to the Company), and the advice of such counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur
---------
no liability for or in respect of any action taken or thing suffered by it
in reliance upon any notice, direction, consent, certificate, affidavit,
statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.
-13-
<PAGE>
(e) Certain Transactions. The Warrant Agent, and its officers,
--------------------
directors and employees, may become the owner of, or acquire any interest
in, any Warrant, with the same rights that it or they would have were it
not the Warrant Agent hereunder, and, to the extent permitted by applicable
law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as a depositary, trustee or
agent for, any committee or body of holders of Warrants [If Securities and
-----------------
Warrants are to be offered together:, Securities] or Warrant Securities,
------------------------------------
or other securities or obligations of the Company as freely as if it were
not the Warrant Agent hereunder. Nothing in this Agreement shall be deemed
to prevent the Warrant Agent from acting as trustee under either Indenture.
(f) No Liability for Interest. The Warrant Agent shall not be under
-------------------------
any liability for interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement.
(g) No Liability for Invalidity. The Warrant Agent shall not be
---------------------------
under any responsibility with respect to the validity or sufficiency of
this Agreement or the execution and delivery hereof (except the due
execution and delivery hereof by the Warrant Agent) or with respect to the
validity or execution of the Warrant Certificates (except its
countersignature thereon).
(h) No Responsibility for Recitals. The recitals contained herein
------------------------------
and in the Warrant Certificates (except as to the Warrant Agent's
countersignature thereon) shall be taken as the statements of the Company
and the Warrant Agent assumes no responsibility hereby for the correctness
of the same.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
----------------------
perform such duties as are specifically set forth herein and no implied
duties or obligations shall be read into this Agreement against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any
action hereunder which may tend to involve it in any expense or liability,
the payment of which within a reasonable time is not, in its opinion,
assured to it. The Warrant Agent shall not be accountable or under any duty
or responsibility for the use by the Company of any Warrant Certificate
authenticated by the Warrant Agent and delivered by it to the Company
pursuant to this Agreement or for the application by the Company of the
proceeds of the issue and sale, or exercise, of the Warrants. The Warrant
Agent shall have no duty or responsibility in case of any default by the
Company in the performance of its covenants or agreements contained herein
or in any Warrant Certificate or in the case of the receipt of any written
demand from a Holder with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or,
except as provided in Section 5.03 hereof, to make any demand upon the
Company.
SECTION 4.03. Compliance With Applicable Laws. The Warrant Agent
-------------------------------
agrees to comply with all applicable federal and state laws imposing obligations
on it in respect of the services rendered by it under this Agreement and in
connection with the Warrants, including (but not limited to) the provisions of
United States federal income tax laws regarding information reporting and backup
withholding. The Warrant Agent expressly assumes all liability for its failure
to comply with any such laws imposing obligations on it, including (but not
limited to) any liability for its failure to comply with
-14-
<PAGE>
any applicable provisions of United States federal income tax laws regarding
information reporting and backup withholding.
SECTION 4.04. Resignation and Appointment of Successor.
----------------------------------------
(a) The Company agrees, for the benefit of the Holders from time to
time, that there shall at all times be a Warrant Agent hereunder until all the
Warrants issued hereunder have been exercised or have expired in accordance with
their terms, which Warrant Agent shall be a bank or trust company organized
under the laws of the United States of America or one of the states thereof,
which is authorized under the laws of the jurisdiction of its organization to
exercise corporate trust powers, has a combined capital and surplus of at least
$50,000,000 and has an office or an agent's office in the United States of
America.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which it desires such resignation to become effective; provided that such
--------
date shall not be less than three months after the date on which such notice is
given, unless the Company agrees to accept such notice less than three months
prior to such date of effectiveness. The Company may remove the Warrant Agent
at any time by giving written notice to the Warrant Agent of such removal,
specifying the date on which it desires such removal to become effective. Such
resignation or removal shall take effect upon the appointment by the Company, as
hereinafter provided, of a successor Warrant Agent (which shall be a bank or
trust company qualified as set forth in Section 4.04(a)) and the acceptance of
such appointment by such successor Warrant Agent. The obligation of the Company
under Section 4.02(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Warrant Agent.
(c) If at any time the Warrant Agent shall resign, or shall cease to
be qualified as set forth in Section 4.04(a), or shall be removed, or shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or
shall file a petition seeking relief under any applicable Federal or State
bankruptcy or insolvency law or similar law, or make an assignment for the
benefit of its creditors or consent to the appointment of a receiver,
conservator or custodian of all or any substantial part of its property, or
shall admit in writing its inability to pay or to meet its debts as they mature,
or if a receiver or custodian of it or of all or any substantial part of its
property shall be appointed, or if an order of any court shall be entered for
relief against it under the provisions of any applicable Federal or State
bankruptcy or similar law, or if any public officer shall have taken charge or
control of the Warrant Agent or of its property or affairs, for the purpose of
rehabilitation, conservation or liquidation, a successor Warrant Agent,
qualified as set forth in Section 4.04(a), shall be appointed by the Company by
an instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as herein provided of a successor Warrant Agent and acceptance by
the latter of such appointment, the Warrant Agent so superseded shall cease to
be Warrant Agent under this Agreement.
(d) Any successor Warrant Agent appointed under this Agreement shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent under
this Agreement, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Warrant Agent shall be entitled to receive,
-15-
<PAGE>
all monies, securities and other property on deposit with or held by such
predecessor, as Warrant Agent under this Agreement.
(e) Any corporation into which the Warrant Agent may be merged or
converted or any corporation with which the Warrant Agent may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Warrant Agent shall be a party, or any corporation to which the
Warrant Agent shall sell or otherwise transfer all or substantially all the
assets and business of the Warrant Agent, in each case provided that it shall be
qualified as set forth in Section 4.04(a), shall be the successor Warrant Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement, including, without
limitation, any successor to the Warrant Agent first named above.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendments.
----------
(a) This Agreement and any Warrant Certificate may be amended by the
parties hereto by executing a supplemental warrant agreement (a "Supplemental
Agreement"), without the consent of the Holder of any Warrant, for the purpose
of (i) curing any ambiguity, or curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement that is not
inconsistent with the provisions of this Agreement or the Warrant Certificates,
(ii) evidencing the succession of another corporation to the Company and the
assumption by any such successor of the covenants of the Company contained in
this Warrant Agreement and the Warrants, (iii) evidencing and providing for the
acceptance of appointment by a successor Warrant Agent with respect to the
Warrants, [If Warrants are to be issued in Book-Entry form: (iv) evidencing and
------------------------------------------------
providing for the acceptance of appointment by a successor Depository with
respect to each Book-Entry Warrant Certificate, (v) issuing definitive Warrant
Certificates in accordance with paragraph (b) of Section 1.03,] (vi) adding to
the covenants of the Company for the benefit of the Holders or surrendering any
right or power conferred upon the Company under this Agreement, (vii) appointing
a successor Warrant Agent, or (viii) amending this Agreement and the Warrants in
any manner that the Company may deem to be necessary or desirable and that will
not adversely affect the interests of the Holders in any material respect.
(b) The Company and the Warrant Agent may amend this Agreement and
the Warrants by executing a Supplemental Agreement with the consent of the
Holders of not fewer than a majority of the unexercised Warrants affected by
such amendment, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the Holders under this Agreement; provided, however,
-------- -------
that, without the consent of each Holder of Warrants affected thereby, no such
amendment may be made that (i) changes the Warrants so as to reduce the number
of Warrant Securities purchasable upon exercise of the Warrants or so as to
increase the exercise price (other than as provided by Section 2.04), (ii)
shortens the period of time during which the Warrants may be exercised, (iii)
otherwise adversely affects the exercise rights of the Holders in any material
respect, or (iv) reduces the number of unexercised Warrants the consent of the
Holders of which is required for amendment of this Agreement or the Warrants.
-16-
<PAGE>
SECTION 5.02. Merger, Consolidation, Sale, Transfer or Conveyance.
---------------------------------------------------
The Company may consolidate or merge with or into any other corporation,
partnership or trust or sell, lease, transfer or convey all or substantially all
of its assets to any other corporation, partnership or trust, provided that (i)
--------
either (x) the Company is the continuing entity or (y) the entity (if other than
the Company) that is formed by or results from any such consolidation or merger
or that receives such assets is organized and existing under the laws of the
United States of America or a state thereof and such entity assumes the
obligations of the Company with respect to the performance and observance of all
of the covenants and conditions of this Agreement to be performed or observed by
the Company and (ii) the Company or such successor, as the case may be, must not
immediately be in default under this Agreement. If at any time there shall be
any consolidation or merger or any sale, lease, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company, then in
any such event the successor or assuming entity shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
and in the Warrant Certificates as the Company; the Company shall thereupon be
relieved of any further obligation hereunder or under the Warrants, and, in the
event of any such sale, lease, transfer, conveyance (other than by way of lease)
or other disposition, the Company as the predecessor corporation may thereupon
or at any time thereafter be dissolved, wound up or liquidated. Such successor
or assuming corporation thereupon may cause to be signed, and may issue either
in its own name or in the name of the Company, Warrant Certificates evidencing
the Warrants not theretofore exercised, in exchange and substitution for the
Warrant Certificates theretofore issued. Such Warrant Certificates shall in all
respects have the same legal rank and benefit under this Agreement as the
Warrant Certificates evidencing the Warrants theretofore issued in accordance
with the terms of this Agreement as though such new Warrant Certificates had
been issued at the date of the execution hereof. In any case of any such merger
or consolidation or sale, lease, transfer, conveyance or other disposition of
all or substantially all of the assets of the Company, such changes in
phraseology and form (but not in substance) may be made in the new Warrant
Certificates, as may be appropriate.
SECTION 5.03. Notices and Demands to the Company and Warrant Agent.
----------------------------------------------------
If the Warrant Agent shall receive any notice or demand addressed to the Company
by the Holder [If Warrants are to be issued in Book-Entry form: or a
------------------------------------------------
Participant, as the case may be], the Warrant Agent shall promptly forward such
notice or demand to the Company.
SECTION 5.04. Addresses. Any communications from the Company to the
---------
Warrant Agent with respect to this Agreement shall be addressed to
____________________, Attention: ________________________, and any
communications from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Brookdale Living Communities, Inc., 77 West
Wacker Drive, Chicago, Illinois 60601, Attention: _____________ (or such other
address as shall be specified in writing by the Warrant Agent or by the Company,
as the case may be). The Company or the Warrant Agent shall give notice to the
Holders of Warrants by mailing written notice by first class mail, postage
prepaid, to such Holders as their names and addresses appear in the books and
records of the Warrant Agent [or, prior to the Detachment Date, on the register
of the Securities].
SECTION 5.05. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT
-------------
CERTIFICATE AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND
THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REFERENCE TO APPLICABLE CONFLICTS OF LAW PROVISIONS).
-17-
<PAGE>
SECTION 5.06. Delivery of Prospectus. The Company shall furnish to
----------------------
the Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants and complying in all material
respects with the Securities Act of 1933, as amended (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
shall deliver a Prospectus to the Holder of such Warrant, prior to or
concurrently with the delivery of the Warrant Securities issued upon such
exercise.
SECTION 5.07. Obtaining of Governmental Approvals. The Company shall
-----------------------------------
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under United States Federal and
state laws, which the Company may deem necessary or appropriate in connection
with the issuance, sale, transfer and delivery of the Warrants, the exercise of
the Warrants, the issuance, sale, transfer and delivery of the Warrant
Securities to be issued upon exercise of Warrants or upon the expiration of the
period during which the Warrants are exercisable.
SECTION 5.08. Payment of Taxes. The Company will pay all stamp and
----------------
other duties, if any, to which, under the laws of the United States of America,
this Agreement or the original issuance of the Warrants may be subject.
SECTION 5.09. Benefits of Warrant Agreement. Nothing in this
-----------------------------
Agreement or any Warrant Certificate expressed or implied and nothing that may
be inferred from any of the provisions hereof or thereof is intended, or shall
be construed, to confer upon, or give to, any person or corporation other than
the Company, the Warrant Agent and their respective successors and assigns, [If
--
Warrants are to be issued in Book-Entry form: the Beneficial Owners] and the
- ---------------------------------------------
Holders any right, remedy or claim under or by reason of this Agreement or any
Warrant Certificate or of any covenant, condition, stipulation, promise or
agreement hereof or thereof; and all covenants, conditions, stipulations,
promises and agreements contained in this Agreement or any Warrant Certificate
shall be for the sole and exclusive benefit of the Company and the Warrant Agent
and their respective successors and assigns and of the [If Warrants are to be
---------------------
issued in Book-Entry form: Beneficial Owners and] Holders.
- --------------------------
SECTION 5.10. Headings. The descriptive headings of the several
--------
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
SECTION 5.11. Severability. If any provision in this Agreement or in
------------
any Warrant Certificate shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions, or of such provisions in any other jurisdiction, shall not in any
way be affected or impaired thereby.
SECTION 5.12. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 5.13. Inspection of Agreement. A copy of this Agreement
-----------------------
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent and at the office of the Company at 77 West Wacker
Drive, Chicago, Illinois 60601, for inspection by any Holder. The
-18-
<PAGE>
Warrant Agent may require any such Holder to submit satisfactory proof of
ownership for inspection by it.
SECTION 5.14. Board of Director Action; No Liability of Directors,
----------------------------------------------------
Officers, Employees or Shareholders.
- ------------------------------------
(a) Any determination that may be made by the Board of Directors of
the Company under this Agreement may be made by a duly authorized committee of
the Board or, to the extent permitted by applicable corporate law, by an
individual acting pursuant to authority granted by the Board of Directors.
(b) No director, officer, employee or shareholder of the Company, as
such, shall have any liability under this Agreement or the Warrants. By
accepting the Warrants, each holder of Warrants agrees to the foregoing and
waives and releases all such liability.
SECTION 5.15. Warrant Holders Not Shareholders. Nothing contained in
--------------------------------
this Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the holders thereof, as such, the right to vote or receive
dividends or notices as shareholders of the Company in respect of any meeting of
shareholders for the election of directors of the Company or any other matter to
vote at any such meeting, to exercise any rights whatsoever as shareholders of
the Company or to be deemed for any purpose the holder of Shares or of any other
securities of the Company that may at any time be issuable on the exercise or
conversion of the Warrant Certificates, nor shall anything contained herein or
in the Warrant Certificates be construed to confer upon the holders thereof, as
such, any of the other rights of a shareholder of the Company.
-19-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By: _________________________
Authorized Officer
[WARRANT AGENT]
By: _________________________
Authorized Officer
-20-
<PAGE>
EXHIBIT A
---------
[FORM OF WARRANT CERTIFICATE]
[Form of legend if Securities with Warrants that are not immediately detachable
- -------------------------------------------------------------------------------
or Warrants that are not immediately exercisable are offered: [PRIOR TO
- -------------------------------------------------------------
_______________,] THIS WARRANT CERTIFICATE [(i) CANNOT BE TRANSFERRED OR
EXCHANGED UNLESS ATTACHED TO A [TITLE OF SECURITY] AND (II)] CANNOT BE EXERCISED
IN WHOLE OR IN PART.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN.
Warrant Certificate evidencing
Warrants to Purchase
Common Stock
as described herein.
BROOKDALE LIVING COMMUNITIES, INC.
No. ___________ CUSIP No. _____________
VOID AFTER [5:00 P.M.], NEW YORK TIME, ON _______ __, ___
This certifies that ________________________ or registered assigns is
the registered holder of [insert number initially issued] warrants to purchase
certain securities (the "Warrants"). Each Warrant entitles the holder thereof,
subject to the provisions contained herein and in the Warrant Agreement referred
to below, to purchase from Brookdale Living Communities, Inc., a Delaware
corporation (the "Company"), [______] of the Company's Common Stock (the
"Warrant Securities"), at the Exercise Price set forth below. The exercise price
of each Warrant (the "Exercise Price") shall be [modify as appropriate to
reflect the terms of the offered Warrants].
Subject to the terms of the Warrant Agreement, each Warrant evidenced
hereby may be exercised in whole but not in part at any time, as specified
herein, [Unless Warrants may be exercised on only one date: on any Business Day
--------------------------------------------------
(as defined below) occurring during the period (the "Exercise Period")
commencing on [the date of issuance thereof] [________________ __, ____] and
ending at 5:00 P.M., New York time,] on ____________ __, ____ (the "Expiration
Date"). Each Warrant remaining unexercised after 5:00 P.M., New York time, on
the Expiration Date shall become void, and all rights of the holder of this
Warrant Certificate evidencing such Warrant shall cease.
The holder of the Warrants represented by this Warrant Certificate may
exercise any Warrant evidenced hereby by delivering, not later than 5:00 P.M.,
New York time, on [Unless Warrants may be exercised on only one date: any
--------------------------------------------------
Business Day during the Exercise Period (the "Exercise Date")]
A-1
<PAGE>
[If Warrants may be exercised on only one date: the Expiration Date] to
- ----------------------------------------------
[name of Warrant Agent] (the "Warrant Agent", which term includes any successor
warrant agent under the Warrant Agreement described below) at its corporate
trust department at ___________________, (i) this Warrant Certificate [For Book-
--------
Entry Warrant Certificate: and the Warrants to be exercised (the "Book-Entry
- --------------------------
Warrants") free on the records of [The Depository Trust Company] (the
"Depository") to an account of the Warrant Agent at the Depository designated
for such purpose in writing by the Warrant Agent to the Depository], (ii) an
election to purchase ("Election to Purchase"), [For definitive Warrant
----------------------
Certificates: properly executed by the holder hereof on the reverse of this
- -------------
Warrant Certificate] [For Book-Entry Warrant Certificates: properly executed by
------------------------------------
the institution in whose account the Warrant is recorded on the records of the
Depository (the "Participant"), and substantially in the form included on the
reverse of hereof] and (iii) the Exercise Price for each Warrant to be exercised
in lawful money of the United States of America by certified or official bank
check or by bank wire transfer in immediately available funds. If any of (a)
this Warrant Certificate [For Book-Entry Warrant Certificates: or the Book-Entry
------------------------------------
Warrants], (b) the Election to Purchase, or (c) the Exercise Price therefor, is
received by the Warrant Agent after 5:00 P.M., New York time, on [Unless
------
Warrants may be exercised on only one date: the specified Exercise Date, the
- -------------------------------------------
Warrants will be deemed to be received and exercised on the Business Day next
succeeding the Exercise Date. If the date specified as the Exercise Date is not
a Business Day, the Warrants will be deemed to be received and exercised on the
next succeeding day which is a Business Day. If the Warrants to be exercised are
received or deemed to be received after] the Expiration Date, the exercise
thereof will be null and void and any funds delivered to the Warrant Agent will
be returned to the holder as soon as practicable. In no event will interest
accrue on funds deposited with the Warrant Agent in respect of an exercise or
attempted exercise of Warrants. The validity of any exercise of Warrants will
be determined by the Warrant Agent in its sole discretion and such determination
will be final and binding upon the holder of the Warrants and the Company.
Neither the Warrant Agent nor the Company shall have any obligation to inform a
holder of Warrants of the invalidity of any exercise of Warrants. As used
herein, the term "Business Day" means any day which is not a Saturday or Sunday
and is not a legal holiday or a day on which banking institutions generally are
authorized or obligated by law or regulation to close in New York [or
___________].
Warrants may be exercised only in whole numbers of Warrants. [Unless
------
Warrants may be exercised on only one date: If fewer than all of the Warrants
- -------------------------------------------
evidenced by this Warrant Certificate are exercised, a new Warrant Certificate
for the number of Warrants remaining unexercised shall be executed by the
Company and countersigned by the Warrant Agent as provided in Section 1.02 of
the Warrant Agreement, and delivered to the holder of this Warrant Certificate
at the address specified on the books of the Warrant Agent or as otherwise
specified by such registered holder.]
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement, dated as of ___________ __, ____ (the "Warrant Agreement"),
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate [For Book-Entry Warrant
----------------------
Certificate: and the beneficial owners of the Warrants represented by this
- ------------
Warrant Certificate] consent[s] by acceptance hereof. Copies of the Warrant
Agreement are on file and can be inspected at the above-mentioned office of the
Warrant Agent and at the office of the Company at 77 West Wacker Drive, Chicago,
Illinois 60601.
The Exercise Price and the number of Warrant Securities purchasable
upon the exercise of each Warrant shall be subject to adjustment [as shall be
determined by the Warrant Agent, which
A-2
<PAGE>
determination shall be final and binding upon the holders of the Warrants and
the Company][as provided pursuant to Section 2.04 of the Warrant Agreement].
[If Securities and Warrants are to be offered together: [If Warrants
------------------------------------------------------ -----------
are not immediately detachable: Prior to the Detachment Date,] The Warrants
- -------------------------------
represented by this Warrant Certificate may be exchanged or transferred only
together with the [title of Security] (the "Security") to which the Warrants are
attached, and only for the purpose of effecting, or in conjunction with, an
exchange or transfer of such Security. Additionally, [If Warrants are not
-------------------
immediately detachable: on or prior to the Detachment Date,] each transfer of
- -----------------------
such Security on the register of the Securities shall operate also to transfer
the Warrants to which such Securities was initially attached. [If Warrants are
---------------
not immediately detachable: From and after the Detachment Date, the above
- ---------------------------
provisions shall be of no further force and effect.]] Upon due presentment for
registration of transfer or exchange of this Warrant Certificate at the
corporate trust office of the Warrant Agent, the Company shall execute, and the
Warrant Agent shall countersign and deliver, as provided in Section 1.02 of the
Warrant Agreement, in the name of the designated transferee one or more new
Warrant Certificates of any authorized denomination evidencing in the aggregate
a like number of unexercised Warrants, subject to the limitations provided in
the Warrant Agreement.
Neither this Warrant Certificate nor the Warrants evidenced hereby
shall entitle the holder hereof or thereof to any of the rights of a holder of
the Warrant Securities.
The Warrant Agreement and this Warrant Certificate may be amended as
provided in the Warrant Agreement including, under certain circumstances
described therein, without the consent of the holder of this Warrant Certificate
or the Warrants evidenced thereby.
THIS WARRANT CERTIFICATE AND ALL RIGHTS HEREUNDER AND UNDER THE
WARRANT AGREEMENT AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO APPLICABLE CONFLICTS OF LAW PROVISIONS).
This Warrant Certificate shall not be entitled to any benefit under
the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant
evidenced hereby may be exercised, unless this Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated as of ________ __, ____
BROOKDALE LIVING COMMUNITIES, INC.
By: ______________________________
Authorized Officer
[NAME OF WARRANT AGENT],
as Warrant Agent
By: ________________________
Authorized Officer
A-4
<PAGE>
[REVERSE]
Instructions for Exercise of Warrant
------------------------------------
To exercise the Warrants evidenced hereby, the holder [For Book-Entry
--------------
Warrant Certificate: or Participant] must, by 5:00 P.M., New York time, on the
- --------------------
specified Exercise Date, deliver to the Warrant Agent at its corporate trust
department, a certified or official bank check or a wire transfer in immediately
available funds, in each case payable to the Warrant Agent at Account No. ____,
in an amount equal to the Exercise Price in full for the Warrants exercised. In
addition, the Warrant holder [For Book-Entry Warrant Certificates: or
------------------------------------
Participant] must provide the information required below and deliver this
Warrant Certificate to the Warrant Agent at the address set forth below [For
---
Book-Entry Warrant Certificates: and the Book-Entry Warrants to the Warrant
- --------------------------------
Agent in its account with the Depository designated for such purpose]. This
Warrant Certificate and the Election to Purchase must be received by the Warrant
Agent by 5:00 P.M., New York time, on the specified Exercise Date.
ELECTION TO PURCHASE
TO BE EXECUTED IF WARRANT HOLDER DESIRES
TO EXERCISE THE WARRANTS EVIDENCED HEREBY
The undersigned hereby irrevocably elects to exercise, on __________,
____ (the "Exercise Date"), _____________ Warrants, evidenced by this Warrant
Certificate, to purchase, [_________________] of the Common Stock (the "Warrant
Securities") of Brookdale Living Communities, Inc., a Delaware corporation (the
"Company"), and represents that on or before the Exercise Date such holder has
tendered payment for such Warrant Securities by certified or official bank check
or bank wire transfer in immediately available funds to the order of the Company
c/o [Name and address of Warrant Agent], in the amount of $_____________ in
accordance with the terms hereof. The undersigned requests that said number of
Warrant Securities be in fully registered form, in the authorized denominations,
registered in such names and delivered, all as specified in accordance with the
instructions set forth below.
[Unless Warrants may be exercised on only one date: If said number of
--------------------------------------------------
Warrant Securities is less than all of the Warrant Securities purchasable
hereunder, the undersigned requests that
A-5
<PAGE>
a new Warrant Certificate evidencing the remaining balance of the Warrants
evidenced hereby be issued and delivered to the holder of the Warrant
Certificate unless otherwise specified in the instructions below.]
Dated: ______________ __, ____
Name__________________________
__________________________ (Please Print)
/ / / /- / / /- / / / / /
- ------------------------
(Insert Social Security
or Other Identifying
Number of Holder) Address_______________________
_______________________
Signature_____________________
This Warrant may only be exercised by presentation to the Warrant Agent at one
of the following locations:
By hand at
By mail at
The method of delivery of this Warrant Certificate is at the option and risk of
- -------------------------------------------------------------------------------
the exercising holder and the delivery of this Warrant Certificate will be
- --------------------------------------------------------------------------
deemed to be made only when actually received by the Warrant Agent. If delivery
- -------------------------------------------------------------------------------
is by mail, registered mail with return receipt requested, properly insured, is
- -------------------------------------------------------------------------------
recommended. In all cases, sufficient time should be allowed to assure timely
- ------------------------------------------------------------------------------
delivery.
- --------
(Instructions as to form and delivery of Warrant Securities and/or Warrant
Certificates)
Name in which Warrant Securities
are to be registered if other than
in the name of the registered holder
of this Warrant Certificate:
______________________________
A-6
<PAGE>
Address to which Warrant Securities
are to be mailed if other than to the
address of the registered holder of
this Warrant Certificate as shown on
the books of the Warrant Agent:
______________________________
(Street Address)
______________________________
(Zip Code) (City and State)
A-7
<PAGE>
[Except for Book-Entry Warrant Certificate:
- ------------------------------------------
Name in which Warrant Certificate
evidencing unexercised Warrants, if any,
are to be registered if other than in the
name of the registered holder of this
Warrant Certificate:
_____________________________
Address to which certificate representing
unexercised Warrants, if any, are to be
mailed if other than to the address of
the registered holder of this Warrant
Certificate as shown on the books of
the Warrant Agent:
______________________________
(Street Address)
______________________________
(City and State) (Zip Code)
Dated:
______________________________
Signature
([Except for Book-Entry Warrant
------------------------------
Certificate:
------------
Signature must conform in all
respects to the name of the
holder as specified on the face
of this Warrant Certificate.] If
Warrant Securities, or a Warrant
Certificate evidencing
unexercised Warrants, are to be
issued in a name other than that
of the registered holder hereof
or are to be delivered to an
address other than the address of
such holder as shown on the books
of the Warrant Agent, the above
signature must be guaranteed by a
member firm of a registered
national stock exchange, a member
of the National Association of
Securities Dealers, Inc., a
participant in the Security
Transfer Agents Medallion Program
or the Stock Exchange Medallion
Program, or by a commercial bank
or trust company having an office
or correspondent in the United
States.)
A-8
<PAGE>
SIGNATURE GUARANTEE
- -------------------
Name of Firm _________________
Address ______________________
Area Code
and Number ___________________
Authorized
Signature ____________________
Name _________________________
Title ________________________
Dated: ________________, 19__
A-9
<PAGE>
ASSIGNMENT
(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT HOLDER
DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY)
FOR VALUE RECEIVED, _________________ hereby sell(s), assign(s) and
transfer(s) unto ________________________________
__________________________________ _______________________
(Please print name and address (Please insert social security or
including zip code of assignee) other identifying number of assignee)
the rights represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint ____________ Attorney to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
__________________________________
Signature
(Signature must conform in all respects to the name of
the holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee by a
member firm of a registered national securities
exchange, a member of the National Association of
Securities Dealers, Inc., a participant in the Security
Transfer Agents Medallion Program or the Stock Exchange
Medallion Program, or by a commercial bank or trust
company having an office or correspondent in the United
States)
SIGNATURE GUARANTEE
Name of Firm _________________
Address ______________________
Area Code
and Number ___________________
Authorized
Signature ____________________
Name _________________________
Title ________________________
Dated: ________________, 19__
A-10
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3 No. 333-53969) and
related prospectus of Brookdale Living Communities, Inc. for the registration
of $200,000,000 of Common Stock, Preferred Stock, Debt Securities and
Warrants, and to the incorporation by reference therein of our report dated
March 26, 1998, with respect to the consolidated financial statements of
Brookdale Living Communities, Inc., for the period from May 7, 1997 through
December 31, 1997, and the combined financial statements of Predecessor
Properties for the period from January 1, 1997 through May 6, 1997 and for
each of the two years in the period ended December 31, 1996 included in the
1997 Annual Report (Form 10-K) of Brookdale Living Communities, Inc., filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
July 6, 1998
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Brookdale Living Communities, Inc.
(Exact name of obligor as specified in its charter)
Delaware 36-4103812
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
77 West Wacker Drive
Chicago, IL 60601
(Address of principal executive offices) (Zip Code)
Brookdale Living Communities, Inc. Debt Securities
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No. 22-17940) and is incorporated herein by reference
thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit
2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-
17940) and is incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement
of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. If the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(bd) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a part
hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to item 2 of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of the Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the July 7, 1998.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Kathy A. Larimore
-----------------------------
NAME: Kathy A. Larimore
TITLE: Assistant Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Brookdale
Living Communities, Inc. of its Brookdale Living Communities, Inc. Debt
Securities, we hereby consent that reports of examination by Federal, State,
Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Kathy A. Larimore
-----------------------------
NAME: Kathy A. Larimore
TITLE: Assistant Vice President
Dated: July 7, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
Dollars
ASSETS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........................ 1,144,309
Interest-bearing balances................................................. 9,914,704
Securities..................................................................... 10,062,052
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary....................................... 8,073,970
Loans and lease financing receivables:
Loans and leases, net of unearned income......... 6,433,627
Allowance for loan and lease losses.............. 88,820
Allocated transfer risk reserve.................. 0
Loans and leases, net of unearned income and allowances................... 6,344,807
Assets held in trading accounts................................................ 1,117,547
Premises and fixed assets...................................................... 453,576
Other real estate owned........................................................ 100
Investments in unconsolidated subsidiaries..................................... 44,985
Customers' liability to this bank on acceptances outstanding................... 66,149
Intangible assets.............................................................. 263,249
Other assets................................................................... 1,066,572
----------
Total assets................................................................... 38,552,020
==========
LIABILITIES
Deposits:
In domestic offices....................................................... 9,266,492
Noninterest-bearing......................... 6,824,432
Interest-bearing............................ 2,442,060
In foreign offices and Edge subsidiary.................................... 14,385,048
Noninterest-bearing......................... 75,909
Interest-bearing............................ 14,309,139
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices
of the bank and of its Edge subsidiary.................................... 9,949,994
Demand notes issued to the U.S. Treasury and Trading Liabilities............... 171,783
Trading liabilities............................................................ 1,078,189
Other borrowed money........................................................... 406,583
Subordinated notes and debentures.............................................. 0
Bank's liability on acceptances executed and outstanding....................... 66,149
Other liabilities.............................................................. 878,947
Total liabilities.............................................................. 36,203,185
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus.................................. 0
Common stock................................................................... 29,931
Surplus........................................................................ 450,003
Undivided profits and capital reserves/Net unrealized holding gains (losses)... 1,857,021
Net unrealized holding gains (losses) on available-for-sale securities......... 18,136
Cumulative foreign currency translation adjustments............................ (6,256)
Total equity capital........................................................... 2,348,835
----------
Total liabilities and equity capital........................................... 38,552,020
==========
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
