As filed with the Securities and Exchange Commission on November 7, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MANOR CARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1200376
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
Manor Care, Inc.
11555 Darnestown Road
Gaithersburg, Maryland 20878-3200
(301) 979-4000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
James H. Rempe, Esq.
Senior Vice President and General Counsel
Manor Care, Inc.
11555 Darnestown Road
Gaithersburg, Maryland 20878-3200
(301) 979-4000
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies to:
W. Leslie Duffy, Esq. John E. Riley, Esq.
Cahill Gordon & Reindel Simpson Thacher & Bartlett
Eighty Pine Street 425 Lexington Avenue
New York, New York 10005 New York, New York 10017
(212) 701-3000 (212) 455-2000
Approximate date of commencement of proposed
sale to the public: From time to time after the
effective date of this Registration Statement.
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 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. / /
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to Be Registered Be Registered Per Unit* Offering Price* Registration Fee(1)
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Debt Securities $250,000,000 100% $250,000,000 $75,758
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* Estimated solely for purposes of calculating the registration fee.
1 Calculated in accordance with Rule 457(o) under the Securities Act.
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 eff ctive in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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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.
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PROSPECTUS SUBJECT TO COMPLETION, DATED NOVEMBER 7, 1996
MANOR CARE, INC.
Debt Securities
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Manor Care, Inc. ("Manor Care" or the "Company") may offer from time
to time unsecured debt securities ("Debt Securities") consisting of debentures,
notes and/or other evidences of unsecured indebtedness in one or more series, or
any combination of the foregoing, at an aggregate principal amount not to exceed
$250,000,000, or its equivalent if some or all of the Debt Securities are
denominated in one or more foreign currencies, at prices and on terms to be
determined at or prior to the time of sale in light of market conditions at the
time of sale.
Specific terms of the particular Debt Securities in respect of which
this Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the terms
of the offering of the Debt Securities and the initial price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Debt Securities, without limitation, the
following: the specific designation, aggregate principal amount, authorized
denomination, maturity, rate or method of calculation of interest and dates for
payment thereof, any exchangeability, conversion, redemption, prepayment or
sinking fund provisions, the currency or currencies or currency unit or currency
units in which principal, premium, if any, or interest, if any, is payable, any
modifications of or additions to the covenants described in this Prospectus and
any other specific terms thereof. The amounts payable by Manor Care in respect
of Debt Securities may be calculated by reference to the value, rate or price of
one or more specified commodities, currencies or indices to the extent set forth
in the Prospectus Supplement. The Prospectus Supplement will also contain
information, where applicable, about certain United States federal income tax
considerations relating to the Debt Securities covered by the Prospectus
Supplement.
The Company may sell the Debt Securities directly, through agents
designated from time to time or through underwriters or dealers. If any agents
of the Company or any underwriters or dealers are involved in the sale of the
Debt Securities, the names of such agents, underwriters or dealers, any
applicable commissions and discounts, and the net proceeds to the Company will
be set forth in the applicable Prospectus Supplement. See "Plan of Distribution"
for possible indemnification arrangements for agents, underwriters and dealers.
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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.
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This Prospectus may not be used to consummate
sales of Debt Securities unless accompanied by a
Prospectus Supplement.
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The date of this Prospectus is , 1996
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (which term shall include all
amendments, exhibits and schedules thereto) under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities. This Prospectus
does not contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission, and to which reference is hereby made. Statements made in
this Prospectus as to the contents of any document referred to are not
necessarily complete. With respect to each such document filed as an exhibit to
the Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference. The Registration Statement may be
inspected, without charge, at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies of such material can 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 informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Commission.
Reports, proxy and information statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the following Regional Offices of the Commission: New York
Regional Office, Seven World Trade Center, New York, New York 10048; and Chicago
Regional Office, Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. Certain of the Company's securities are
listed on the New York Stock Exchange. Reports, proxy and information statements
and other information can be inspected and copied at the Library of the New York
Stock Exchange at 20 Broad Street, New York, New York 10005. Such reports and
other information can be reviewed through the Commission's Electronic Data
Gathering Analysis and Retrieval System, which is publicly available through the
Commission's web site (http://www.sec.gov).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Manor Care hereby incorporates by reference in this Prospectus its
Annual Report on Form 10-K for the fiscal year ended May 31, 1996; its Quarterly
Reports on Form 10-Q for the quarterly period ended August 31, 1996; and its
Current Report on Form 8-K dated November 5, 1996.
All documents filed by Manor Care pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the
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offering of the Debt Securities shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date 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 that a statement contained herein
or in any other subsequently filed document which also 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.
Manor Care undertakes to provide without charge to each person to whom
this Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by reference
(not including exhibits to such documents unless exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
Manor Care, Inc., at its principal executive offices at 11555 Darnestown Road,
Gaithersburg, Maryland 20878, Attention: Secretary; telephone: (301) 979-4000.
The terms "Manor Care" and the "Company," unless the context otherwise
requires, as used herein, refer to Manor Care, Inc., and all its subsidiaries.
THE COMPANY
Manor Care and its subsidiaries have been engaged since October 1968
in the business of developing, owning and managing nursing centers that provide
skilled nursing and convalescent care principally to residents over the age of
65. With 176 skilled nursing and rehabilitation facilities and 24 assisted
living facilities in 28 states, the Company is one of the largest providers of
long-term care in the country. The Company provides quality long-term care,
targeting upper income, service sensitive, private paying patients. In the
Company's latest quarter, private pay patients accounted for approximately 59%
of healthcare revenues.
The Company's nursing centers provide, in general, five types of
services:
(1) High acuity services -- for persons who require complex medical
and physical rehabilitation services (patients who would
otherwise be treated in an acute care hospital setting);
(2) Skilled nursing care -- for persons who require 24-hour-a-day
professional services of a registered nurse or a licensed
practical nurse;
(3) Intermediate care -- for persons needing less intensive nursing
care than that provided to those requiring skilled care;
(4) Custodial care -- for persons needing a minimum level of care;
and
(5) Assisted living -- for persons needing some supervision and
assistance with personal care.
The Company may also provide certain additional services to its
patients, including nursing care as required; room and board; special diets;
occupational, speech, physical and
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recreational therapy; and other services that may be specified by the patient's
physician, who directs the admission, treatment and discharge of that patient.
The Company currently operates 23 dedicated high acuity units and with
over a decade of experience in providing complex medical and physical
rehabilitation is an industry leader in serving high acuity patients. The
Company also operates 17 assisted living facilities that serve the needs of the
general assisted living population, in addition to seven facilities designed to
meet the specialized needs of individuals in the early to middle stages of
Alzheimer's disease.
In October 1995, the Company entered into a strategic partnership with
In Home Health, Inc., a leading provider of home health care services.
Vitalink Pharmacy Services, Inc. ("Vitalink"), an 82%-owned subsidiary
of the Company, provides institutional pharmacy services to nursing facilities
and other institutions in 19 markets around the country. On September 3, 1996,
Vitalink entered into an agreement to acquire (the "Acquisition") the TeamCare
pharmaceutical unit of GranCare, Inc. ("GranCare") for approximately 11,600,000
shares of its common stock and the assumption of $107 million in debt. As a
result of this transaction, the Company's ownership in Vitalink will be reduced
to approximately 45% of the outstanding Vitalink common stock. The Acquisition
remains subject to the approval of the shareholders of GranCare and the
satisfaction or waiver of certain other conditions. There can be no assurance
the Acquisition will be completed.
On November 1, 1996, the Company completed a tax-free spin-off of its
lodging business to its shareholders.
USE OF PROCEEDS
Unless otherwise indicated in an applicable Prospectus Supplement, the
net proceeds from the sale of the Debt Securities will be used for general
corporate purposes, which may include capital expenditures, possible
acquisitions, repurchase of the Company's stock, payment of other debt and such
other purposes as may be stated in any Pricing Supplement.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
of the Company for the periods indicated:
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Three Months
Ended August 31, Years Ended May 31,
1996 1996 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(a) 3.90x 4.00x 5.89x 5.01x 3.32x 2.92x
</TABLE>
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(a) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations before provision
for income taxes, before fixed charges, plus dividends from less than
50%-owned companies carried at equity and the Company's share of
pre-tax income of 50%-owned companies carried at equity, less
capitalized interest and preferred stock dividend requirements of
consolidated subsidiaries. Fixed charges comprise interest on long-term
and short-term debt, capitalized interest, the portion of rentals
representative of an interest factor and the Company's share of fixed
charges of 50%-owned companies carried at equity.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (the
"Indenture") to be entered into between the Company and The Chase Manhattan
Bank, as Trustee (the "Trustee"), the form of which is filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The Debt
Securities may be issued from time to time in one or more series. The particular
terms of each series, or of Debt Securities forming a part of a series, which
are offered by a Prospectus Supplement, will be described in such Prospectus
Supplement. The following statements are subject to the detailed provisions of
the Indenture; whenever particular provisions of the Indenture are referred to,
such provisions are incorporated by reference as a part of the statement made,
and the statement is qualified in its entirety by such reference. Whenever a
defined term is referred to and not defined under "Description of Debt
Securities", the definition thereof is contained in the Indenture.
General
The Indenture provides for the issuance from time to time of Debt
Securities in an unlimited aggregate principal amount and an unlimited number of
series.
The Debt Securities are unsecured and will rank pari passu with all
other unsecured and nonsubordinated debt of the Company.
Reference is made to the applicable Prospectus Supplement for the
following terms of the series of Debt Securities offered thereby: (i) the title
of the Debt Securities of such series; (ii) any limit upon the aggregate
principal amount of such Debt Securities; (iii) the person to whom
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the interest on a Debt Security of any series will be payable if not the person
in whose name that Debt Security is registered on the regular record date; (iv)
the date or dates on which such Debt Securities will mature or the method of
determination of such date or dates; (v) the rate or rates, or the method of
determination thereof, at which such Debt Securities will bear interest, if any,
the date or dates from which such interest will accrue, the date or dates such
interest will be payable and, for Registered Debt Securities (as defined below),
the Regular Record Dates; (vi) the place or places where the principal of,
premium, if any, and interest, if any, on, such Debt Securities will be payable;
(vii) the periods, prices and terms and conditions upon which any such Debt
Security may be redeemed, in whole or in part, at the option of the Company;
(viii) any terms for redemption or repurchase pursuant to any sinking fund or
analogous provision or at the option of a Holder; (ix) any terms for conversion
of the Debt Securities into other securities of the Company or any other
corporation at the option of a holder; (x) any terms for the attachment to such
Debt Securities of warrants, options or other rights to purchase or sell stock
or other securities of the Company; (xi) if other than the principal amount
thereof, the portion of the principal amount of such Debt Securities that will
be payable upon acceleration of maturity; (xii) any deletions or modifications
of, or additions to, the Events of Default or covenants of the Company under the
Indenture with respect to such Debt Securities (including whether the covenants
described below under "Certain Covenants of the Company" will not apply to such
Debt Securities); (xiii) if other than U.S. dollars, the currency, currencies or
currency unit or units in which such Debt Securities will be denominated and in
which the principal of, premium, if any, and interest, if any, on, such Debt
Securities will be payable; (xiv) whether, and the terms and conditions on
which, the Company or a Holder may elect that, or the other circumstances under
which, payment of principal of, premium, if any, or interest, if any, on, such
Debt Securities is to be made in a currency or currencies or currency unit or
units other than that in which such Debt Securities are denominated; (xv) any
manner of determining the amount of principal of, premium, if any, or interest,
if any, on, any such Debt Securities to be determined with reference to an index
based on a currency or currency unit or units other than that in which such Debt
Securities are stated to be payable or an index based on any other method; (xvi)
whether such Debt Securities will be issued in fully registered form without
coupons ("Registered Debt Securities") or in bearer form with or without coupons
("Bearer Debt Securities"), or any combination thereof, whether such Debt
Securities will be issued in the form of one or more global securities (each a
"Global Debt Security") and whether such Debt Securities are to be issuable in
temporary global form or definitive global form; (xvii) if such Debt Securities
are to be issued upon the exercise of warrants, the time, manner and place for
such Debt Securities to be authenticated and delivered; (xviii) whether and
under what circumstances the Company will pay additional amounts to any holder
of such Debt Securities who is not a United States person (as defined below
under "Temporary Global Securities") in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether and on what terms
the Company will have the option to redeem such Debt Securities rather than pay
any additional amounts; and (xix) any other terms of any of such Debt Securities
not inconsistent with the Indenture.
Unless otherwise specified in the applicable Prospectus Supplement,
(x) the Debt Securities will be Registered Debt Securities and (y) Debt
Securities denominated in U.S. dollars
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will be issued, in the case of Registered Debt Securities, in denominations of
$1,000 or an integral multiple thereof and, in the case of Bearer Debt
Securities, in denominations of $5,000. Debt Securities may bear legends
required by United States Federal tax law and regulations.
If any of the Debt Securities are sold for any foreign currency or
currency unit or if the principal of, premium, if any, or interest, if any, on,
any of the Debt Securities is payable in any foreign currency or currency unit,
the restrictions, elections, tax consequences, specific terms and other
information with respect to such Debt Securities and such foreign currency or
currency unit will be set forth in the Prospectus Supplement relating thereto.
Certain Covenants of the Company
Certain Definitions Applicable to Covenants
"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.
"Applicable Percentage" means (i) 15%, if the aggregate principal
amount of Debt Securities then Outstanding exceeds $100,000,000, (ii) 20%, if
the aggregate principal amount of Debt Securities then Outstanding exceeds
$50,000,000 but is less than or equal to $100,000,000 or (iii) 25%, if the
aggregate principal amount of Debt Securities Outstanding is less than or equal
to $50,000,000.
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable and at any date as of which the amount thereof is
to be determined, the lesser of (i) the fair value of the property subject to
such lease (as determined in good faith by the chief financial or accounting
officer of the Company) and (ii) the total net amount of rent required to be
paid by such Person under such lease during the remaining primary term thereof,
discounted from the respective due dates thereof to such date at the weighted
average interest borne by the particular series of Debt Securities compounded
annually. The net amount of rent required to be paid under any such lease for
any such period shall be the aggregate amount of the rent payable by the lessee
with respect to such period after excluding amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water rates
and similar charges. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the amount of
such penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Consolidated Net Assets" means, with respect to any Person as of any
date of determination, the total assets of such person and its Subsidiaries on a
consolidated basis, less
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current liabilities of such Person and its Subsidiaries on a consolidated basis
as of such date, all computed in accordance with generally accepted accounting
principles.
"Existing Mortgages" means, with respect to any series of Debt
Securities, Mortgages on property or assets of the Company or any Subsidiary of
the Company existing on, or provided for in agreements existing on, the Issue
Date for such series.
"Foreign Subsidiary" means a Subsidiary of the Company which is
incorporated or organized in a jurisdiction outside the United States and any
Subsidiary of such a Subsidiary.
"Issue Date" means, with respect to any series of Debt Securities, the
first date on which Debt Securities of such series are issued under this
Indenture.
"Non-Recourse Debt" means Debt or that portion of Debt (i) as to which
neither the Company nor its Subsidiaries (other than a Non-Recourse Subsidiary)
(A) provide credit support (including any undertaking, agreement or instrument
which would constitute Debt), (B) are directly or indirectly liable or (C)
constitute the lender and (ii) in respect of which a default (including any
rights which the holders thereof may have to take enforcement action against a
Non-Recourse Subsidiary) would not permit (upon notice, lapse of time or both)
any holder of any other Debt of the Company or its Subsidiaries (including any
Non-Recourse Subsidiary) to declare a default on such other Debt or cause a
payment thereof to be accelerated or payable prior to its Stated Maturity.
"Non-Recourse Subsidiary" means a Subsidiary of the Company which (i)
has not acquired any assets (other than cash) directly or indirectly from the
Company or any Subsidiary of the Company, (ii) only owns assets acquired after
the Issue Date and on or prior to the date such entity becomes a Subsidiary of
the Company and (iii) has no Debt other than Non-Recourse Debt.
"Principal Property" means any real estate or warehouse owned or
leased by the Company or any Restricted Subsidiary of the Company which is
located within the United States of America and the gross book value (including
related land and improvements thereon and all machinery and equipment included
therein without deduction of any depreciation reserves) of which on the date as
of which the determination is being made exceeds 2% of Consolidated Net Assets,
other than (a) any property which in the opinion of the Board of Directors is
not of material importance to the total business conducted by the Company as an
entirety or (b) any portion of a particular property which is found by the Board
of Directors not to be of material importance to the use or operation of such
property.
"Restricted Subsidiary" means a Subsidiary of the Company (a)
substantially all the property of which is located, or substantially all the
business of which is carried on, within the United States of America and (b)
which owns a Principal Property.
"Subsidiary" of any specified corporation means (i) any corporation at
least a majority
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of whose outstanding Voting Stock shall at the time be owned, directly or
indirectly, by the specified corporation or by one or more of its Subsidiaries,
or both or (ii) any other person (other than a corporation) in which the
specified corporation or one or more of its Subsidiaries, or both, shall at the
time, directly or indirectly, have greater than a 50% ownership interest.
Restrictions on Secured Debt
If the Company or any Restricted Subsidiary shall incur or guarantee
any indebtedness for money borrowed ("Debt") secured by a mortgage, pledge or
lien ("Mortgage") on any Principal Property of the Company or of any Restricted
Subsidiary, or on any shares of stock or Debt of any Restricted Subsidiary, the
Company will secure or cause such Restricted Subsidiary to secure the Debt
Securities equally and ratably with (or, at the Company's option, prior to) such
secured Debt, unless the aggregate amount of all such secured Debt would not
exceed the Applicable Percentage of Consolidated Net Assets.
The above restrictions will not apply to, and there will be excluded
from secured Debt in any computation under such restrictions, Debt secured by
(a) any Mortgage if an amount of cash equal to the net proceeds of the Debt
secured by such Mortgage is used within 12 months of the creation, incurrence or
assumption of such Mortgage to (i) acquire additional property or assets (or to
make investments in persons who, after giving effect to such investments, will
become Subsidiaries of the Company), (ii) retire debt which is pari passu with
the Debt Securities (provided that in connection with any such retirement, any
related loan commitment or the like shall be reduced in an amount equal to the
principal amount so retired) or (iii) make an offer to purchase the Debt
Securities at 100% of the principal amount thereof, plus accrued interest, if
any, to the date of purchase; (b) Existing Mortgages; (c) Mortgages on property
or assets of any person existing at the time such person becomes a Restricted
Subsidiary or merges into or consolidates with the Company or a Restricted
Subsidiary; (d) Mortgages on property or assets or shares of stock or debt
existing at the time of acquisition thereof by the Company or any Restricted
Subsidiary; (e) Mortgages or property or assets or shares of stock or debt to
secure the financing of the acquisition, construction, alteration or improvement
of property or assets of the Company or any Restricted Subsidiary of the Company
(or of persons who, after giving effect to such financing, will become
Restricted Subsidiaries), provided that such Mortgages are created not later
than 18 months after such acquisition or, in the case of construction,
alteration or improvement of property or assets, the later of the completion
thereof or the commencement of the commercial operation of such property or
assets; (f) Mortgages in favor of the Company or any Restricted Subsidiary; (g)
Mortgages in favor of or required by federal, state or local governmental
authorities or political subdivisions thereof, including any department or
instrumentality thereof, and any other Mortgages incurred or assumed in
connection with the issuance of any industrial revenue or similar bonds; (h)
Mortgages on property or assets of, or on any shares of stock or other equity
interest in, a Foreign Subsidiary to secure Debt of a Foreign Subsidiary, or a
Non-Recourse Subsidiary to secure Non-Recourse Debt; (i) Mortgages to secure
Debt of joint ventures in which the Company or a Subsidiary of the Company has
an interest, to the extent such Mortgages are on property or assets of or equity
interests in such joint ventures; (j) Mortgages on current assets to secure Debt
incurred for
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working capital purposes, provided that such Debt matures no later than 18
months from the date of incurrence; (k) Mortgages securing judgments or appeal
bonds with respect to amounts being contested in good faith; and (l) any
extension, renewal or replacement, as a whole or in part, of any Mortgage
referred to in the foregoing clauses (a) to (k), provided, however, that (i)
such extension, renewal or replacement Mortgage shall be limited to all or a
part of the same property or assets that secured the Mortgage being extended,
renewed or replaced and (ii) the principal amount (or, if such Debt provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration or maturity thereof, such lesser amount) of the Debt
secured by such extended, renewed or replaced Mortgage does not exceed the
principal amount (or, if such Debt provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount) of Debt which was secured by the
Mortgage being extended, renewed or replaced (plus the premiums and reasonable
expenses incurred in connection therewith).
Restrictions on Sales and Leasebacks
Neither the Company nor any Restricted Subsidiary may enter into any
sale and leaseback transaction involving any Principal Property (a "Sale and
Leaseback Transaction") unless (a) the Company or such Restricted Subsidiary
would, at the time of entering into the Sale and Leaseback Transaction, be
entitled to incur Debt secured by a Mortgage on the Principal Property to be
leased in an amount at least equal to the Attributable Debt in respect of such
transaction without equally and ratably securing the Debt Securities as
described under "Restrictions on Secured Debt" above; or (b) the proceeds of the
sale of the Principal Property to be leased are at least equal to the fair value
of such Principal Property (the amount of such proceeds, if other than in cash,
to be determined by the chief financial or accounting officer of the Company,
whose determination shall be conclusive) and an amount in cash equal to the net
proceeds are applied, within 12 months of the effective date of such
transaction, to (i) acquire additional assets (or to make investments in
entities which, after giving effect to such investment, will become
Subsidiaries), (ii) retire Debt which is pari passu with the Debt Securities
(provided that in connection with any such retirement, any related loan
commitment or the like shall be reduced in an amount equal to the principal
amount so retired) or (iii) offer to purchase the Debt Securities at 100% of the
principal amount thereof, plus accrued interest, if any, to the date of
purchase; or (c) the lease in such Sale and Leaseback Transaction is for a
period, including renewal rights, of not in excess of 36 months; or (d) the
lease in such Sale and Leaseback Transaction is a lease of Principal Property
entered into within 18 months from the acquisition of such Principal Property or
the transaction by which the person owning such Principal Property became a
Restricted Subsidiary, or in the case of the construction, alteration or
improvement of Principal Property, the later of the completion of the
construction, alteration or improvement of such Principal Property or the
commencement of commercial operation of the Principal Property; or (e) such Sale
and Leaseback Transaction is entered into between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries.
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Event Risk
The Indenture does not contain provisions permitting the Holders of
Debt Securities to require prepayment in the event of a change in the management
or control of the Company or in the event the Company enters into one or more
highly leveraged transactions, nor are any such events deemed to be Events of
Default under the terms of the Indenture. Should the terms of any Note
representing any Debt Securities contain such provisions, such provisions will
be described in the applicable Prospectus Supplement.
Limitation on Affiliate Transactions
The Indenture will provide that neither the Company nor any of its
Subsidiaries will sell, lease, transfer or otherwise dispose of any of its
properties or assets to or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or guaranty with, or for
the benefit of, an Affiliate of the Company (other than a Subsidiary) (an
"Affiliate Transaction") having a value, or for consideration having a value, in
excess of $20,000,000 individually or in the aggregate unless the Board of
Directors of the Company shall determine that the terms of such Affiliate
Transaction are no less favorable to the Company or such Subsidiary than those
which might be obtained at the time of such Affiliate Transaction from persons
who are not Affiliates. The restrictions of this "Limitation on Affiliate
Transactions" covenant are not applicable to the payment of reasonable and
customary fees to directors of the Company who are not employees, the payment of
compensation to officers of the Company and any transaction between or among any
of the Company and its Subsidiaries.
Limitation on Merger, Consolidation and Certain Sales of Assets
The Company will covenant that it will not merge into or consolidate
with any other corporation, or convey or transfer its properties and assets
substantially as an entirety, to, any person unless (a) the successor is a U.S.
corporation, (b) the successor assumes on the same terms and conditions all the
obligations under the Debt Securities and the Indenture and (c) immediately
after giving effect to the transaction, there is no default under the Indenture.
Upon any such merger, consolidation, conveyance or transfer, the successor will
succeed to, and will be substituted in lieu of, the Company.
Exchange, Registration and Transfer
Registered Debt Securities of any series will be exchangeable for
other Registered Debt Securities of the same series and of a like aggregate
principal amount and tenor of different authorized denominations. If Debt
Securities of any series are issuable as both Registered Debt Securities and
Bearer Debt Securities, the Bearer Debt Securities of such series (with all
unmatured coupons, except as provided below, and all matured coupons in default)
will be exchangeable for Registered Debt Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor. If
a Bearer Debt Security with coupons
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appertaining thereto is surrendered in exchange for a Registered Debt Security
after a Regular Record Date or Special Record Date and before the relevant date
for payment of interest, such Bearer Debt Security shall be surrendered without
the coupon relating to such date for payment of interest and interest will not
be payable on such date in respect of the Registered Debt Security issued in
exchange for such Bearer Debt Security, but will be payable only to the holder
of such coupon when due in accordance with the terms thereof and of the
Indenture. Bearer Debt Securities will not be issued in exchange for Registered
Debt Securities (unless otherwise specified in the applicable Prospectus
Supplement and permitted by applicable rules and regulations). No service charge
will be made for any transfer or exchange of the Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith.
Debt Securities may be presented for exchange as provided above, and
Registered Debt Securities (other than U.S. Book-Entry Debt Securities (as
defined below under "Definitive Global Securities--U.S. Book-Entry Securities"))
may be presented for registration of transfer (with the form of transfer
endorsed thereon duly executed), at the office of the Security Registrar or at
the office of any additional transfer agent designated by the Company for such
purpose with respect to any series of Debt Securities and referred to in the
applicable Prospectus Supplement. The Chase Manhattan Bank, currently located at
450 W. 33rd Street, New York, New York 10001-2697, will be the initial Security
Registrar under the Indenture. The Company may at any time designate, or rescind
the designation of, the Security Registrar or any additional transfer agent or
approve a change in the location through which the Security Registrar or any
such transfer agent acts, except that, if Debt Securities of a series are
issuable solely as Registered Debt Securities, the Company will be required to
maintain a transfer agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as both Registered Debt Securities and
Bearer Debt Securities or solely as Bearer Debt Securities, the Company will be
required to maintain (in addition to the Security Registrar) a transfer agent in
a Place of Payment for such series located outside of the United States. The
Company may at any time designate additional transfer agents with respect to any
series of Debt Securities.
In the event of any redemption in part of any series of Debt
Securities, the Company will not be required to: (i) issue, register the
transfer of, or exchange, Debt Securities of any series during a period
beginning at the opening of business 15 Business Days before any selection of
Debt Securities of that series to be redeemed and ending at the close of
business on (a) if Debt Securities of the series are issuable only as Registered
Debt Securities, the day of mailing of the relevant notice of redemption and (b)
if Debt Securities of the series are issuable as Bearer Debt Securities, the day
of the first publication of the relevant notice of redemption or, if Debt
Securities of the series are also issuable as Registered Debt Securities and
there is no publication, the day of mailing of the relevant notice of
redemption; (ii) register the transfer of, or exchange, any Registered Debt
Security selected for redemption, in whole or in part, except the unredeemed
portion of any Registered Debt Security being redeemed in part; or (iii)
exchange any Bearer Debt Security selected for redemption, except to exchange
such Bearer Debt Security for a Registered Debt Security of that series and of
like tenor which is simultaneously surrendered for redemption.
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For a discussion of restrictions on the exchange, registration and
transfer of Global Debt Securities, see "Global Securities" below.
Payment and Paying Agents
Payment of principal of, premium, if any, and interest, if any, on,
Registered Debt Securities will be made in the designated currency or currency
unit at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time. At the option of the Company, payment of any
interest on Registered Debt Securities may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Security Register. Payment of any installment of interest on any Registered Debt
Security will be made to the person in whose name such Registered Debt Security
is registered at the close of business on the Regular Record Date for such
interest.
Payment of principal of, premium, if any, and interest, if any, on,
Bearer Debt Securities will be made in the designated currency unit at the
offices of such Paying Agents outside the United States as the Company may
designate (subject to any applicable laws) from time to time. On the applicable
payment date therefor, payments of principal of, and premium, if any, on, Bearer
Debt Securities will be made against surrender of such Debt Securities, and
payment of interest on Bearer Debt Securities with coupons appertaining thereto
on any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest Payment Date. No payment with respect to any Bearer
Debt Security will be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
any account maintained with a bank located in the United States. Notwithstanding
the foregoing, payments of principal of, premium, if any, and interest, if any,
on, Bearer Debt Securities denominated and payable in U.S. dollars will be made
at the office of the Company's Paying Agent in the Borough of Manhattan, The
City of New York, if (but only if) payment of the full amount thereof in U.S.
dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
Unless otherwise indicated in the applicable Prospectus Supplement,
The Chase Manhattan Bank will be designated as the Company's Paying Agent for
payments with respect to Debt Securities that are issuable solely as Registered
Debt Securities and as the Company's Paying Agent in the Borough of Manhattan,
The City of New York for payments with respect to Debt Securities (subject to
the limitations described above in the case of Bearer Debt Securities) that are
issuable solely as Bearer Debt Securities or as both Registered Debt Securities
and Bearer Debt Securities. Any Paying Agents outside the United States and any
other Paying Agents in the United States initially designated by the Company for
the Debt Securities of a series will be named in the applicable Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that, if Debt Securities of a series
are issuable solely as Registered Debt Securities, the Company will be required
to maintain a Paying Agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as both Registered Debt Securities and
Bearer Debt Securities
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or solely as Bearer Debt Securities, the Company will be required to maintain
(i) a Paying Agent in the Borough of Manhattan, The City of New York for
payments with respect to any Registered Debt Securities of the series (and for
payments with respect to Bearer Debt Securities of the series in the
circumstances described above, but not otherwise), and (ii) a Paying Agent in a
Place of Payment (subject to any laws or regulations applicable thereto) located
outside the United States where Debt Securities of such series and any coupons
appertaining thereto may be presented and surrendered for payment; provided that
if the Debt Securities of such series are listed on any stock exchange located
outside the United States and such stock exchange shall so require, the Company
will maintain a Paying Agent in any required city located outside the United
States for the Debt Securities of such series.
All moneys deposited with the Trustee or a Paying Agent, or then held
by the Company, in trust for the payment of principal of, and premium and
interest, if any, on, any Debt Security or coupon that remains unclaimed at the
end of two years after such principal, premium or interest shall have become due
and payable will be repaid to the Company, or, if then held by the Company,
discharged from such trust, and the holder of such Debt Security or coupon will
thereafter look only to the Company for payment thereof.
Global Securities
The Debt Securities of a series may be issued in whole or in part as
one or more Global Debt Securities in either registered or bearer form and in
either temporary or definitive form. The Global Debt Security or Securities of a
series will be deposited with, or on behalf of, a depositary located in the
United States (a "U.S. Depositary") or a common depositary located outside the
United States (a "Common Depositary") identified in the Prospectus Supplement
relating to such series for the benefit of Euro-clear and CEDEL (as defined
below) for credit to the respective accounts of such beneficial owners of
interests in such Debt Securities. All temporary or definitive Global Debt
Securities in bearer form will be deposited with a Common Depositary.
The specific terms of the depositary arrangement with respect to any
Debt Securities of a series issued in global form will be described in the
Prospectus Supplement relating to such series. If so specified in the Prospectus
Supplement with respect to the Debt Securities of any series, for purposes other
than making payments on a definitive Global Debt Security, the Company may treat
a person having a beneficial interest in such definitive Global Debt Security as
the holder of such principal amount of Outstanding Debt Securities represented
by such definitive Global Debt Security as shall be specified in a written
statement of the holder of such definitive Global Debt Security, or, in the case
of a definitive Global Debt Security in bearer form, of Euro-clear or CEDEL (as
defined below), which is delivered to the Trustee by such person. 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 Global Debt
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. The Company anticipates that the following
provisions will apply to all depositary arrangements with
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a U.S. Depositary or Common Depositary.
Temporary Global Securities
If so specified in the applicable Prospectus Supplement, all or any
portion of the Debt Securities of a series that are issuable as Bearer Debt
Securities initially will be represented by one or more temporary Global Debt
Securities, without interest coupons, to be deposited with a Common Depositary
in London for Morgan Guaranty Trust Company of New York, Brussels Office, as
operator of the Euro-clear System ("Euro-clear"), and CEDEL S.A. ("CEDEL") for
credit to the respective accounts of the beneficial owners of such Debt
Securities (or to such other accounts as they may direct). On or after the
exchange date determined as provided in any such temporary Global Debt Security
and described in the applicable Prospectus Supplement, each such temporary
Global Debt Security will be exchangeable, in whole or from time to time in
part, for definitive Debt Securities in bearer form, registered form, definitive
global bearer form of any combination thereof, as specified in the applicable
Prospectus Supplement. No Bearer Debt Security (including a Debt Security in
definitive global bearer form) delivered in exchange for a portion of a
temporary Global Debt Security will be mailed or otherwise delivered to any
location in the United States in connection with such exchange.
Unless otherwise specified in the applicable Prospectus Supplement,
interest on any portion of a temporary Global Debt Security payable in respect
of an Interest Payment Date occurring prior to the issuance of definitive Debt
Securities will be paid to each of Euro-clear and CEDEL with respect to the
portion of the temporary Global Debt Security held for its account upon delivery
to the Trustee of a certificate signed by Euro-clear or CEDEL, as the case may
be, in the form required by the Indenture dated no earlier than such Interest
Payment Date, which certificate must be based on statements provided to it by
its account holders who are beneficial owners of interests in such temporary
Global Debt Security in the form set forth in the Indenture that such portion is
not beneficially owned by a United States person, and has not been acquired by
or on behalf of a United States person or for offer to resell or for resale to a
United States person or any person inside the United States or, if a beneficial
interest in such portion has been acquired by a United States person, (i) that
such person is a financial institution, as defined in applicable regulations
promulgated under the Internal Revenue Code of 1986, as amended (the "Code"),
purchasing for its own account or has acquired such Debt Security through a
financial institution and (ii) that such Debt Securities are held by a financial
institution that has agreed in writing to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder and
that it did not purchase for offer to resell or for resale inside the United
States. Each of Euro-clear and CEDEL will in such circumstances credit the
interest received by it in respect of such temporary Global Debt Security to the
accounts of the beneficial owners thereof (or to such other accounts as they may
direct).
As used herein, "United States person" means a citizen or resident of
the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or an estate or trust the
income of which is subject to United States Federal income
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taxation regardless of its source, and "United States" means the United States
of America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.
Definitive Global Securities
Bearer Securities
If any Debt Securities of a series are issuable in definitive global
bearer form, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
definitive global Bearer Debt Security may exchange such interests for Debt
Securities of such series and of like tenor and principal amount in any
authorized form and denomination. No Bearer Debt Security delivered in exchange
for a portion of a definitive Global Debt Security will be mailed or otherwise
delivered to any location in the United States in connection with such exchange.
Principal of, premium, if any, and interest, if any, on, a definitive global
Bearer Debt Security will be payable in the manner described in the applicable
Prospectus Supplement.
U.S. Book-Entry Securities
If Debt Securities of a series are to be represented by a definitive
global Registered Debt Security to be deposited with or on behalf of a U.S.
Depositary, such Debt Securities ("U.S. Book-Entry Debt Securities") will be
represented by a definitive Global Debt Security registered in the name of the
U.S. Depositary or its nominee. Upon the issuance of a definitive Global Debt
Security registered in the name of the U.S. Depositary, the U.S. Depositary will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the U.S. Book-Entry Debt Securities represented by such
Global Debt Security to the accounts of institutions that have accounts with
such depositary or its nominee ("participants"). The accounts to be credited
shall be designated by the underwriters or agents for the sale of such U.S.
Book-Entry Debt Securities or by the Company, if such Debt Securities are
offered and sold directly by the Company. Ownership of U.S. Book-Entry Debt
Securities will be limited to participants or persons that may hold interests
through participants. Ownership of U.S. Book-Entry Debt Securities will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the U.S. Depositary or its nominee for the applicable definitive
Global Debt Security or by participants or persons that hold through
participants. So long as the U.S. Depositary, or its nominee, is the registered
owner of such global Debt Security, such depositary or such nominee, as the case
may be, will be considered the sole owner or holder of the U.S. Book-Entry Debt
Securities represented by such Global Debt Security for all purposes under the
Indenture. Payment of principal of, and premium and interest, if any, on, U.S.
Book-Entry Debt Securities will be made to the U.S. Depositary or its nominee,
as the case may be, as the registered owner or the holder of the Global Debt
Security representing such U.S. Book-Entry Debt Securities. Owners of U.S.
Book-Entry Debt Securities will not be entitled to have such Debt Securities
registered in their names in the Security
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Register, will not receive or be entitled to receive physical delivery of such
Debt Securities in definitive form and will not be considered the owners or
holders thereof under the Indenture. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws impair the ability to purchase or
transfer U.S. Book-Entry Debt Securities.
The Company expects that the U.S. Depositary for U.S. Book-Entry Debt
Securities of a series, upon receipt of any payment of principal of, premium, if
any, or interest, if any, on, the related definitive Global Debt Security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such Global
Debt Security as shown on the records of such U.S. Depositary. The Company also
expects that payments by participants to owners of beneficial interests in such
Global Debt Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such participants.
Satisfaction and Discharge of Indenture
The Company may terminate as to a series all of its obligations under
the Debt Securities and the Indenture either upon delivery for cancellation to
the Trustee of all the Debt Securities of the series or (a)(i) within one year
of maturity or redemption of the series or (ii) at any time if the Holders will
not recognize income, gain or loss for Federal income tax purposes, (b) upon
deposit with the Trustee of funds or U.S. Government Obligations (as defined in
the Indenture) sufficient for payment of principal of and interest on, or
redemption of, the series and (c) upon delivery to the Trustee of an officers'
certificate and opinion of counsel stating that all conditions precedent to
discharge have been satisfied.
Events of Default, Notice and Waiver
The Indenture provides that, if an Event of Default specified therein
with respect to any series of Debt Securities occurs and is continuing, either
the Trustee or the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of such series, or in the case of certain Events of
Default specified in clauses (v) and (vi) below, of all series (voting as a
class), may declare the principal (and premium, if any) of all the Debt
Securities of such series, together with accrued interest thereon, if any, to be
immediately due and payable by notice in writing to the Company (and to the
Trustee if given by the holders).
Events of Default in respect of any series are defined in the
Indenture as being (i) default for 30 days in payment of any interest
installment when due; (ii) default in payment of principal of, or premium, if
any, on any of the Debt Securities of such series when due (other than any
sinking fund payments) at their stated maturity, by declaration, when called for
redemption or otherwise; (iii) default for 30 days in the making of any sinking
fund payment when due; (iv)
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default for 60 days after notice to the Company by the Trustee or by holders of
25% in aggregate principal amount of the outstanding Debt Securities of such
series in the performance of any covenant in the Debt Securities of such series
or in the Indenture or any supplemental indenture with respect to Debt
Securities of such series; (v) acceleration of in excess of an aggregate of
$20,000,000 of indebtedness for borrowed money of the Company or any Subsidiary
(other than Non-Recourse Debt of a Non-Recourse Subsidiary) under the terms of
the instrument under which such indebtedness is or may be outstanding if such
acceleration is not rescinded or annulled within 10 days after written notice
from the Trustee or the holders of at least 25% in principal amount of the Debt
Securities then outstanding has been received; (vi) a final judgment for the
payment of $20,000,000 or more rendered against the Company or any Subsidiary in
any court of competent jurisdiction and not fully covered by insurance or not
discharged or stayed within 90 days after the date all rights to appeal have
expired or been extinguished; (vii) certain events of bankruptcy, insolvency and
reorganization; and (viii) any other Event of Default provided with respect to
Debt Securities of such series. No Event of Default with respect to a single
series of indebtedness issued under the Indenture (or any supplemental
indenture) necessarily constitutes an Event of Default with respect to any other
series of indebtedness issued thereunder.
The Indenture provides that the trustee will, within 90 days after the
occurrence of a default with respect to the Debt Securities of any series, give
to the holders of the Debt Securities of such series notice of all uncured and
unwaived defaults known to it, provided that, except in the case of default in
the payment of principal of, or premium or interest, if any, on, or a sinking
fund installment, if any, with respect to any of the Debt Securities of such
series, the Trustee will be protected in withholding such notice if it in good
faith determines that the withholding of such notice is in the interest of the
holders of the Debt Securities of such series; provided further that in the case
of a default due to the failure to observe or comply with any covenant of the
Indenture, no such notice to holders shall be given until at least 30 days after
the occurrence of such default. The term "default" for the purpose of this
provision only means the happening of any of the Events of Default specified
above, except that any grace period or notice requirement is eliminated.
The Indenture contains provisions entitling the Trustee, subject to
the duty of the Trustee during an Event of Default to act with the required
standard of care, to be indemnified by the holders of the Debt Securities before
proceeding to exercise any right or power under the Indenture at the request of
holders of the Debt Securities.
The Indenture provides that the holders of a majority in principal
amount of the outstanding Debt Securities of any series may in certain
circumstances direct the time, method and place of conducting proceedings for
remedies available to the Trustee or exercising any trust or power conferred on
the Trustee in respect of such series.
The Indenture includes a covenant that the Company will file annually
with the Trustee an Officers' Certificate stating whether any default exists and
specifying any default that exists.
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In certain cases, the holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
Debt Securities of such series waive any past default or Event of Default with
respect to the Debt Securities of such series or compliance with certain
provisions of the Indenture, except (i) a default not theretofore cured in
payment of the principal of, premium, if any, or interest, if any, on any of the
Debt Securities of such series; or (ii) in respect of a covenant or provision of
the Indenture which cannot be modified or amended without the consent of the
holder of each outstanding Debt Security of a series affected. The holders of a
majority in principal amount of a series of outstanding Debt Securities also
have certain rights to rescind any declaration of acceleration with respect to
such series after all Events of Default with respect to such series not arising
from such declaration shall have been cured.
Modification of the Indenture
The Indenture provides that the Company and the Trustee thereunder
may, without the consent of any holders of Debt Securities, enter into
supplemental indentures for the purposes, among other things, of adding to the
Company's covenants, adding additional Events of Default, establishing the form
or terms of any series of Debt Securities issued under such supplemental
indentures or curing ambiguities or inconsistencies in the Indenture or making
other provisions, provided such other provisions shall not adversely affect the
interests of the holders of any series of outstanding Debt Securities in any
material respect.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding Debt Securities of all affected series
(acting as one class), to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or modifying in any manner the rights of the holders of the Debt
Securities of such series, except that no such supplemental indenture may,
without the consent of the holders of all the outstanding Debt Securities
affected thereby, among other things: (i) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security; (ii) reduce the principal amount of, the rate of interest on, or any
premium payable upon the redemption of, any Debt Security; (iii) 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; (iv)
change any Place of Payment where, or the currency, currencies or currency unit
or units in which, any Debt Security or any premium or interest thereon is
payable; (v) 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); (vi) affect adversely the terms, if any, of
conversion of any Debt Security into stock or other securities of the Company or
of any other corporation; (vii) reduce the percentage in principal amount of the
outstanding Debt 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 the Indenture
or certain defaults thereunder and their consequences) provided for in the
Indenture; (viii) change any obligation of the Company, with
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respect to outstanding Debt Securities of a series, to maintain an office or
agency in the places and for the purposes specified in the Indenture for such
series; (ix) modify any of the foregoing provisions or the provisions for the
waiver of certain covenants and defaults, except to increase any applicable
percentage of the aggregate principal amount of outstanding Debt Securities the
consent of the holders of which is required, or to provide with respect to any
particular series the right to condition the effectiveness of any supplemental
indenture as to that series on the consent of the holders of a specified
percentage of the aggregate principal amount of outstanding Debt Securities of
such series, or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the holder of each outstanding Debt
Security affected thereby.
Waiver of Certain Covenants
The Indenture provides that the Company may omit to comply with
certain restrictive covenants described above under "Certain Covenants of the
Company" if the holders of not less than a majority in principal amount of all
series of outstanding Debt Securities affected thereby (acting as one class)
waive compliance with such restrictive covenants.
Notices
Except as otherwise provided in the Indenture, notices to holders of
Bearer Debt Securities will be given by publication at least once in a daily
newspaper in The City of New York and in London and in such other city or cities
as may be specified in such Bearer Debt Securities and will be mailed to such
persons whose names and addresses were previously filed with the Trustee, within
the time prescribed for the giving of such notice. Notices to holders of
Registered Debt Securities will be given by first-class mail or by overnight
courier to the addresses of such holders as they appear in the Security
Register.
Title
Title to any Bearer Debt Securities and any coupons appertaining
thereto will pass by delivery. The Company, the Trustee and any agent of the
Company or the Trustee may treat the holder of any Bearer Debt Security or
related coupon and, prior to due presentment for registration of transfer, the
registered owner of any Registered Debt Security (including Registered Debt
Securities in global registered form), as the owner thereof (whether or not such
Debt Security or coupon shall be overdue and notwithstanding any notice to the
contrary) for the purpose of making payment of principal (and premium, if any)
and interest and for all other purposes.
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Replacement of Securities Coupons
Any mutilated Debt Security and any Debt Security with a mutilated
coupon appertaining thereto will be replaced by the Company at the expense of
the holder upon surrender of such mutilated Debt Security or Debt Security with
a mutilated coupon to the Security Registrar. Debt Securities or coupons that
become destroyed, stolen or lost will be replaced by the Company at the expense
of the holder upon delivery to the Security Registrar of evidence of the
destruction, loss or theft thereto satisfactory to the Company and the Security
Registrar; in the case of any coupon which becomes destroyed, stolen or lost,
such coupon will be replaced (upon surrender to the Security Registrar of the
Debt Security with all appurtenant coupons not destroyed, stolen or lost) by
issuance of a new Debt Security in exchange for the Debt Security to which such
coupon appertains. In the case of a destroyed, lost or stolen Debt Security or
coupon, an indemnity satisfactory to the Security Registrar and the Company may
be required at the expense of the holder of such Debt Security or coupon before
a replacement Debt Security will be issued; provided that if such new Debt
Security is a Bearer Debt Security, such Debt Security shall be delivered only
outside the United States.
Governing Law
The Indenture, the Debt Securities and the coupons will be governed
by, and construed in accordance with, the laws of the State of New York, without
regard to principles of conflicts of laws.
Concerning the Trustee
The Company may from time to time maintain lines of credit, and have
other customary banking relationships, with The Chase Manhattan Bank, the
Trustee under the Indenture, or with its affiliates. The Chase Manhattan Bank
also serves as the indenture trustee with respect to the Company's 9 1/2% Senior
Subordinated Notes due 2002.
PLAN OF DISTRIBUTION
The Company may sell all or part of the Debt Securities from time to
time on terms determined at the time such Debt Securities are offered for sale.
The Securities may be sold (i) through underwriters or dealers; (ii) through
agents; (iii) directly to one or more purchasers; or (iv) through a combination
of any such methods of sale. The Prospectus Supplement relating to the
particular series of the Debt Securities offered thereby will set forth the
terms of the offering of such series of the Debt Securities, including the name
or names of any underwriters, dealers or agents, the purchase price of such Debt
Securities, the proceeds to the Company from such sale, any underwriting
discounts and other items constituting underwriters' or agents' compensation,
any initial public offering price, any discounts or sales agent's commissions or
concessions allowed or reallowed or paid to dealers and any securities exchanges
on which the
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<PAGE>
Debt Securities of such series may be listed.
The distribution of the Debt Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
If underwriters are used in the sale, the Debt Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price, or at varying prices determined at the time of
sale. The Debt Securities may be offered to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate. Unless otherwise set forth in the related Prospectus Supplement, the
obligations of the underwriters to purchase Debt Securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all the Debt Securities of a series if any are purchased. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
If a dealer is utilized in the sale of the Debt Securities in respect
of which this Prospectus is delivered, the Company will sell such Debt
Securities to the public at varying prices to be determined by such dealer at
the time of resale. In the case of a sale to a dealer, the Company will provide
a Prospectus Supplement stating the name of such dealer, the amount of Debt
Securities purchased and the price paid.
Offers to purchase Debt Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Any such
agent, which may be deemed to be an underwriter as that term is defined in the
Securities Act, involved in the offer or sale of the Debt Securities in respect
of which this Prospectus is delivered will be named in, and any commissions
payable by the Company to such agent will be set forth in, a Prospectus
Supplement. Unless otherwise indicated in such Prospectus Supplement, any such
agent will be acting on a best efforts basis.
Agents and underwriters may from time to time purchase and sell Debt
Securities in the secondary market, but are not obligated to do so, and there
can be no assurance that there will be a secondary market for the Debt
Securities or liquidity in the secondary market if one develops. From time to
time, agents and underwriters may make a market in the Debt Securities.
Dealers, underwriters or agents may be entitled under agreements which
may be entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act. Such
dealers, underwriters or agents may be customers of, engage in transactions
with, or perform services for, the Company in the ordinary course of business.
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<PAGE>
The place and time of delivery for the Debt Securities in respect of
which this Prospectus is delivered will be set forth in the accompanying
Prospectus Supplement.
LEGAL OPINIONS
The validity of the Notes will be passed upon for Manor Care by Cahill
Gordon & Reindel (a partnership including a professional corporation), New York,
New York, and for the Agents by Simpson Thacher & Bartlett (a partnership which
includes professional corporations) New York, New York.
EXPERTS
The consolidated financial statements and schedules of Manor Care,
Inc. and subsidiaries incorporated by reference in this Prospectus and elsewhere
in this Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Securities and Exchange Commission filing fee $75,758
Fees of Trustee....................................... 80,000
Legal fees and expenses............................... 135,000
Accounting fees and expenses.......................... 30,000
Printing and engraving expenses....................... 75,000
Blue Sky fees and expenses............................ 10,000
Fees of rating agencies............................... 90,000
Miscellaneous......................................... 10,000
--------
Total......................................... $505,758
========
- --------------------------
* All amounts except SEC Registration Fee are estimated.
Item 15. Indemnification of Officers and Directors.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in summary, that directors and officers of Delaware
corporations such as the Registrant are entitled, under certain circumstances,
to be indemnified against all expenses and liabilities (including attorneys'
fees) incurred by them as a result of suits brought against them in their
capacity as a director or officer, if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that despite the
adjudication of liability but in view of all the circumstances of the case, they
are fairly and reasonably entitled to indemnity for such expenses which such
court shall deem proper. Any such indemnification may be made by the corporation
only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct. Article VII of the
Registrant's By-Laws entitles officers, directors and controlling persons of the
Registrant to indemnification to the full extent permitted by Section 145 of
DGCL, as the same may be supplemented or amended from time to time.
Article VII of the Bylaws of Manor Care, Inc. provides:
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INDEMNIFICATION OF
OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
Section 1. Action, Other Than by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation, whether civil, criminal or administrative,
and whether external or internal to the Corporation (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or trustee of the
Corporation, or that, being or having been such a director, officer, employee or
trustee, he is or was serving at the request of the Corporation as a director,
officer, employee, trustee or agent of another corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to hereafter
as an "Agent"), against expenses (including attorneys' fees), judgements, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding, or any appeal therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding -- whether by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent -- shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 2. Action, by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed judicial action or suit
brought by or in the right of the Corporation to procure a judgement in its
favor by reason of the fact that he is or was an Agent (as defined above)
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense, settlement or appeal of such action or suit
if he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for gross negligence or misconduct in the
performance of the duty of the Corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or other such court shall deem proper.
Section 3. Determination of Right of Indemnification. Any
indemnification under Section 1 or 2 (unless ordered by a court) shall be made
by the Corporation unless a determination is reasonably and promptly made (i) by
the Board by a majority vote or a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs,
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<PAGE>
by independent legal counsel in a written opinion, or (iii) by the stockholders,
that such person acted in bad faith and in a manner that such person did not
believe to be in or not opposed to the best interests of the Corporation, or,
with respect to any criminal proceeding, that such person believed or had
reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without admission of liability, in defense of any proceeding or in
defense of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified against all
expenses incurred in connection therewith.
Section 5. Advances of Expenses. Except as limited by Section 6 of
this Article, expenses incurred in any action, suit, proceeding or investigation
or any appeal therein shall be paid by the Corporation in advance of the final
disposition of such matter, if the Agent shall undertake to repay such amount in
the event that it is ultimately determined, as provided herein, that such person
is not entitled to indemnification. Notwithstanding the foregoing, no advance
shall be made by the Corporation if a determination is reasonably and promptly
made by the Board of Directors by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel in a
written opinion, that, based upon the facts known to the Board or counsel at the
time such determination is made, such person acted in bad faith and in a manner
that such person did not believe to be in or not opposed to the best interests
of the Corporation, or, with respect to any criminal proceeding, that such
person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Board or independent
legal counsel reasonably determines that such person deliberately breached his
duty to the Corporation or its shareholders.
Section 6. Right of Agent to Indemnification Upon Application;
Procedure Upon Application. Any indemnification under Sections 1, 2, and 4, or
advance under Section 5 of this Article, shall be made promptly, and in any
event within ninety days, upon the written request of the Agent, unless with
respect to applications under Sections 1, 2, and 5, a determination is
reasonably and promptly made by the Board of Directors by a majority vote of a
quorum of disinterested directors that such Agent acted in a manner set forth in
such Sections as to justify the Corporation's not indemnifying or making an
advance to the Agent. In the event no quorum of disinterested directors is
obtainable, the Board of Directors shall promptly direct that independent legal
counsel shall decide whether the Agent acted in the manner set forth in such
Sections as to justify the Corporation's not indemnifying or making an advance
to the Agent. The right to indemnification or advances as granted by this
Article shall be enforceable by the Agent in any court of competent
jurisdiction, if the Board or independent legal counsel denies the claim, in
whole or in part, or if no disposition of such claim is made within ninety days.
The Agent's expenses incurred in connection with successfully establishing his
right to indemnification, in whole or in part, in any such proceeding shall also
be indemnified by the Corporation.
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<PAGE>
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in this
Article is held by a court of competent jurisdiction to be unavailable to an
indemnitee in whole or in part, the Corporation shall, in such an event, after
taking into account, among other things, contributions by other directors and
officers of the Corporation pursuant to indemnification agreements or otherwise,
and in the absence of personal enrichment, acts of intentional fraud or
dishonesty or criminal conduct on the part of the agent, contribute to the
payment of Agent's losses to the extent that, after other contributions are
taken into account, such losses exceed: (i) in the case of a director of the
Corporation or any of its subsidiaries who is not an officer of the Corporation
or any of such subsidiaries, the amount of fees paid to him for serving as a
director during the 12 months preceding the commencement of the suit, proceeding
or investigation; or (ii) in the case of a director of the Corporation or any of
its subsidiaries who is also an officer of the Corporation or any of such
subsidiaries, the amount set forth in clause (i) plus 5% of the aggregate cash
compensation paid to said director for service in such office(s) during the 12
months preceding the commencement of the suit, proceeding or investigation; or
(iii) in the case of an officer of the Corporation or any of the subsidiaries,
5% of the aggregate cash compensation paid to such officer for service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
Section 8. Other Rights and Remedies. The indemnification provided by
this Article shall not be deemed exclusive of, and shall not affect, any other
rights to which an Agent seeking indemnification may be entitled under any
Bylaws, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be an Agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. All rights to indemnification under this
Article shall be deemed to be provided by a contract between the Corporation and
the Agent who serves in such capacity at any time while these bylaws and other
relevant provisions of the general corporation law and other modification
thereof shall not affect any rights or obligations then existing.
Section 9. Insurance. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was an Agent against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article. The Corporation may create a trust fund, grant a
security interest or use other means (including, without limitation, a letter of
credit) to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 10. Constituent Corporations. For the purposes of this
Article, references to "the Corporation" include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation, so that any person who is or was a director, officer, employee, or
trustee of such a constituent corporation or who, being or having been such a
director, officer, employee or trustee, is or was serving at the request of such
constituent
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<PAGE>
corporation as a director, officer, employee, trustee of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article with respect to the resulting or
surviving corporation as he would if he had served the resulting or surviving
corporation in the same capacity.
Section 11. Other Enterprises, Fines, and Serving at Corporation's
Request. For purposes of this Article, references to "other enterprises" in
Sections 1 and 7 shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee or
agent of the Corporation which imposes duties on, or involves services by, such
Agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interests of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
Section 12. Savings Clause. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent as to expenses
(including attorneys' fees), judgements, fines and amounts paid in settlement
with respect to any action, suit, appeal, proceeding or investigation, whether
civil, criminal or administrative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated, or by any other applicable law.
The Registrant has entered into separate indemnification agreements
with directors and officers of the Registrant, pursuant to which the Registrant
will indemnify such directors and officers to the fullest extent permitted by
Delaware law, as the same may be amended from time to time.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant
has been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
Item 17. Undertaking.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post- effective amendment to this Registration Statement;
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<PAGE>
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(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;
(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 paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in the
periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
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.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of
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<PAGE>
1933 and will be governed by the final adjudication of such issue. The
undertaking of the Registrant in the preceding sentence does not apply to
insurance against liability arising under the Securities Act of 1933.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Gaithersburg, State of Maryland, on this 7th day
of November, 1996.
MANOR CARE, INC.
By: /s/ James H. Rempe
-----------------------
James H. Rempe
Secretary
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes Stewart
Bainum, Jr. and James H. Rempe, and each of them singly, such person's true and
lawful attorney, each with full power of substitution to sign, for such person
and in such person's name and capacity indicated below, any and all amendments
to this Registration Statement, hereby ratifying and confirming such person's
signature as it may be signed by said attorneys to any and all amendments.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ Stewart Bainum, Jr. Chairman, President, November 7, 1996
- ------------------------------
Stewart Bainum, Jr. Chief Executive Officer
and Director
(Principal Executive
Officer)
/s/ Stewart Bainum Vice Chairman and November 7, 1996
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Stewart Bainum Director
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<PAGE>
Signature Title Date
/s/ Kennett L. Simmons Director November 7, 1996
- ------------------------------
Kennett L. Simmons
Director November 7, 1996
- ------------------------------
Regina E. Herzlinger
/s/ William H. Longfield Director November 5, 1996
- ------------------------------
William H. Longfield
/s/ Frederick V. Malek Director November 7, 1996
- ------------------------------
Frederick V. Malek
/s/ Jerry E. Robertson Director November 7, 1996
- ------------------------------
Jerry E. Robertson
/s/ Leigh C. Comas Treasurer (Principal November 7, 1996
- ------------------------------
Leigh C. Comas Financial Officer)
/s/ Margarita A. Schoendorfer Vice President and Controller November 7, 1996
- ------------------------------
Margarita A. Schoendorfer (Principal Accounting Officer)
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<PAGE>
EXHIBIT INDEX
Exhibit
1 Form of Underwriting Agreement
4(a) Form of Indenture between the Company and The Chase Manhattan Bank
4(b) Form of Debt Security (see Exhibits to Exhibit 4(a) above)
5 Opinion of Cahill Gordon & Reindel, counsel for the Company
12 Statement regarding computation of ratio of earnings to fixed charges
24(a) Consent of Cahill Gordon & Reindel (filed with Exhibit 5)
24(b) Consent of Arthur Andersen LLP
25 Power of Attorney (appears on signature page)
26 Form T-1 Statement of Eligibility of The Chase Manhattan Bank, Trustee
II-10
MANOR CARE, INC.
DEBT SECURITIES
STANDARD UNDERWRITING AGREEMENT PROVISIONS
Manor Care, Inc., a Delaware corporation (the "Company"), confirms its
agreement with each of you (individually, an "Agent" and collectively, the
"Agents") with respect to the issuance and sale by the Company of up to an
aggregate of $ 250,000,000* in gross proceeds of its Medium-Term Notes, Series A
(the "Notes"). The Notes are to be issued from time to time pursuant to an
indenture, dated as of ______ __, 1996 (as it may be supplemented or amended
from time to time, the "Indenture"), between the Company and [name of trustee],
as trustee (the "Trustee").
The Notes shall have the maturity ranges, applicable interest rates or
interest rate formulas, specified currency, issue price, redemption and
repayment provisions and other terms set forth in the Prospectus referred to in
Section 1(a) as it may be amended or supplemented from time to time, including
any supplement providing for the interest rate, maturity and other terms of any
Note (a "Pricing Supplement"). The Notes will be issued, and the terms thereof
established, from time to time, by the Company in accordance with the Indenture
and the Procedures referred to below. This Agreement shall only apply to sales
of the Notes and not to sales of any other securities or evidences of
indebtedness of the Company and only on the specific terms set forth herein.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell its Notes directly on its own
behalf, and to designate and select additional agents in accordance with Section
2(a), the Company hereby (i) appoints each of the Agents as the agent of the
Company for the purpose of soliciting and receiving offers to purchase Notes
from the Company and (ii) agrees that whenever the Company determines to sell
Notes directly to an Agent as principal it will enter into a separate agreement
(each a "Purchase Agreement"). Each such Purchase Agreement, whether oral (and
confirmed in writing, which may be by facsimile transmission) or in writing,
shall be with respect to such information (as applicable) as specified in
Exhibit C hereto, relating to such sale in accordance with Section 2(e) hereof.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Agent as of the date hereof, as of the
Closing Date (defined herein) and as of the times referred to in Sections 6(a)
and 6(b) hereof (the Closing Date and each such time being hereinafter sometimes
referred to as a "Representation Date"), as follows:
(a) A registration statement on Form S-3 (Registration No. 333- ) with
respect to the Notes (i) has been prepared by the Company in conformity with the
requirements of the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations (the "Rules and Regulations") of the U.S.
Securities and Exchange Commission (the "Commission") thereunder, (ii) has been
filed by the Company with the Commission under the Securities Act and (iii) has
become effective under the Securities Act. As provided in Section 3(b), a
prospectus supplement reflecting the terms of the Notes, the terms of the
offering thereof and the other matters set forth therein has been prepared and
will be filed pursuant
<PAGE>
2
to Rule 424 under the Securities Act. In addition, a preliminary prospectus
supplement reflecting the terms of the Notes, the terms of the offering thereof,
and the other matters set forth therein may also be prepared and filed pursuant
to Rule 424 under the Securities Act. Such prospectus supplement, in the form
filed pursuant to Rule 424, is herein referred to as the "Prospectus
Supplement", and any such preliminary prospectus supplement in the form filed
pursuant to Rule 424 is hereafter referred to as the "Preliminary Prospectus
Supplement". Any prospectus accompanied by a Preliminary Prospectus Supplement
is hereinafter referred to, collectively with such Preliminary Prospectus
Supplement, as a "Preliminary Prospectus." The registration statement referred
to in this Section 1(a), as amended at the time of the applicable Representation
Date, including the exhibits thereto and the documents incorporated by reference
therein, is herein called the "Registration Statement", and the basic prospectus
included therein relating to all offerings of securities under the Registration
Statement, as supplemented by the Prospectus Supplement and the Pricing
Supplement, is herein called the "Prospectus", except that, if such basic
prospectus is amended or supplemented on or prior to the date on which the
Prospectus Supplement is first filed pursuant to Rule 424, the term "Prospectus"
shall refer to the basic prospectus as so amended or supplemented and as
supplemented by the Prospectus Supplement, in either case including the
documents filed by the Company with the Commission pursuant to the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference therein. Any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual or
interim report of the Company or other documents filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement. The
Commission has not issued any order suspending the effectiveness of the
Registration Statement, and no stop-order has been initiated or threatened by
the Commission.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all material respects to the requirements of
the Securities Act, the Exchange Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission under such acts and did not include 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, and on the
applicable Representation Date and at all times during each period during which,
in the opinion of counsel for the Agents, a prospectus relating to the Notes is
required to be delivered under the Act (each a "Marketing Period"), the
Registration Statement and the Prospectus will conform in all material respects
to the requirements of the Securities Act, the Exchange Act, the Trust Indenture
Act and the Rules and Regulations, and none of such documents will include any
untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that the Company makes no representation or warranty as to
(i) that part of the Registration Statement that constitutes the Statement of
Eligibility and Qualification (the "Form T-1") under the Trust Indenture Act of
the Trustee under the Indenture or (ii) information contained in or omitted from
the Registration Statement or the Prospectus or any such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Agent specifically for inclusion therein.
(c) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and the Purchase Agreement (if any) and
perform its obligations hereunder and thereunder; each of this Agreement and the
Purchase Agreement (if any) has been duly authorized, executed and delivered by
the Company, constitutes the valid and binding agreement of the Company and is
enforceable against the Company in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law).
<PAGE>
3
(d) Neither the Company nor any of its "significant subsidiaries" (as
such term is defined in Regulation S-X of the Commission) is in violation of its
corporate charter or by-laws or in default under any agreement, indenture or
instrument, the effect of which violation or default would be material to the
Company or the Company and its significant subsidiaries, taken as a whole; the
execution, delivery and performance of this Agreement and each applicable
Purchase Agreement, if any, and compliance by the Company with the provisions of
the Indenture and the Notes will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its significant subsidiaries pursuant to the terms of, or
constitute a material default under, any material agreement, indenture or
instrument, or result in a violation of the corporate charter or by-laws of the
Company or any of its significant subsidiaries or any order, rule, or regulation
of any court or governmental agency having jurisdiction over the Company, any of
its significant subsidiaries or their respective properties; and except as
required by the Securities Act, the Trust Indenture Act and applicable state
securities laws, no consent, authorization or order of, or filing or
registration with, any court or governmental agency in the United States
(including any state regulatory agency having jurisdiction over the Company or
any of its significant subsidiaries), which has not been made or obtained, is
required for the execution, delivery and performance of this Agreement or each
applicable Purchase Agreement, if any, or compliance with the provisions of the
Indenture and the Notes by the Company.
(e) Except as described in or contemplated by the Registration
Statement and the Prospectus, there has not been any material adverse change in,
or any adverse development which materially affects, the business, properties,
financial condition, results of operations of the Company and its significant
subsidiaries taken as a whole from the dates as of which information is given in
the Registration Statement and the Prospectus.
(f) The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due execution and delivery thereof by the Trustee,
constitutes a valid and binding agreement of the Company and is enforceable
against the Company in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity or at
law); the Notes have been duly authorized by the Company, and, when the terms of
the Notes and of their issue and sale have been duly established in accordance
with the Indenture and this Agreement, and the Notes have been duly executed,
authenticated, issued and delivered against payment therefor as provided herein
and the Indenture, the Notes will be duly executed, duly authenticated, duly
issued and delivered by the Company, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and will be
enforceable against the Company in accordance with their terms and the terms of
the Indenture, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally or general equitable principles (whether
considered in a proceeding in equity or at law); and the Notes and the Indenture
will conform in all material respects to the descriptions thereof contained in
the Registration Statement and the Prospectus.
(g) The Company and each significant subsidiary of the Company (as
such term is defined in Regulation S-X or the Commission) has been duly
incorporated and is validly existing and in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which its ownership of
property or the conduct of its business requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its significant subsidiaries
taken as a whole, and has all power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged.
<PAGE>
4
(h) Except as described in the Registration Statement and the
Prospectus, there is no material litigation or governmental proceeding pending
or, to the knowledge of the Company, threatened against the Company or any of
its significant subsidiaries which might result in any material adverse change
in the business, properties, financial condition or results of operations of the
Company or of the Company and its subsidiaries taken as a whole, or which could
reasonably be expected to adversely affect the consummation of the transactions
contemplated hereby.
(i) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
SECTION 2. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL (a)
Appointment. Subject to the terms and conditions stated herein, the Company
hereby appoints each of the Agents as one of the exclusive agents of the Company
(subject to the provisions of the following paragraph) for the purpose of
soliciting or receiving offers to purchase the Notes from the Company by others.
On the basis of the representations and warranties contained herein, but subject
to the terms and conditions herein set forth, each Agent agrees, as one of the
exclusive agents of the Company (subject to the provisions of the following
paragraph), to use its reasonable efforts to solicit offers to purchase the
Notes upon the terms and conditions set forth in the Prospectus and the related
Prospectus Supplement. The Company may, from time to time, solicit or accept
offers to purchase Notes otherwise than through one of the Agents; provided,
however, that so long as this Agreement shall remain in effect, the Company
shall not, without the prior written consent of each Agent, solicit or accept
offers to purchase Notes through any additional agent other than an Agent,
unless such additional agent becomes a party to this Agreement, or an agreement
setting forth the same commissions and otherwise containing terms and conditions
that are substantially the same as those then in effect under this Agreement;
provided, further, that the Company expressly reserves the right to sell Notes
directly to investors, in which case the Agents shall not receive any commission
with respect to such sale. Each Agent also may purchase Notes from the Company
as principal for purposes of resale, as more fully described in paragraph (e) of
this Section.
(b) Suspension of Solicitation. The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to purchase the Notes
commencing at any time for any period of time or indefinitely. Upon receipt of
at least one business day's prior written notice from the Company, the Agents
will forthwith suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised the Agents that such solicitation may
be resumed. For the purpose of this agreement, "business day" shall mean any day
which is not a Saturday or Sunday and which is not a day on which (i) banking
institutions are generally authorized or obligated by law to close in The City
of New York and (ii) The New York Stock Exchange, Inc. is closed for trading.
Upon receipt of notice from the Company as contemplated by Section
3(d) or 3(k) hereof, each Agent shall suspend its solicitation of offers to
purchase Notes until such time as the Company shall have furnished it with an
amendment or supplement to the Registration Statement or the Prospectus, as the
case may be, contemplated by Section 3(d) or 3(k) and shall have advised such
Agent that such solicitation may be resumed.
(c) Agent's Commission. Promptly upon the closing of the sale of any
Notes sold by the Company as a result of a solicitation made by or offer to
purchase received by an Agent, the Company agrees to pay such Agent a
commission, in accordance with the schedule relating to the Notes set forth in
Exhibit A hereto.
(d) Solicitation of Offers. The Agents are authorized to solicit
offers to purchase the Notes only in denominations as are specified in the
Prospectus at a purchase price as shall be specified by the Company.
<PAGE>
5
Each Agent shall communicate to the Company, orally or in writing, each
reasonable offer to purchase Notes received by it as an Agent. The Company shall
have the sole right to accept offers to purchase the Notes and may reject any
such offer in whole or in part. Each Agent shall have the right, in its
discretion reasonably exercised without advising the Company, to reject any
offer to purchase the Notes received by it, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein.
No Note which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold by the
Company, until such Note shall have been delivered to the purchaser thereof
against payment by such purchaser.
In connection with the solicitation of offers to purchase Notes, the
Agents are not authorized to provide on behalf of the Company to any person any
written information relating to the Company other than the Prospectus and the
documents incorporated therein. No Note which the Company has agreed to sell
pursuant to this Agreement shall be deemed to have been purchased and paid for
or sold by the Company until such Note shall have been delivered to the
purchaser thereof against payment by such purchaser.
(e) Purchases as Principal. Each sale of Notes to any Agent as
principal, for resale to one or more investors or to another broker-dealer
(acting as principal for purposes of resale), shall be made in accordance with
the terms of this Agreement and a Purchase Agreement whether oral (and confirmed
in writing by such Agent to the Company, which may be by facsimile transmission)
or in writing, which will provide for the sale of such Notes to, and the
purchase thereof by, such Agent. A Purchase Agreement may also specify certain
provisions relating to the reoffering of such Notes by such Agent. The
commitment of any Agent to purchase Notes from the Company as principal shall be
deemed to have been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms and conditions
herein set forth. Each Purchase Agreement shall specify the principal amount and
terms of the Notes to be purchased by an Agent, the time and date (each such
time and date being referred to herein as a "Time of Delivery") and place of
delivery of and payment for such Notes and such other information (as
applicable) as is set forth in Exhibit C hereto. The Company agrees that if any
Agent purchases Notes as principal for resale such Agent shall receive such
compensation, in the form of a discount or otherwise, as shall be indicated in
the applicable Purchase Agreement or, if no compensation is indicated therein, a
commission in accordance with Exhibit A hereto. Any Agent may utilize a selling
or dealer group in connection with the resale of such Notes. In addition, the
Agents may offer the Notes they have purchased as principal to other dealers.
Any Agent may sell Notes to any dealer at a discount. Such Purchase Agreement
shall also specify any requirements for delivery of opinions of counsel,
accountant's letters and officers' certificates pursuant to Section 5 hereof.
(f) Administrative Procedures. Administrative procedures respecting
the sale of Notes (the "Procedures") are set forth in Exhibit B hereto and may
be amended in writing from time to time by the Agents and the Company. Each
Agent and the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them herein and in the
Procedures. The Procedures shall apply to all transactions contemplated
hereunder including sales of Notes to any Agent as principal pursuant to a
Purchase Agreement, unless otherwise set forth in such Purchase Agreement.
(g) Delivery of Documents. The documents required to be delivered by
Section 5 hereof shall be delivered at the offices of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017, not later than 10:00
A.M., New York City time, on the date of this Agreement or at such later time as
may be mutually agreed upon by the Company and the Agents, which in no event
shall be later than the time at which the Agents commence solicitation of offers
to purchase Notes hereunder (the "Closing Date").
<PAGE>
6
SECTION 3. COVENANTS OF THE COMPANY
The Company agrees to furnish promptly to Simpson Thacher & Bartlett,
counsel for the Agents, one signed copy of the Registration Statement, including
all exhibits, in the form it became effective and of all amendments thereto and,
in connection with each offering of Notes, the Company further agrees:
(a) Delivery of Signed Registration Statement and Other Documents. To
deliver promptly to each Agent and counsel to the Agents such number of
conformed copies of the Registration Statement as originally filed and each
amendment thereto (in each case excluding exhibits other than the computation of
the ratio of earnings to fixed charges, the Indenture and this Agreement) and of
each Preliminary Prospectus, the Prospectus and any documents incorporated by
reference in the Preliminary Prospectus or Prospectus (excluding exhibits
thereto) and any amended or supplemented Prospectus, as each Agent and counsel
to the Agents may reasonably request;
(b) Commission Filings. To prepare a Prospectus Supplement relating to
the Notes in a form approved by the Agents and to file the Prospectus, including
the Prospectus Supplement and any Pricing Supplement, with the Commission
pursuant to the applicable provisions of Rule 424(b) of the Rules and
Regulations within the time period and, during any Marketing Period, (i) to file
any amendment to the Registration Statement or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the Agents, be required
by the Securities Act or requested by the Commission, (ii) to file under the
Exchange Act any document incorporated by reference in the Prospectus that may,
in the reasonable judgment of the Company or the Agents, be required by the
Securities Act or requested by the Commission and (iii) to file promptly with
the Commission all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus;
(c) Copies of Filings with Commission. Prior to filing with the
Commission during any Marketing Period any amendment to the Registration
Statement, supplement to the Prospectus, any document incorporated by reference
in the Prospectus, or to filing any Prospectus pursuant to Rule 424(b)(1),
(b)(3) or (b)(4) of the Rules and Regulations, to furnish a copy thereof to the
Agents and counsel for the Agents and obtain the consent of the Agents to the
filing;
(d) Notice to Agents of Certain Events. To advise the Agents and
counsel to the Agents promptly (i) when any post-effective amendment to the
Registration Statement becomes effective, (ii) of any request or proposed
request by the Commission for an amendment to the Registration Statement, a
supplement to the Prospectus or any additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threat of any stop order proceeding,
(iv) of receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction or the
initiation or threat of any proceeding for that purpose, (v) of any downgrading
in the rating accorded the Notes or any other debt securities of the Company, or
any proposal to downgrade the rating of the Notes or any other debt securities
of the Company, by any "nationally recognized statistical rating organization",
as that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations, or of any public announcement that any such organization
has under surveillance or review, with possible negative implications, its
rating of the Notes or any of the Company's debt securities as soon as the
Company learns of such downgrading, proposal to downgrade or public announcement
and (vi) of the happening of any event which makes untrue any statement of a
material fact made in the Registration Statement or the Prospectus, or which
requires the making of a change in the Registration Statement or the Prospectus
in order to make any material statement therein not misleading;
<PAGE>
7
(e) Stop Orders. If, during any Marketing Period, the Commission shall
issue a stop order suspending the effectiveness of the Registration Statement,
suspending or preventing the use of any Preliminary Prospectus or Prospectuses,
or if the qualification of the Notes for sale in any jurisdiction shall be
suspended, to make every reasonable effort to obtain the lifting of that order
or suspension at the earliest possible time;
(f) Earnings Statements. As soon as practicable after the date of each
acceptance by the Company of an offer to purchase Notes hereunder, to make
generally available to its security holders and to the Agents an earning
statement of the Company and its subsidiaries, conforming with the requirements
of Section 11(a) of the Securities Act (including, at the option of the Company,
Rule 158), covering a period of at least 12 months beginning on the first day of
the first fiscal quarter of the Company commencing after the later of (i) the
effective date of the Registration Statement, (ii) the effective date of the
most recent post-effective amendment to the Registration Statement to become
effective prior to the date of such acceptance and (iii) the date of the
Company's most recent Annual Report on Form 10-K filed with the Commission prior
to the date of such acceptance;
(g) Copies of Reports, Releases and Financial Statements. For a period
expiring on the earlier of (i) three years after the applicable Representation
Date, or (ii) the last date upon which any Note sold pursuant to this Agreement
are outstanding, provided that with respect to (ii) only, all of the Notes which
may be sold pursuant to this Agreement have been sold, to furnish to the Agents
copies of all public reports and all reports and financial statements furnished
by the Company to the principal national securities exchange or quotation system
upon which its Common Stock may be listed pursuant to the requirements of or
agreements with such exchange or system or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(h) Blue Sky Qualifications. Promptly from time to time to take such
action as the Agents may reasonably request to qualify the Notes for offering
and sale under the securities laws of such jurisdictions as the Agents 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 Notes; 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 or to subject itself
to taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
(i) Holdback. Between the date of any Purchase Agreement and the date
of delivery of the Notes with respect thereto, the Company will not offer or
sell, or enter into any agreement to sell, without the prior written consent of
each Agent which is party to such Purchase Agreement, any senior debt securities
of the Company, other than borrowings under the Company's revolving credit
agreements and lines of credit, the private placement of securities and
issuances of its commercial paper;
(j) Use of Proceeds. To apply the net proceeds from the sale of the
Notes being sold by the Company as set forth in the Prospectus.
(k) Revisions to Prospectus - Material Changes. If, during any
Marketing Period, any event occurs as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made when the Prospectus was delivered, not misleading, or
if it is necessary at any time to amend any Prospectus to comply with the
Securities Act, to notify the Agents promptly, in writing, to suspend
solicitation of purchases of the Notes; and if the Company shall decide to amend
or supplement the Registration Statement or any Prospectus, to promptly advise
the Agents by telephone (with confirmation in writing) and to promptly, in
writing, prepare and file with the Commission an amendment or supplement which
will correct such statement or omission or an amendment which will effect such
<PAGE>
8
compliance; provided, however, that if during the period referred to above any
Agent shall own any Notes which it has purchased from the Company as principal
with the intention of reselling them, the Company shall promptly prepare and
timely file with the Commission any amendment or supplement to the Registration
Statement or any Prospectus that may, in the judgment of the Company or the
Agents, be required by the Securities Act or requested by the Commission.
(l) Pricing Supplement. To prepare, with respect to any Notes to be
sold through or to the Agents pursuant to this Agreement, a Pricing Supplement
with respect to such Notes in a form previously approved by the Agents and to
file such Pricing Supplement pursuant to Rule 424 under the Securities Act with
the Commission, in each case, within the applicable time period prescribed for
such filing by the Rules and Regulations.
SECTION 4. PAYMENT OF EXPENSES
The Company will pay:
(i) the costs incident to the authorization, issuance, sale and
delivery of the Notes and any taxes payable in that connection,
(ii) the costs incident to the preparation, printing and filing under
the Securities Act of the Registration Statement and any amendments and exhibits
thereto,
(iii) the costs incident to the preparation, printing and filing of
any document and any amendments and exhibits thereto required to be filed by the
Company under the Exchange Act,
(iv) the reasonable costs of distributing the Registration Statement,
as originally filed, and each amendment and post-effective amendment thereof
(including exhibits), the basic prospectus included in the Registration
Statement, each Prospectus, any supplement or amendment to any Prospectus and
any documents incorporated by reference in any of the foregoing documents,
(v) the fees and disbursements of the Trustee, any paying agent, any
calculation agent, any exchange rate agent and any other agents appointed by the
Company, and their respective counsel,
(vi) the costs and fees in connection with the listing of the Notes on
any securities exchange,
(vii) the cost and fees in connection with any filings with the
National Association of Securities Dealers, Inc.,
(viii) the fees and disbursements of counsel to the Company,
(ix) the reasonable fees and disbursements of Counsel to the Agents in
an amount previously approved by the Company,
(x) the fees paid to rating agencies in connection with the rating of
the Notes,
(xi) the fees and expenses of qualifying the Notes under the
securities laws of the several jurisdictions as provided in Section 3(h) hereof
and of preparing and printing a Blue Sky Memorandum (including fees and expenses
of counsel for the Company in connection therewith),
(xii) all advertising expenses in connection with the offering of the
Notes incurred with the consent of the Company, and
(xiii) all other costs and expenses arising out of the transactions
contemplated hereunder and incident to the performance of the Company's
obligations under this Agreement.
<PAGE>
9
SECTION 5. CONDITIONS OF OBLIGATIONS OF AGENT
The obligation of the Agents, as the agents of the Company, under this
Agreement to solicit offers to purchase the Notes, the obligation of any person
who has agreed to purchase Notes to make payment for and take delivery of Notes,
and the obligation of any Agent to purchase Notes pursuant to any Purchase
Agreement, is subject to the accuracy, on each Representation Date, of the
representations and warranties of the Company contained herein, to the accuracy
of the statements of the Company's officers made in any certificate furnished
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) Registration Statement. The Prospectus as amended or supplemented
(including the Pricing Supplement) with respect to such Notes shall have been
filed with the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the Rules and Regulations
and in accordance with Section 3(l) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof nor any order
directed to any document incorporated by reference in any Prospectus shall have
been issued and no stop order proceeding shall have been initiated or threatened
by the Commission and no challenge shall have been made to the accuracy or
adequacy of any document incorporated by reference in any Prospectus; any
request of the Commission for inclusion of additional information in the
Registration Statement or any Prospectus or otherwise shall have been complied
with.
(b) No Suspension of Sale of the Notes. No order suspending the sale
of the Notes in any jurisdiction designated by the Agents pursuant to Section
3(h) hereof shall have been issued, and no proceeding for that purpose shall
have been initiated or threatened.
(c) No Material Omissions or Untrue Statements. No Agent shall have
discovered and disclosed to the Company that the Registration Statement or any
Prospectus contains an untrue statement of a fact which, in the opinion of
counsel for the Agents, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(d) Legal Matters Satisfactory to Counsel. All corporate proceedings
and other legal matters incident to the authorization, form and validity of this
Agreement, the Notes, the Indenture, the form of the Registration Statement,
each Prospectus (other than financial statements and other financial data) and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all respects to counsel for the
Agents and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters, and counsel to the Agents shall have furnished the Agents their
favorable opinion with respect to such matters and such additional matters as
the Agents may reasonably request.
(e) Opinions of Company Counsel. At the Closing Date, the Agents shall
have received (1) the opinion, addressed to the Agents and dated the Closing
Date, of Cahill Gordon & Reindel, outside counsel to the Company, in form and
substance satisfactory to the Agents and their counsel, substantially to the
effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to own its
properties and to conduct its business as described in the Prospectus;
(ii) The Company has all necessary corporate power to execute
and deliver this Agreement and the Purchase Agreement (if any) and to
perform its obligations hereunder and thereunder;
<PAGE>
10
(iii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture Act
and, when executed by the Trustee, will constitute a valid and binding
agreement of the Company, enforceable in accordance with its terms, except
as enforceability thereof may be limited by the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity
or at law);
(iv) The Notes have been duly authorized, and assuming due
execution, authentication and delivery of the Notes in accordance with the
provisions of the Indenture and delivery of and payment for the Notes in
accordance with this Agreement and the Purchase Agreement (if any), will
constitute valid and binding obligations of the Company, entitled to the
benefits of the Indenture, enforceable in accordance with their terms,
except as enforceability thereof may be limited by the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a
proceeding in equity or at law);
(v) The Notes and the Indenture conform in all material
respects to the statements concerning them in the Registration Statement
and the Prospectus;
(vi) The Registration Statement, has been declared effective
under the Securities Act; any required filing of the Prospectus pursuant
to Rule 424(b) of the Rules and Regulations has been made within the time
period required by Rule 424(b) of the Rules and Regulations; and no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or, to the knowledge
of such counsel, threatened by the Commission;
(vii) The Registration Statement, as of its effective date, and
the Registration Statement and the Prospectus, as of the date hereof
(other than the financial statements and related schedules and statistical
information of a financial nature contained in or incorporated therein, as
to which such counsel have not been asked to, and do not express any
opinion) comply as to form in all material respects with the requirements
of the Securities Act and the Rules and Regulations thereunder, and any
further amendment or supplement to any such incorporated document made by
the Company prior to the Closing Date (other than the financial statements
and related schedules and statistical information of a financial nature
contained in or incorporated therein, as to which such counsel have not
been asked to, and do not express any opinion), when they became effective
complied as to form in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and
(viii) Each of this Agreement and the Purchase Agreement (if
any) has been duly authorized, executed and delivered by the Company. The
execution, delivery and performance by the Company of this Agreement and
the Purchase Agreement (if any), and the compliance by the Company with
the provisions of the Indenture and the Notes, will not conflict with or
result in a violation of the corporate charter or by-laws of the Company,
or any law, rule or regulation (other than laws and regulations relating
to hospitals and nursing centers or the regulation of businesses ancillary
thereto and state securities laws, as to which such counsel have not been
asked to, and do not express any opinion) or to such counsel's knowledge
without independent investigation, conflict with or result in the
violation of any order or determination of any arbitrator, court or
governmental agency having jurisdiction over the Company or any of the
Company's subsidiaries the effect of which would be material and adverse
to the Company and its subsidiaries taken as a whole. Except as required
by the Securities Act, the Exchange Act, the Trust Indenture Act or
applicable state or foreign securities laws and the National Association
of Securities Dealers, Inc. (as to which such counsel have not been asked
to, and do not express any opinion), no consent, approval, authorization
or order of, or filing
<PAGE>
11
or registration with, any court or governmental agency in the United
States, which has not been made or obtained, is required for the
execution, delivery and performance of this Agreement and the Purchase
Agreement (if any), and compliance with the provisions of the Indenture
and the Notes by the Company, except to the extent that failure to make or
maintain such consents, approvals, authorizations, orders or filings, will
not, individually or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Delaware. Such counsel shall also have furnished to the Agents a statement,
addressed to the Agents, dated the Closing Date to the effect that (i) such
counsel has participated in conferences, by person or by telephone, with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company and representatives of the Agents
and the Agents' counsel, at which the contents of the Registration Statement and
Prospectus and related matters were discussed and acted as counsel to the
Company only in connection with the preparation of the Registration Statement;
such counsel did not participate in the preparation of the documents
incorporated by reference in the Registration Statement or the Prospectus
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act and did
not review them prior to their filing. Without passing upon or assuming any
responsibility for the accuracy, completeness, or fairness of the statements
contained in the Registration Statement and Prospectus, such counsel shall state
that based on the foregoing, (relying as to materiality to a large extent upon
the opinions of officers and other representatives of the Company) no facts have
come to the attention of such counsel which lead them to believe that at the
time that the Registration Statement became effective and at the Closing Date
the Registration Statement (other than the financial statements, related
schedules and statistical information of a financial nature contained or
incorporated therein, as to which such counsel are not called upon to express a
belief), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus, as of its date and at
the Closing Date, including any document incorporated by reference in the
Prospectus (other than the financial statements, related schedules and
statistical information of a financial nature contained or incorporated therein,
as to which such counsel are not called upon to express a belief), as amended
and supplemented, if applicable, contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; and
(2) The opinion, addressed to the Agents and dated the Closing Date, of James H.
Rempe, General Counsel of the Company, in form and substance satisfactory to the
Agents and their counsel, to the effect that:
(i) Each "significant subsidiary" of the Company (as such term
is defined in Regulation S-X) has been duly incorporated and is validly
existing and in good standing under the laws of its respective
jurisdiction of incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in all jurisdictions in which its
ownership of property or the conduct of its business requires such
qualification (except where the failure so to qualify would not have a
material adverse effect upon the Company or the Company and its
subsidiaries taken as a whole), and has all power and authority necessary
to own its properties and to conduct the business in which it is
<PAGE>
12
engaged as described in the Prospectus except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole; and
(ii) The documents incorporated by reference in the Prospectus,
when they became effective or were filed (or, if an amendment with respect
to any such document was filed, when such amendment was filed) with the
Commission, complied as to form in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and
the rules and regulations thereunder (except as to the financial
statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel
need express no opinion).
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of Maryland and the General Corporation Law of Delaware.
(f) Officers' Certificate. The Company shall have furnished to the
Agents on the Closing Date a certificate, dated the Closing Date, signed on
behalf of the Company by its President or any Vice-President of the Company and
by a principal financial or accounting officer of the Company, stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 hereof are true and correct as of the Closing Date;
the Company has complied with all its agreements contained herein; and the
conditions on its part to be fulfilled prior to the Closing Date set forth
herein have been fulfilled;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or threatened; and
(iii) There has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries taken as a whole except as
set forth or contemplated by the Prospectus.
(g) Accountant's Letter. The Company shall have furnished to the
Agents on the Closing Date a letter of Arthur Andersen LLP, addressed jointly to
the Company and the Agents and dated the Closing Date, of the type described in
the American Institute of Certified Public Accountants' Statement on Auditing
Standards No. 72, covering such specified financial statement items and
procedures as the Agents may reasonably request and in form and substance
reasonably satisfactory to the Agents.
(h) Additional Conditions. There shall not have occurred: (a) any
downgrading in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations,
(b) any public announcement that any such organization has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities, (c) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, The American Stock
Exchange, the Chicago Board Options Exchange or the over-the-counter market or
the establishment of minimum prices on one or more of such exchanges or such
market by the Commission or such exchange or other regulatory body or
governmental authority having jurisdiction, (d) a banking moratorium declared by
United States federal or New York State authorities, (e) a declaration of a
national emergency or war by the United States, (f) any outbreak or escalation
in hostilities involving the United States or any material adverse change in
national or international political, financial or economic conditions, national
or international equity markets or currency exchange rates or controls as to
make it, in the judgment of the Agents, inadvisable or impracticable to proceed
with the solicitation of offers to purchase Notes or the purchase of Notes from
the Company as principal pursuant to the applicable Purchase Agreement, as the
<PAGE>
13
case may be, or (g)(i) the Company or any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material 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
or (ii) since such date there shall have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any 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 its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is, in the judgment of the Agents, so material and adverse as to make it
impracticable or inadvisable to proceed with the solicitation of offers to
purchase Notes or the purchase of Notes from the Company as principal pursuant
to the applicable Purchase Agreement, as the case may be.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are substantially in the form set forth above
and, if not, or if no particular form is set forth above, only if they are in
form and substance reasonably satisfactory to counsel for the Agents.
SECTION 6. ADDITIONAL COVENANTS OF THE COMPANY.
The Company covenants and agrees that:
(a) Acceptance of Offer Affirms Representations and Warranties. Each
acceptance by it of an offer for the purchase of Notes shall be deemed to be an
affirmation that the representations and warranties of the Company contained in
this Agreement and in any certificate theretofore given to the Agents pursuant
hereto are true and correct at the time of such acceptance, and an undertaking
that such representations and warranties will be true and correct at the time of
delivery to the purchaser or such purchaser's agent of the Notes relating to
such acceptance as though made at and as of each such time (and such
representations and warranties shall relate to the Registration Statement and
the Prospectus as amended or supplemented to each such time).
(b) Subsequent Delivery of Officers' Certificates. The Company agrees
that during each Marketing Period, each time that the Registration Statement or
any Prospectus shall be amended or supplemented (other than by a Pricing
Supplement providing solely for the interest rates or maturities of the Notes or
the principal amount of Notes remaining to be sold or similar changes), each
time the Company sells Notes to an Agent as principal and the applicable
Purchase Agreement specifies the delivery of an officers' certificate under this
Section 6(b) as a condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any document incorporated by
reference into any Prospectus, the Company shall submit to the Agents a
certificate, (i) as of the date of such amendment, supplement, Time of Delivery
relating to such sale or filing or (ii) if such amendment, supplement or filing
was not filed during a Marketing Period, as of the first day of the next
succeeding Marketing Period, representing that the statements contained in the
certificate referred to in Section 5(f) hereof which was last furnished to the
Agents are true and correct at the time of such amendment, supplement or filing,
as the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and each
Prospectus as amended and supplemented to such time).
(c) Subsequent Delivery of Legal Opinions. The Company agrees that
during each Marketing Period, each time that the Registration Statement or any
Prospectus shall be amended or supplemented (other than by a Pricing Supplement
providing solely for the interest rates or maturities of the Notes or the
principal amount of Notes remaining to be sold or similar changes), each time
the Company sells Notes to an Agent as principal and the applicable Purchase
Agreement specifies the delivery of a legal
<PAGE>
14
opinion under this Section 6(c) as a condition to the purchase of Notes pursuant
to such Purchase Agreement or the Company files with the Commission any document
incorporated by reference into any Prospectus, the Company shall, (i)
concurrently with such amendment, supplement, Time of Delivery relating to such
sale or filing or (ii) if such amendment, supplement or filing was not filed
during a Marketing Period, on the first day of the next succeeding Marketing
Period, furnish the Agents and their counsel with the written opinion of General
Counsel to the Company, addressed to the Agents and dated the date of delivery
of such opinion, in form satisfactory to the Agents, to the same effect as the
opinions referred to in Section 5(e)(1) and 5(e)(2) hereof, but modified, as
necessary, to relate to the Registration Statement and each Prospectus as
amended or supplemented to the time of delivery of such opinion; provided,
however, that in lieu of such opinion, such counsel may furnish the Agents with
a letter to the effect that the Agents may rely on such prior opinion to the
same extent as if it were dated the date of such letter authorizing reliance
(except that statements in such prior opinion shall be deemed to relate to the
Registration Statement and each Prospectus as amended or supplemented to the
time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Accountant's Letters. The Company agrees
that during each Marketing Period, each time that the Registration Statement or
any Prospectus shall be amended or supplemented to include additional financial
information, each time the Company sells Notes to an Agent as principal and the
applicable Purchase Agreement specifies the delivery of a letter under this
Section 6(d) as a condition to the purchase of Notes pursuant to such Purchase
Agreement or the Company files with the Commission any document incorporated by
reference into any Prospectus which contains additional financial information,
the Company shall cause Arthur Andersen LLP (or other independent accounts of
the Company acceptable to the Agents) to furnish the Agents, (i) concurrently
with such amendment, supplement, Time of Delivery relating to such sale or
filing or (ii) if such amendment, supplement, or filing was not filed during a
Marketing Period, on the first day of the next succeeding Marketing Period, a
letter, addressed jointly to the Company and the Agents and dated the date of
delivery of such letter, in form and substance reasonably satisfactory to the
Agents, to the same effect as the letter referred to in Section 5(g) hereof but
modified to relate to the Registration Statement and each Prospectus, as amended
and supplemented to the date of such letter, with such changes as may be
necessary to reflect changes in the financial statements and other information
derived from the accounting records of the Company; provided, however, that if
the Registration Statement or any Prospectus is amended or supplemented solely
to include financial information as of and for a fiscal quarter, such
accountants may limit the scope of such letter to the unaudited financial
statements included in such amendment or supplement unless there is contained
therein any other accounting, financial or statistical information that, in the
reasonable judgment of the Agents, should be covered by such letter, in which
event such letter shall also cover such other information.
(e) Opinion on Settlement Date. On any settlement date for the sale of
Notes, the Company shall, if requested by the Agent that solicited or received
the offer to purchase any Notes being delivered on such settlement date, furnish
such Agent with written opinions of counsel to the Company set forth in Section
5(e) hereof, each dated such settlement date, in form reasonably satisfactory to
such Agent, to the effect set forth in Section 5(e) hereof, but modified, as
necessary, to relate to the Prospectus relating to the Notes to be delivered on
such settlement date; provided, however, that in lieu of such opinion, such
counsel may furnish the Agents with a letter to the effect that the Agents may
rely on such prior opinion to the same extent as if it were dated such
settlement date (except that statements in such prior opinion shall be deemed to
relate to the Registration Statement and such Prospectus as amended or
supplemented to the time of delivery of such letter authorizing reliance).
<PAGE>
15
SECTION 7. INDEMNIFICATION AND CONTRIBUTION
(a) The Company shall indemnify and hold harmless each Agent and each
person, if any, who controls any Agent within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, and any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of the Notes), to
which that Agent or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or the Registration Statement or
Prospectus as amended or supplemented, or (ii) 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 shall reimburse each Agent and
each such controlling person promptly upon demand for any legal and other
expenses reasonably incurred as incurred by that Agent or controlling person in
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto, made in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Agent specifically for inclusion
therein; and provided further that as to any Preliminary Prospectus this
indemnity agreement shall not inure to the benefit of any Agent or any person
controlling an Agent on account of any loss, claim, damage, liability or action
arising from the sale of Notes to any person by that Agent if that Agent failed
to send or give a copy of the Prospectus (or the Prospectus as amended or
supplemented) to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Notes to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability, unless such failure
resulted from non-compliance by the Company with Section 3(a) hereof. For
purposes of the last proviso to the immediately preceding sentence, the term
"Prospectus" shall not be deemed to include the documents incorporated therein
by reference, and no Agent shall be obligated to send or give any supplement or
amendment to any document incorporated by reference in any Preliminary
Prospectus or the Prospectus to any person other than a person to whom such
Agent had delivered such incorporated document or documents in response to a
written request therefor. The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Agent or any
controlling person of that Agent.
(b) Each Agent severally, and not jointly, shall indemnify and hold
harmless the Company, each of its directors (including any person who, with his
or her consent, is named in the Registration Statement as about to become a
director of the Company), each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, and any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales
of the Notes), to which the Company, or any such director or officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus or the Registration Statement or Prospectus as amended or
supplemented, or arises out of, or is 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, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with information
<PAGE>
16
furnished in writing to the Company by or on behalf of that Agent specifically
for inclusion therein, and shall reimburse the Company, or any such director or
officer or controlling person promptly upon demand for any legal and other
expenses reasonably incurred by the Company or any such director or officer or
controlling person in investigating or defending or preparing to defend against
or appearing as a third party witness in connection with any such loss, claim,
damage, liability or action. The foregoing indemnity agreement is in addition to
any liability which any Agent may otherwise have to the Company or any such
director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of any claim or the commencement of any action (including any
governmental investigation), the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Section 7,
notify each indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from its obligations hereunder, except to the extent
that the indemnifying party is materially prejudiced by such failure to notify,
or from any liability which it may have to an indemnified party otherwise than
under this Section 7. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
investigation, provided, however, that the Agents shall have the right to employ
counsel to represent the Agents and their respective controlling persons who may
be subject to liability arising out of any claim in respect of which indemnity
may be sought by the Agents against the Company under this Section 7 if, in the
reasonable judgment of the Agents, it is advisable for the Agents and such
controlling persons to be represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the indemnifying
party. Except as provided above, it is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) for all such indemnified
parties. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiffs, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 shall be for
any reason unavailable or insufficient to hold the indemnified party harmless,
then each indemnifying party, with respect to its obligations as provided in
Section 7(a) or 7(b), shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Agents on the other hand from
the offering of the Notes, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Agents on the
other hand with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and any Agent on the other hand with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the sale of the Notes (before deducting expenses) received by the Company
bear to the total commissions received by such Agent with respect
<PAGE>
17
to such offering. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or any Agent, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Agents agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro rata
allocation (even if the Agents were treated as one entity for such purpose) or
by any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7(d) shall be deemed to include, for
purposes of this Section 7(d) and subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Agent shall be required
to contribute any amount in excess of the amount by which the total price at
which the Notes sold through such Agent and distributed to the public was
offered to the public exceeds the amount of any damages which such Agent has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
SECTION 8. STATUS OF EACH AGENT
In soliciting offers to purchase Notes from the Company pursuant to
this Agreement (other than in respect of any Purchase Agreement), each Agent is
acting individually and not jointly and is acting solely as agent for the
Company and not as principal. Each Agent will make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Notes from the Company has been solicited by such Agent and accepted by the
Company but such Agent shall have no liability to the Company in the event any
such purchase is not consummated for any reason. If the Company shall default in
its obligations to deliver Notes to a purchaser whose offer it has accepted, the
Company shall (i) hold the Agents harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii), in
particular, pay to the Agents any commission to which they would be entitled in
connection with such sale.
SECTION 9. REPRESENTATIONS, WARRANTIES AND OBLIGATIONS TO SURVIVE
DELIVERY
The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Agents contained in this Agreement,
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Agent or any person controlling such Agent or by or
on behalf of the Company, and shall survive each delivery of and payment for any
of the Notes.
SECTION 10. TERMINATION
This Agreement may be terminated for any reason with respect to any
party hereto, at any time, by any party hereto upon the giving of one business
day's written notice of such termination to the other parties hereto; provided,
however, if such terminating party is an Agent, such termination shall be
effective only with respect to such terminating party. If, at the time of a
termination, an offer to purchase any of the Notes has been accepted by the
Company but the time of delivery to the purchaser has not occurred, the
provisions of this Agreement shall remain in effect until such Notes are
delivered. The provisions of Sections 2(c), 3(b), 3(f), 3(g), 4, 7, 8 and 9
hereof shall survive any termination of this Agreement.
<PAGE>
18
SECTION 11. SALES OF NOTES DENOMINATED IN A FOREIGN CURRENCY AND
INDEXED NOTES
If at any time the Company and any of the Agents shall determine to
issue and sell Notes denominated in a currency or currency unit other than U.S.
Dollars, which other currency may include a composite currency, or with respect
to which an index is used to determine the amounts of payments of principal and
any premium or interest, the Company and any such Agent shall execute and
deliver an Amendment (a "Foreign Currency Amendment" or "Indexed Note
Amendment," as the case may be) in the form attached hereto as Exhibit D. Such
amendment shall establish, as appropriate additions and modifications that shall
apply to the sales, whether offered on an agency or principal basis, of the
Notes covered thereby. The Agents are authorized to solicit offers to purchase
Notes with respect to which an index is used to determine the amounts of
payments of principal and any premium and interest, and the Company shall agree
to any sales of such Notes (whether offered on an agency or principal basis),
only in a minimum aggregate amount of $2,500,000.
SECTION 12. NOTICES
Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by facsimile or any other standard form of
telecommunication. Notices to the Agents shall be directed to it as follows: [
], Attention: [ ]; Telephone No.: [ ]; Telecopy No.: [ ]; [co-agent
information]; notices to the Company shall be directed to it as follows: Manor
Care, Inc., 11555 Darnestown Road, Gaithersburg, Maryland 20878-3200; Attention:
Secretary; Telephone No.: 301-979-4000; Telecopy No. 301-979-4007.
SECTION 13. BINDING EFFECT; BENEFITS
This Agreement shall be binding upon each Agent, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Agent within the meaning of Section 15 of the
Securities Act, and (b) the indemnity agreement of the Agents contained in
Section 7 hereof shall be deemed to be for the benefit of directors 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), officers
of the Company who have signed the Registration Statement and any person
controlling the Company. Nothing in this Agreement is intended or shall be
construed to give any person, other than the person referred to in this Section,
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
SECTION 14. GOVERNING LAW; COUNTERPARTS
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York (without giving effect to the principles of
choice of law). This Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
SECTION 15. PARAGRAPH HEADINGS
The paragraph headings used in this Agreement are for convenience of
reference only, and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
<PAGE>
If the foregoing correctly sets forth our agreement, please indicate
your acceptance hereof in the space provided for that purpose below.
Very truly yours,
MANOR CARE, INC.
By:
-----------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
[ ]
By:
------------------------------
Title:
[CO - AGENT]
By:
------------------------------
Title:
<PAGE>
EXHIBIT A
MANOR CARE, INC.
MEDIUM-TERM NOTES, SERIES A
SCHEDULE OF PAYMENTS
The Company agrees to pay each Agent a commission equal to the
following percentage of the aggregate U.S. dollar equivalent of the principal
amount of Notes:
===========================================================================
TERM COMMISSION RATE
- ---------------------------------------------------------------------------
9 months to less than 12 months 0.125%
- ---------------------------------------------------------------------------
12 months to less than 18 months 0.150%
- ---------------------------------------------------------------------------
18 months to less than 2 years 0.200%
- ---------------------------------------------------------------------------
2 years to less than 3 years 0.250%
- ---------------------------------------------------------------------------
3 years to less than 4 years 0.350%
- ---------------------------------------------------------------------------
4 years to less than 5 years 0.450%
- ---------------------------------------------------------------------------
5 years to less than 6 years 0.500%
- ---------------------------------------------------------------------------
6 years to less than 7 years 0.550%
- ---------------------------------------------------------------------------
7 years to less than 10 years 0.600%
- ---------------------------------------------------------------------------
10 years to less than 15 years 0.625%
- ---------------------------------------------------------------------------
15 years to less than 20 years 0.650%
- ---------------------------------------------------------------------------
20 years to 30 years 0.750%
===========================================================================
<PAGE>
EXHIBIT B
Manor Care, Inc.
Medium-Term Notes, Series A
Administrative Procedures
Medium-Term Notes, Series A, due from nine months to 30 years from
date of issue (the "Notes") may be offered on a continuing basis by Manor Care,
Inc. (the "Company"). Lehman Brothers Inc. and [name of co-agent], as agents
(each an "Agent" and collectively, the "Agents"), have each agreed to use their
reasonable best efforts to solicit offers to purchase the Notes. The Notes are
being sold pursuant to a Distribution Agreement between the Company and the
Agents dated ____ __, 1996 (as it may be supplemented or amended from time to
time, the "Distribution Agreement") to which these administrative procedures are
attached as an exhibit. The Notes will be issued pursuant to an Indenture, dated
as of ____ __, 1996 (as it may be amended or supplemented from time to time, the
"Indenture"), between the Company and [name of trustee], as trustee (the
"Trustee"). The Notes will rank equally with all other unsecured and
unsubordinated indebtedness of the Company and will have been registered with
the Securities and Exchange Commission (the "Commission"). Unless otherwise
noted, terms not defined herein shall have the same meanings as in the
Prospectus Supplement relating to the Notes (the "Prospectus") and in the
Distribution Agreement. Special administrative procedures for Multi-Currency
Notes and for Global Securities for Book-Entry Notes follow these administrative
procedures.
Administrative responsibilities, document control and record-keeping
functions to be performed by the Company will be performed by its Treasury
Department. Administrative procedures for the offering are explained below.
Registration
Notes will be issued only in fully registered form as either a
Book-Entry Note or a Certificated Note. Certificated Notes may be presented for
registration of transfer or exchange at the New York office of the Trustee's
designated agent.
Denominations
Unless otherwise indicated in the applicable Pricing Supplement, Notes
will be issued and payable in U.S. dollars in denominations of $1,000 and any
integral multiple thereof.
Interest Payments
Interest on Fixed Rate Notes and Floating Rate Notes (each as defined
in the Prospectus Supplement) shall accrue and be payable on terms specified in
the Prospectus Supplement and the applicable Pricing Supplement.
Acceptance and Rejection of Offers
The Company shall have the sole right to accept offers to purchase
Notes and may reject any such offer in whole or in part. Each Agent shall
promptly communicate to the Company, orally or in writing, each reasonable offer
to purchase Notes from the Company received by it other than those rejected by
such Agent. Each Agent shall have the right, in its discretion reasonably
exercised without advising the Company, to reject any offers in whole or in
part.
<PAGE>
B-2
Settlement
The receipt of immediately available funds in U.S. Dollars by the
Company in The City of New York in payment for a Note (less the applicable
commission) and the authentication and issuance of such Note shall, with respect
to such Note, constitute "Settlement." All offers accepted by the Company will
be settled from one to three Business Days from the date of acceptance by the
Company pursuant to the timetable for Settlement set forth below unless the
Company and the purchaser agree to Settlement on a later date; provided,
however, that the Company will so notify the Trustee of any such later date on
or before the Business Day immediately prior to the Settlement date.
Settlement Procedures for Certificated Notes
In the event of a purchase of Notes by an Agent, as principal,
appropriate Settlement details will be set forth in the applicable Purchase
Agreement to be entered into between such Agent and the Company pursuant to the
Distribution Agreement. In the Event of the sale of a Multi-Currency Note or an
Indexed Note, additional or different Settlement details may be set forth in the
applicable Amendment to be entered into between the Agent and the Company
pursuant to the Distribution Agreement.
Settlement procedures with regard to each Certificated Note sold
through each Agent shall be as follows:
A. Such Agent will advise the Company by telex or facsimile of the
following Settlement information:
1. Exact name in which the Note is to be registered ("Registered
Owner").
2. Exact address of the Registered Owner and address for payment of
principal and interest, if any.
3. Taxpayer identification number of the Registered Owner (if
available).
4. Principal amount of the Note (and, if multiple Notes are to be
issued, denominations thereof).
5. Settlement date (Original Issue Date).
6. Stated Maturity.
7. Issue Price.
8. Trade Date.
9. Specified Currency and whether the option to elect payments in a
Specified Currency applies and if the Specified Currency is not
U.S. Dollars, the authorized denominations.
<PAGE>
B-3
10. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
ii) overdue rate, if any
(b) Floating Rate Notes:
i) Interest Rate Basis (e.g., Commercial Paper Rate)
ii) Initial Interest Rate
iii) Spread or Spread Multiplier, if any
iv) Interest Reset Dates, Interest Reset Period and
Interest Determination Dates
v) Index Maturity
vi) maximum and minimum interest rates, if any
vii) overdue rate, if any
(c) Indexed Notes
The applicable terms thereof
11. Interest Payment Date(s) and Regular Record Dates.
12. Optional Interest Reset Dates, if any, and Subsequent Interest
Periods, if any.
13. Extension Periods, if any, and Final Maturity Dates, if any.
14. The date on or after which the Notes are redeemable at the option
of the Company or repurchasable by the Company at the option of
the holder, and additional redemption or repurchase provisions,
if any.
15. Amortization schedule, if any.
16. Wire transfer information, if applicable.
17. Agent's commission (to be paid in the form of a discount from the
proceeds remitted to the Company upon Settlement).
18. Whether such Certificated Note is issued at an original issue
discount ("OID"), and, if so, the total amount of OID, the yield
to maturity and the initial accrual period of OID.
19. Other provisions, if appropriate.
B. The Company will confirm the above Settlement information to the
Trustee by telex or facsimile. If the Company rejects an offer, the Company will
promptly notify such Agent by telephone.
<PAGE>
B-4
C. The Trustee will assign a Note number to the transaction and will
complete the first page of the preprinted 4-ply Note packet, the form of which
was previously approved by the Company, the Agents and the Trustee.
D. The Trustee will deliver the Note (with the attached white
confirmation) and the yellow and blue stubs to the Agent. Such Agent will
acknowledge receipt of the Note by completing the yellow stub and returning it
to the Trustee.
E. Such Agent will cause to be wire transferred to a bank account
designated by the Company immediately available funds in U.S. dollars in the
amount of the principal amount of the Note, less the applicable commission or
discount, if any.
F. Such Agent will deliver the Note (with the attached white
confirmation) to the purchaser against payment in immediately available funds in
the amount of the principal amount of the Note. Such Agent will deliver to the
purchaser a copy of the most recent Prospectus applicable to the Note with or
prior to any written offer of Notes, delivery of the Note and the confirmation
and payment by the purchaser for the Note.
G. Such Agent will obtain the acknowledgement of receipt for the Note
and Prospectus by the purchaser through the purchaser's completion of the blue
stub.
H. The Trustee will mail the pink stub to the Company's Treasurer.
Settlement Procedures Timetable for Certificated Notes
For offers accepted by the Company, Settlement procedures "A" through
"H" set forth above shall be completed on or before the respective times set
forth below:
Settlement
Procedure Time (New York)
- --------- ---------------
A 5:00 PM on date of order
B 3:00 PM on the Business Day prior to Settlement date
C-D 12 noon on Settlement date
E 2:15 PM on the Settlement date
F-G 3:00 PM on the Settlement date
H 5:00 PM on Business Day after the Settlement date
Failure
In the event that a purchaser of a Note shall either fail to accept
delivery of or make payment for such Note on the date fixed by the Company for
Settlement, such Agent will immediately notify the Trustee and the Company's
Treasurer by telephone, confirmed in writing, of such failure and return the
Note to the Trustee. Upon the Trustee's receipt of the Note from the Agent, the
Company will promptly return to the Agent an amount of immediately available
funds in U.S. dollars equal to any amount previously transferred to the Company
in respect of the Note pursuant to advances made by the Agent. Such returns will
be made on the Settlement date, if possible, and in any event not later than 12
noon (New York City time) on the Business Day following the Settlement date. The
Company will
<PAGE>
B-5
reimburse such Agent on an equitable basis for its loss of the use of the funds
during the period when the funds were credited to the account of the Company.
Upon receipt of the Note in respect of which the default occurred, the Trustee
will mark the Note "cancelled", make appropriate entries in its records and
deliver the Note to the Company with an appropriate debit advice. Such Agent
will not be entitled to any commission with respect to any Note which the
purchaser does not accept or make payment for.
Redemption
The Notes will be redeemable (if at all) prior to their Stated
Maturity on terms specified in the Prospectus Supplement and the applicable
Pricing Supplement.
Maturity
Notes will be paid at Maturity on terms specified in the Prospectus
Supplement and the applicable Pricing Supplement.
Procedures for Establishing the Terms of the Notes
The Company and the Agents will discuss from time to time the rates to
be borne by the Notes that may be sold as a result of the solicitation of offers
by the Agents. Once any Agent has recorded any indication of interest in Notes
upon certain terms and communicated with the Company, if the Company accepts an
offer to purchase Notes upon such terms, the Company will prepare a Pricing
Supplement, in the form previously approved by the Agents, reflecting the terms
of such Notes and, after approval from such Agent, will arrange to
electronically transmit for filing with the SEC under the EDGAR system a copy of
such Pricing Supplement (together with the Prospectus, if amended or
supplemented) and will supply an appropriate number of copies of the Prospectus,
as then amended or supplemented, together with such Pricing Supplement, to the
Agent who presented such offer. See "Delivery of Prospectus."
If the Company decides to post rates and a decision has been reached
to change interest rates, the Company will promptly notify each Agent. Each
Agent will forthwith suspend solicitation of purchases. At that time, the Agents
will recommend and the Company will establish rates to be so "posted". Following
establishment of posted rates and prior to the filing described in the following
sentence, the Agents may only record indications of interest in purchasing Notes
at the posted rates. Once any Agent has recorded any indication of interest in
Notes at the posted rates and communicated with the Company, if the Company
plans to accept an offer at the posted rate, the Company will prepare a Pricing
Supplement reflecting such posted rates and, after approval from the Agents,
will arrange to electronically transmit for filing with the SEC under the EDGAR
system a copy of such Pricing Supplement (together with the Prospectus if
amended or supplemented) and will supply an appropriate number of copies of the
Prospectus, as then amended or supplemented, to the Agent who presented such
offer. See "Delivery of Prospectus."
Suspension of Solicitation; Amendment or Supplement
In the event that at the time the Agents, at the direction of the
Company, suspend solicitation of offers to purchase from the Company there shall
be any orders outstanding which have not been settled, the Company will promptly
advise the Agents and the Trustee whether such orders may be settled and whether
copies of the Prospectus as theretofore amended and/or supplemented as in effect
at the time of the suspension may be delivered in connection with the settlement
of such orders. The
<PAGE>
B-6
Company will have the sole responsibility for such decision and for any
arrangements which may be made in the event that the Company determines that
such orders may not be settled or that copies of such Prospectus may not be so
delivered.
Delivery of Prospectus
A copy of the Prospectus as most recently amended or supplemented on
the date of delivery thereof, together with the applicable Pricing Supplement,
must be delivered to a purchaser prior to or simultaneously with the earlier of
the delivery of (i) the written confirmation of a sale sent to a purchaser or
his agent and (ii) any Note purchased by such purchaser. The Company shall
ensure that the applicable Agent receives copies of the Prospectus and each
amendment or supplement thereto (including the applicable Pricing Supplement) in
such quantities and within such time limits as will enable such Agent to deliver
such confirmation or Note to a purchaser as contemplated by these procedures and
in compliance with the preceding sentence. Copies of Pricing Supplements should
be delivered to:
If to Lehman Brothers Inc.:
By facsimile delivery to:
Lehman Brothers Inc.
c/o ADP
Prospectus Services
536 Broad Hollow Road
Melville, New York 11747
Attention: Mike Ward
Telephone: (516) 254-7106
Facsimile: (516) 249-7492]
with a copy by hand to:
Lehman Brothers Inc.
3 World Financial Center, 9th Floor
New York, New York 10285-0900
Attention: Brunnie Vazquez
Telephone: (212) 526-8400
If to [co-agent]:
<PAGE>
B-7
If, since the date of acceptance of a purchaser's offer, the Prospectus shall
have been supplemented solely to reflect any sale of Notes on terms different
from those agreed to between the Company and such purchaser or a change in
posted rates not applicable to such purchaser, such purchaser shall not receive
the Prospectus as supplemented by such new supplement, but shall receive the
Prospectus as supplemented to reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended or supplemented on the
date of delivery of the Prospectus. The Trustee will make all such deliveries
with respect to all Notes sold directly by the Company.
Authenticity of Signatures
The Company will cause the Trustee to furnish the Agents from time to
time with the specimen signatures of each of the Trustee's officers, employees
and agents who have been authorized by the Trustee to authenticate Notes, but
the Agents will have no obligation or liability to the Company or the Trustee in
respect of the authenticity of the signature of any officer, employee or agent
of the Company or the Trustee on any Note.
Advertising Costs
The Company will determine with the Agents the amount and nature of
advertising, if any, that may be appropriate in offering the Notes. Advertising
expenses incurred with the consent of the Company will be paid by the Company.
<PAGE>
B-8
SPECIAL ADMINISTRATIVE PROCEDURES
FOR MULTI-CURRENCY NOTES
Unless otherwise set forth in an applicable Foreign Currency
Amendment, the following procedures and terms shall apply to Multi-Currency
Notes in addition to, and to the extent inconsistent therewith in replacement
of, the procedures and terms set forth above.
Denominations
The authorized denominations of any Multi-Currency Note will be the
amount of the Specified Currency for such Multi-Currency Note equivalent, at the
noon buying rate in the City of New York for cable transfers for such Specified
Currency (the "Market Exchange Rate") on the first Business Day in the City of
New York and the country issuing such currency (or in the case of ECUs,
Brussels) next preceding the date on which the Company accepts the offer to
purchase such Multi-Currency Note, to U.S.$100,000 (rounded down to an integral
multiple of 10,000 units of such Specified Currency) and any greater amount that
is an integral multiple of 10,000 units of such Specified Currency.
Currencies
Unless otherwise specified in the applicable Pricing Supplement,
payments of principal of (and premium, if any) and interest on all
Multi-Currency Notes will be made in the applicable Specified Currency,
provided, however, that payments of principal of (and premium, if any) and
interest on Multi- Currency Notes denominated in other than U.S dollars will
nevertheless be made in U.S. dollars (i) at the option of the Holders thereof
under the procedures described below and (ii) at the option of the Company in
the case of imposition of exchange controls or other circumstances beyond the
control of the Company as described below.
Payment of Principal and Interest
If so specified in the applicable Pricing Supplement, except as
provided in the next paragraph, payments of interest and principal (and premium,
if any) with respect to any Multi-Currency Note will be made in U.S. dollars if
the Holder of such Note on the relevant Regular Record Date or at Maturity, as
the case may be, has transmitted a written request for such payment in U.S.
dollars to the Trustee at its Corporate Trust Office in The City of New York on
or prior to such Regular Record Date or the date 15 days prior to Maturity, as
the case may be. Such request may be in writing (mailed or hand delivered) or by
cable, telex or other form or facsimile transmission. Any such request made with
respect to any Multi-Currency Note by a Holder will remain in effect with
respect to any further payments of interest and principal (and premium, if any)
with respect to such Multi-Currency Note payable to such Holder, unless such
request is revoked on or prior to the relevant Regular Record Date or the date
15 days prior to Maturity, as the case may be. Holders of Multi-Currency Notes
denominated in other than U.S. dollars whose Notes are registered in the name of
a broker or nominee should contact such broker or nominee to determine whether
and how an election to receive payments in U.S. dollars may be made.
The U.S. dollar amount to be received by a Holder of a Multi-Currency
Note who elects to receive payments in U.S. dollars will be based on the highest
bid quotation in The City of New York received by the Currency Determination
Agent (as defined below) as of noon New York City time on the third Business Day
next preceding the applicable payment date from three recognized foreign
exchange dealers (one of which may be the Currency Determination Agent) for the
purchase by the quoting dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount
<PAGE>
B-9
of the Specified Currency payable to all Holders of Multi-Currency Notes
electing to receive U.S. dollar payments and at which the applicable dealer
commits to execute a contract. If three such bid quotations are not available on
the third Business Day preceding the date of payment of principal (and premium,
if any) or interest with respect to any such Multi-Currency Note, such payment
will be made in the Specified Currency. All currency exchange costs associated
with any payment in U.S. dollars on any such Multi- Currency Note will be borne
by the Holder thereof by deductions from such payment. Unless otherwise provided
in the applicable Pricing Supplement, the Trustee will be the Currency
Determination Agent (the "Currency Determination Agent") with respect to the
Multi-Currency Notes.
Payment Currency
If the principal of (and premium, if any) or interest on any
Multi-Currency Note is payable in any currency other than U.S. dollars and such
Specified Currency is not available due to the imposition of exchange controls
or other circumstances beyond the control of the Company, the Company will be
entitled to satisfy its obligations to Holders of the Multi-Currency Notes by
making such payment in U.S. dollars on the basis of the Market Exchange Rate on
the last date such Specified Currency was available (the "Conversion Date"). Any
payment made under such circumstances in U.S. dollars where the required payment
is in other than U.S. dollars will not constitute an Event of Default under the
Indenture.
If payment in respect of a Note is required to be made in any currency
unit (e.g., ECU) and such currency unit is unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, then all
payments in respect of such Multi-Currency Note shall be made in U.S. dollars
until such currency unit is again available. The amount of each payment in U.S.
dollars shall be computed on the basis of the equivalent of the currency unit in
U.S. dollars, which shall be determined by the Company or its agent on the
following basis. The component currencies of the currency unit for this purpose
(the "Component Currencies") shall be the currency amounts that were components
of the currency unit as of the Conversion Date for such currency unit. The
equivalent of the currency unit in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Component Currencies. The U.S.
dollar equivalent of each of the Component Currencies shall be determined by the
Company or such agent on the basis of the Market Exchange Rate for each such
Component Currency that is available as of the third Business Day prior to the
date on which the relevant payment is due and for each such Component Currency
that is unavailable, if any, as of the Conversion Date for such Component
Currency.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
Currency shall be divided or multiplied in the same proportion, if two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
Outstanding Multi-Currency Notes
For purposes of calculating the principal amount of any Multi-Currency
Note for any purpose under the Indenture, the principal amount of such
Multi-Currency Note at any time outstanding shall be deemed to be the U.S.
dollar equivalent at the Market Exchange Rate, determined as of the date
<PAGE>
B-10
of the original issuance of such Multi-Currency Note, of the principal amount of
such Multi-Currency Note.
Details for Settlement of Multi-Currency Notes
In addition to the Settlement information specified in "Settlement
Procedures" above, the Agents shall communicate to the Company in the manner set
forth in "Settlement Procedures" the following information:
1. Specified Currency.
2. Denominations.
3. Wire transfer and overseas bank account information (if holder
has elected payment in a Specified Currency).
Additional Obligations of the Company and the Agents
(a) The Company or its designated agent shall submit such reports
or information as may be required from time to time by applicable law,
regulations and guidelines promulgated by Japanese governmental and
regulatory authorities in respect of the issue and purchase of Notes
denominated in Japanese Yen.
(b) The Company acknowledges that the terms of Notes denominated
in Japanese Yen that will be issued will be limited to those which
have been recognized by Japanese authorities.
(c) Each Agent represents to and agrees with the Company that it
will not offer or sell any Note directly or indirectly in Japan or to
residents of Japan or for the benefit of any Japanese person (which
term as used herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan) or to
others for reoffering or resale directly or indirectly in Japan or to
any Japanese person during the period of 90 days from the issue date
of such Note (which Note is denominated in Japanese Yen) or 180 days
from the issue date of the Note (which Note is a Dual Currency Note,
Reverse Dual Currency Note or Optional Dual Currency Note) and that
thereafter it will not do so, except under circumstances which will
result in compliance with any applicable laws, regulations and
ministerial guidelines of Japan taken as a whole. Furthermore, in
connection with the issuance of Notes denominated in Japanese Yen, the
Company and you each agree to comply with all applicable laws,
regulations and guidelines as amended from time to time of the
Japanese governmental and regulatory authorities.
<PAGE>
B-11
SPECIAL ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to the Trustee, as agent for the Depository Trust Company
("DTC"), and recorded in the book-- entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the Holder thereof or a Person
designated by such Holder (a "Certificated Note"). An owner of a Book-Entry Note
will not be entitled to receive a certificate representing such Note. In
connection with the qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations from the
Company and the Trustee to DTC dated the date hereof and a Medium-Term Note
Certificate Agreement between the Trustee and DTC, dated as of _______ __, 19__,
and its obligations as a participant in DTC, including DTC's Same-Day Funds
Settlement System ("SDFS"). Except as otherwise set forth in this Exhibit B,
Book-Entry Notes will be issued in accordance with the administrative procedures
set forth below.
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Fixed Rate
Book-Entry Notes, the Company will issue a single
Global Security in fully registered form without
coupons (a "Global Security") representing all of such
Notes that have the same Original Issue Date, interest
rate and Stated Maturity. Similarly, on any settlement
date for one or more Floating Rate Book-Entry Notes,
the Company will issue a single Global Security
representing all of such Notes that have the same
Original Issue Date, Interest Rate Basis, Initial
Interest Rate, Interest Payment Period, Interest
Payment Dates, Index Maturity, Spread or Spread
Multiplier, if any, minimum interest rate (if any),
maximum interest rate (if any), redemption provisions,
if any, and Stated Maturity. No Global Security will
represent (i) both Fixed Rate and Floating Rate
Book-Entry Notes or (ii) any Certificated Note or (iii)
any Multi-Currency or Indexed Note.
Identification The Company will arrange, on or prior to
Numbers: commencement of a program for the offering of
Book-Entry Notes, with the CUSIP Service Bureau of
Standard & Poor's Ratings Group (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP
numbers (including tranche numbers), consisting of
approximately 900 CUSIP numbers and relating to Global
Securities representing the Book-Entry Notes. The
Trustee has or will obtain from the CUSIP Service
Bureau a written list of such series of reserved CUSIP
numbers and will deliver to the Company and DTC such
written list of 900 CUSIP numbers of such series. The
Trustee will assign CUSIP numbers to Global Securities
as described below under Settlement Procedure "B". DTC
will notify the CUSIP Service Bureau periodically of
the CUSIP numbers that the Trustee has assigned to
Global Securities. The Trustee will notify the Company
at any time when fewer than 100 of the reserved CUSIP
numbers remain
<PAGE>
B-12
unassigned to Global Securities, and if it deems
necessary, the Company will reserve additional CUSIP
numbers for assignment to Global Securities repre-
senting Book-Entry Notes. Upon obtaining such addition-
al CUSIP numbers the Trustee shall deliver such
additional CUSIP numbers to the Company and DTC.
Registration: Each Global Security will be registered in the name of
Cede & Co., as nominee for DTC, on the Security
Register maintained under the Indenture. The beneficial
owner of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with respect
to such Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such Note in the account of such
Participants. The ownership interest of such beneficial
owner in such Note will be recorded through the records
of such Participants or through the separate records of
such Participants and one or more indirect participants
in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished by
book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Note.
Consolidation and
Exchange:
Consolidation and
Exchange: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent (A) Fixed
Rate Book-Entry Notes having the same Original Issue
Date, interest rate and Stated Maturity and with
respect to which interest has been paid to the same
date or (B) Floating Rate Book-Entry Notes having the
same Interest Rate Basis, Original Issue Date, Initial
Interest Rate, Interest Payment Dates, Index Maturity,
Spread or Spread Multiplier, if any, minimum interest
rate (if any), maximum interest rate (if any),
redemption provisions, if any, and Stated Maturity and
with respect to which interest has been paid to the
same date, (ii) a date, occurring at least thirty days
after such written notice is delivered and at least
thirty days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global Securities
shall be exchanged for a single replacement Global
Security and (iii) a new CUSIP number, obtained from
the Company, to be assigned to such replacement Global
Security. Upon receipt of such a notice, DTC will send
to its participants (including the Trustee) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified
<PAGE>
B-13
exchange date, the Trustee will deliver to the CUSIP
Service Bureau a written notice setting forth such
exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of
the Global Securities to be exchanged will no longer be
valid. On the specified exchange date, the Trustee will
exchange such Global Securities for a single Global
Security bearing the new CUSIP number, and the CUSIP
numbers of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned.
Notwithstanding the foregoing, if the Global Securities
to be exchanged exceed the maximum principal amount
specified by DTC, one Global Security will be
authenticated and issued to represent such maximum
principal amount of the exchanged Global Securities and
an additional Global Security will be authenticated and
issued to represent any remaining principal amount of
such Global Securities (see "Denominations" below).
Denominations: Unless otherwise specified in the Prospectus Supplement
or the applicable Pricing Supplement, Book-Entry Notes
will be issued in principal amounts of $1,000 or any
integral multiple thereof.
Interest: Interest on each Book-Entry Note will accrue and be
payable on terms specified in the Prospectus Supplement
and the applicable Pricing Supplement. Standard &
Poor's Ratings Group will use the information received
in the pending deposit message described under
Settlement Procedure "C", below in order to include the
amount of any interest payable and certain other
information regarding the related Global Security in
the appropriate weekly bond report published by
Standard & Poor's Ratings Group.
Promptly after each Interest Determination Date for
Floating Rate Notes, the Company will notify the
Trustee, and the Trustee in turn will notify Standard &
Poor's Ratings Group, of the interest rates determined
on such Interest Determination Date.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each Regular
Record Date, the Trustee will deliver to the Company
and DTC a written notice specifying by CUSIP number the
amount of interest to be paid on each Global Security
on the following Interest Payment Date (other than an
Interest Payment Date coinciding with Maturity) and the
total of such amounts. DTC will confirm the amount
payable on each Global Security on such Interest
Payment Date by reference to the daily bond reports
published by Standard & Poor's Ratings Group. The
Company will pay to the Trustee, as paying agent, the
total amount of interest due on such
<PAGE>
B-14
Interest Payment Date (other than at Maturity), and the
Trustee will pay such amount to DTC at the times and in
the manner set forth below under "Manner of Payment".
Payments at Maturity. On or about the first Business
Day of each month, the Trustee will deliver to the
Company and DTC a written list of principal and
interest to be paid on each Global Security maturing in
the following month. The Company, the Trustee and DTC
will confirm the amounts of such principal and interest
payments with respect to each such Global Security on
or about the fifth Business Day preceding the Maturity
of such Global Security. The Company will pay to the
Trustee, as the paying agent, the principal amount of
such Global Security, together with interest due at
such Maturity. The Trustee will pay such amount to DTC
at the times and in the manner set forth below under
"Manner of Payment".
Manner of Payment. The total amount of any principal
and interest due on Global Securities on any Interest
Payment Date or at Maturity shall be paid by the
Company to the Trustee in funds available for use by
the Trustee as of 9:30 A.M. (New York City time) on
such date. The Company will make such payment on such
Global Securities by instructing the Trustee to
withdraw funds from an account maintained by the
Company at the Trustee. The Company will confirm such
instructions in writing to the Trustee. For maturity,
redemption or any other principal payments: prior to 10
A.M. (New York City time) on such date or as soon as
possible thereafter, the Trustee will make such
payments to DTC in same day funds in accordance with
DTC's Same Day Funds Settlement Paying Agent Operating
Procedures. For interest payments: the Trustee will
make such payments to DTC in accordance with existing
arrangements between DTC and the Trustee. DTC will
allocate such payments to its participants in
accordance with its existing operating procedures.
Neither the Company (either as issuer or as Paying
Agent) nor the Trustee shall have any direct
responsibility or liability for the payment by DTC to
such Participants of the principal of and interest on
the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in
DTC or other Person responsible for forwarding payments
and materials directly to the beneficial owner of such
Note.
<PAGE>
B-15
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note which will be registered in the name of
the nominee of DTC (unless otherwise indicated in the
applicable Pricing Supplement, "Cede & Co.") sold by
the Company through an Agent, as agent, shall be as
follows:
A. Such Agent will advise the Company by telex or
facsimile of the following settlement information:
1. Principal amount of the Note (and, if
multiple Notes are to be issued,
denominations thereof).
2. Settlement date (Original Issue Date).
3. Stated Maturity.
4. Issue Price.
5. Trade Date.
6. Specified Currency and whether the option to
elect payments in a Specified Currency
applies and if the Specified Currency is not
U.S. Dollars, the authorized denominations.
7. Interest rate:
(a) Fixed Rate Notes:
i) interest rate
ii) overdue rate, if any
(b) Floating Rate Notes:
i) Interest Rate Basis (e.g., Commercial
Paper Rate)
ii) Initial Interest Rate
iii) Spread or Spread Multiplier, if any
iv) Interest Reset Dates, Interest Reset
Period and Interest Determination
Dates
v) Index Maturity vi) maximum and
minimum interest rates, if any
vii) overdue rate, if any
(c) Currency Indexed Notes
The applicable terms thereof
<PAGE>
B-16
8. Interest Payment Date(s) and Regular Record
Dates.
9. Optional Interest Reset Dates, if any, and
Subsequent Interest Periods, if any.
10. Extension Periods, if any, and Final Maturity
Dates, if any.
11. The date on or after which the Notes are
redeemable at the option of the Company or
repurchasable by the Company at the option of
the holder, and additional redemption or
repurchase provisions, if any.
12. Amortization schedule, if any.
13. Wire transfer information, if applicable.
14. Agents Commission (to be paid in the form of
a discount from the proceeds remitted to the
Company upon Settlement).
15. Whether such Book-Entry Note is issued at an
original issue discount ("OID"), and, if so,
the total amount of OID, the yield to
maturity and the initial accrual period of
OID.
B. The Company will advise the Trustee by electronic
transmission of the information set forth in
Settlement Procedure "All above and the name of
such Agent. Each such communication by the Company
shall constitute a representation and warranty by
the Company to the Trustee and each Agent that (i)
such Note is then, and at the time of issuance and
sale thereof will be, duly authorized for issuance
and sale by the Company, (ii) such Note, and the
Global Security representing such Note, will
conform with the terms of the Indenture and (iii)
upon authentication and delivery of such Global
Security, the aggregate initial offering price of
all Notes issued under the Indenture will not
exceed the maximum aggregate amount then
authorized (except for Book-Entry Notes
represented by Global Securities authenticated and
delivered in exchange for or in lieu of Global
Securities pursuant to the Indenture and except
for Certificated Notes authenticated and delivered
upon registration of transfer of, in exchange for,
or in lieu of Certificated Notes pursuant to any
such Section).
<PAGE>
B-17
C. The Trustee will assign a CUSIP number to the
Global Security representing such Note and enter a
pending deposit message through DTC's Participant
Terminal System, providing the following
settlement information to DTC, such Agent and
Standard & Poor's Ratings Group:
1. The applicable information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate Book-Entry
Note or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note,
number of days by which such date succeeds
the related "DTC Regular Record Date" (which
term means the Regular Record Date except in
the case of floating rate notes which reset
daily or weekly in which case it means the
date 5 calendar days immediately preceding
the Interest Payment Date) and amount of
interest payable on such Interest Payment
Date per $1,000 of principal amount of such
Note.
4. Frequency of interest payments (monthly,
semiannually, quarterly, etc.).
5. CUSIP number of the Global Security
representing such Note.
6. Whether such Global Security will represent
any other Book-Entry Note (to the extent
known at such time).
D. Such Agent will deliver to the purchaser a copy of
the most recent Prospectus applicable to the Note
with or prior to any written offer of Notes and
the confirmation and payment by the purchaser of
the Note.
Such Agent will confirm the purchase of such Note
to the purchaser either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
E. The Trustee, as Trustee, will complete and
authenticate the note certificate evidencing the
Global Security representing such Book-Entry Note.
F. DTC will credit such Note to the Trustee's
participant account at DTC.
<PAGE>
B-18
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such Note
to such Agent's participant account and (ii) debit
such Agent's settlement account and credit the
Trustee's settlement account for an amount equal
to the price of such Note less such Agent's
commission. The entry of such a deliver order
shall constitute a representation and warranty by
the Trustee to DTC that (i) the Global Security
representing such Book-Entry Note has been issued
and authenticated and (ii) the Trustee is holding
such Global Security pursuant to the Medium-Term
Note Certificate Agreement between the Trustee and
DTC (the "Certificate Agreement").
H. Such Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
Agent's participant account and credit such Note
to the participant accounts of the Participants
with respect to such Note and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of such Agent for an
amount equal to the price of such Note.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and
"H" will be settled in accordance with SDFS
operating procedures in effect on the Settlement
date.
J. The Trustee will credit to an account of the
Company maintained at the Trustee funds available
for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure
"G".
Settlement Procedures
Timetable: For orders of Book-Entry Notes solicited by an Agent,
as agent, and accepted by the Company for settlement,
Settlement Procedures "A" through "J" set forth above
shall be completed as soon as possible but not later
than the respective times (New York City time) set
forth below:
<PAGE>
B-19
Settlement.
Procedure Time
A 11:00 A.M. on the sale date
B 12 Noon on the sale date
C 2:00 P.M. on the sale date
D Day after sale date
E 3:00 P.M. on day before Settlement date
F 10:00 A.M. on Settlement date
G-H 2:00 P.M. on Settlement date
I 4:45 P.M. on Settlement date
J 5:00 P.M. on Settlement date
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures "A", "B" and
"C" shall be completed as soon as practicable but no
later than 11:00 A.M., 12 Noon and 2:00 P.M., as the
case may be, on the first Business Day after the sale
date. If the initial interest rate for a Floating Rate
Book-Entry Note has not been determined at the time
that Settlement Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed as soon as
such rate has been determined but no later than 12:00
Noon and 2:00 P.M., respectively, on the second
Business Day before the Settlement date. Settlement
Procedure "J" is subject to extension in accordance
with any extension of Fedwire closing deadlines and in
the other events specified in the SDFS operating
procedures in effect on the Settlement date.
If Settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee will deliver to DTC, through
DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 P.M. on
the Business Day immediately preceding the scheduled
Settlement date.
Failure to Settle: If the Trustee has not entered an SDFS
deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "G", then, upon
written request (which may be effected by facsimile
transmission) of the Company, the Trustee shall deliver
to DTC, through DTC's Participant Terminal System, as
soon as practicable but no later than 2:00 P.M. on any
Business Day, a withdrawal message instructing DTC to
debit such Note to the Trustee's participant account.
DTC will process the withdrawal message, provided that
the Trustee's participant account contains a principal
amount of the Global Security representing such Note
that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with
respect to all the Book-- Entry Notes represented by a
Global Security, the Trustee will mark such Global
Security "canceled", make appropriate entries
<PAGE>
B-20
in the Trustee's records and send such canceled Global
Security to the Company. The CUSIP number assigned to
such Global Security shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal message is
processed with respect to one or more, but not all, of
the Book-Entry Notes represented by a Global Security,
the Trustee will exchange such Global Security for two
Global Securities, one of which shall represent such
Book-Entry Note or Notes and shall be canceled
immediately after issuance and the other of which shall
represent the other Book-Entry Notes previously
represented by the surrendered Global Security and
shall bear the CUSIP number of the surrendered Global
Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a Person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
turn, the Agent for such Note may enter SDFS deliver
orders through DTC's Participant Terminal System
debiting such Book-Entry Note free to such Agent's
participant account and crediting such Book-Entry Note
free to the participant account of the Trustee and
shall notify the Trustee and the Company thereof.
Thereafter, the Trustee (i) will immediately notify the
Company, once the Trustee has confirmed that such
Book-Entry Note has been credited to its participant
account, and the Company shall immediately transfer by
Fed wire (immediately available funds) to such Agent an
amount equal to the amount with respect to such
Book-Entry Note which was previously sent by wire
transfer to the account of the Company in accordance
with Settlement Procedure "J", and (ii) the Trustee
will deliver the withdrawal message and take the
related actions described in the preceding paragraph.
Such debits and credits will be made on the Settlement
date, if possible, and in any event not later than 5:00
P.M. on the following Business Day. If such failure
shall have occurred for any reason other than a default
by the Agent in the performance of its obligations
hereunder and under the Distribution Agreement, then
the Company will reimburse the Agent on an equitable
basis for the loss of the use of the funds during the
period when they were credited to the account of the
Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the
Book-Entry Notes to have been represented by a Global
Security, the Trustee will provide, in accordance with
Settlement Procedure "E", for the authentication and
issuance of
<PAGE>
B-21
a Global Security representing the other Book-Entry
Notes to have been represented by such Global Security
and will make appropriate entries in its records.
Trustee Not to
Risk Funds: Nothing herein shall be deemed to require the Trustee
to risk or expend its own funds in connection with any
payment to the Company, DTC, the Agents, or the
purchaser, it being understood by all parties that
payments made by the Trustee to the Company, DTC, the
Agents, or the purchaser shall be made only to such
extent that funds are provided to the Trustee for such
purpose. Similarly, nothing herein shall alter any
duty, or limit or diminish any right or immunity, of
the Trustee under the Indenture.
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
Manor Care, Inc. _______________, 19__
10570 Columbia Pike
Silver Spring, Maryland 20901
Attention: Treasurer
The undersigned agrees to purchase the following principal amount of
the Notes described in the Distribution Agreement dated ____ __, 1996 (as it may
be supplemented or amended from time to time, the "Distribution Agreement"):
Principal Amount [$] ______________________________
Specified Currency: ______________________________
Indexed Currency: ______________________________
Interest Rate: ________%
Discount: ________% of Principal Amount
Aggregate Price to be
paid to Company
(in immediately
available funds): [$] ______________________________
Settlement Date: ______________________________
Other Terms: ______________________________
In the case of Notes issued in a foreign currency or currency unit,
unless otherwise specified below, settlement and payments of principal and
interest will be in U.S. dollars based on the highest bid quotation in The City
of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New
York City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers selected by the Exchange Rate
Agent and approved by the Company (one of which may be the Exchange Rate Agent)
for the purchase by the quoting dealer of the Specified Currency for U.S.
dollars for settlement on such payment date in the aggregate amount of the
Specified Currency payable to all holders of Notes denominated in such Specified
Currency electing to receive U.S. dollar payments and at which the applicable
dealer commits to execute a contract. If such bid quotations are not available,
payments will be made in the Specified Currency.
Our obligation to purchase Notes hereunder is subject to the continued
accuracy of your representations and warranties contained in the Distribution
Agreement and to your performance and observance of all applicable covenants and
agreements contained therein, including, without limitation, your obligations
pursuant to Section 6 and Section 7 thereof. Our obligation hereunder is subject
to the conditions set forth in Section 5 of the Distribution Agreement and to
the further condition that we shall receive (a) the opinions required to be
delivered pursuant to Section 5(e) of the Distribution Agreement, (b) the
certificate required to be delivered pursuant to Section 5(f) of the
Distribution Agreement, (c) the letter referred to in Section 5(g), in each case
dated as of the above Settlement Date and (d) and such further information,
certificates and documents as the Agents or counsel to the Agents may reasonably
request.
<PAGE>
C-2
In further consideration of our agreement hereunder, you agree that
between the date hereof and the above Settlement date, you will not offer or
sell, or enter into any agreement to sell, any debt securities of the Company,
other than borrowings under your revolving credit agreements and lines of
credit, the private placement of securities and issuances of your commercial
paper or other issuances of Notes.
We may terminate this Agreement, in our absolute discretion, by notice
given to and received by the Company prior to delivery of and payment for the
Securities, if prior to that time (a) a downgrading shall have occurred in the
rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations, (b) any such
organization shall have publicly announced that is has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities, (c) trading in securities generally on the New York Stock
Exchange, The American Stock Exchange, the Chicago Board Options Exchange or the
over-the-counter market shall have been suspended or materially limited or
minimum prices shall have been established on one or more of such exchanges or
such market by the Commission or such exchange or other regulatory body or
governmental authority having jurisdiction, (d) a banking moratorium shall have
been declared by United States federal or New York State authorities, (e) the
United States shall have become engaged in major hostilities or there shall have
been an escalation in major hostilities involving the United States or a
declaration of a national emergency or war shall have been made by the United
States, (f) there shall have been such a material adverse change in national or
international political, financial or economic conditions, national or
international equity markets or currency exchange rates or controls as to make
it, in the judgment of the Agents, inadvisable or impracticable to proceed with
the payment for and delivery of the Notes, or (g)(i) the Company or any of its
subsidiaries shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus 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 or (ii) since such date there shall have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any 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 its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Agents, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes on the
terms and in the manner contemplated in the Prospectus.
<PAGE>
C-3
This Agreement shall be governed by and construed in accordance with
the laws of New York.
[Insert name of Agent(s]]
By _________________________
[Title]
Accepted: 19__
Manor Care, Inc.
By _________________________
[Title]
<PAGE>
EXHIBIT D
[FOREIGN CURRENCY] [INDEXED NOTE]
AMENDMENT NO. ____________ TO DISTRIBUTION AGREEMENT,
DATED , 1996, AS AMENDED
[Insert Title of Foreign Currency and, in the case of
Indexed Notes, the Indexed Basis]
The undersigned hereby agree that for the purposes of the issue and
sale of Notes denominated in [title of currency or currency unit] (the
"Specified Currency") (and indexed to [title of index basis] (the "Index
Basis")] pursuant to the Distribution Agreement, dated ____ __, 1996 as it may
be amended (the "Distribution Agreement"), the following additions and
modifications shall be made to the Distribution Agreement. The additions and
modifications adopted hereby shall be of the same effect for the sale under the
Distribution Agreement of all Notes denominated in the Specified Currency [and
indexed to the Index Basis], whether offered on an agency or principal basis,
but shall be of no effect with respect to Notes denominated in any currency or
currency unit other than the Specified Currency.
Except as otherwise expressly provided herein, all terms used herein
which are defined in the Distribution Agreement shall have the same meanings as
in the Distribution Agreement. The term[s] Agent [or Agents], as used in the
Distribution Agreement, shall be deemed to refer [only] to the undersigned
Agent[s] for purposes of this Amendment.
[Insert appropriate additions and modifications to the Distribution
Agreement, for example, to opinions of counsel, conditions to obligations and
settlement procedures, etc.]
_______________, 19__
Manor Care, Inc.
By_________________________
Name:
Title:
[Name(s) of Agent(s) participating in the offering of
Notes in the Specified Currency]
By_________________________
Name:
Title:
<PAGE>
MANOR CARE, INC.
and
CHASE MANHATTAN BANK
as Trustee
--------------------
INDENTURE
Dated as of November [ ], 1996
--------------------
Providing for the Issuance of
Debt Securities in Series
<PAGE>
MANOR CARE, INC.
Reconciliation and Tie Between Trust Indenture Act of 1939
and Indenture Provisions*
Trust Indenture
Act Section Indenture Section
ss. 310(a)(1) ................................... 709
(a)(2) ................................... 709
(a)(3) ................................... Not Applicable
(a)(4) ................................... Not Applicable
(b) ................................... 708
................................... 710
ss. 311(a) ................................... 713(a)
713(c)
(b) ................................... 713(b)
(b)(2) ................................... 803(a)(2)
................................... 803(b)
ss. 312(a) ................................... 801
802(a)
(b) ................................... 802(b)
(c) ................................... 802(c)
ss. 313(a) ................................... 803(a)
(b) ................................... 803(b)
(c) ................................... 803(d)
(d) ................................... 803(c)
ss. 314(a) ................................... 804
(b) ................................... Not Applicable
(c)(1) ................................... 102
(c)(2) ................................... 102
(c)(3) ................................... Not Applicable
(d) ................................... Not Applicable
(e) ................................... 102
ss. 315(a) ................................... 701(a)
(b) ................................... 702
803(a)(6)
(c) ................................... 701(b)
(d) ................................... 701(c)
(d)(1) ................................... 701(a)
(d)(2) ................................... 701(c)(2)
(d)(3) ................................... 701(c)(3)
- --------
* This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
2
Trust Indenture
Act Section Indenture Section
(e) ................................... 614
ss. 316(a) ................................... 101
(a)(1)(A) ................................... 602
612
(a)(1)(B) ................................... 613
(a)(2) ................................... Not Applicable
(b) ................................... 608
ss. 317(a)(1) ................................... 603
(a)(2) ................................... 604
(b) ................................... 1103
ss. 318(a) ................................... 107
<PAGE>
TABLE OF CONTENTS(1)
Page
ARTICLE ONE
Definitions and Other Provisions of General Application..... 1
SECTION 101. Definitions................................................. 1
SECTION 102. Compliance Certificates and Opinions........................ 11
SECTION 103. Form of Documents Delivered to Trustee...................... 12
SECTION 104. Acts of Holders. ........................................... 12
SECTION 105. Notices, etc. to Trustee and Company........................ 14
SECTION 106. Notice to Holders; Waiver................................... 14
SECTION 107. Conflict with Trust Indenture Act........................... 16
SECTION 108. Effect of Headings and Table of Contents.................... 16
SECTION 109. Successors and Assigns...................................... 16
SECTION 110. Separability Clause......................................... 16
SECTION 111. Benefits of Indenture....................................... 16
SECTION 112. Governing Law............................................... 16
SECTION 113. Legal Holidays.............................................. 16
SECTION 114. Moneys of Different Currencies To Be Segregated............. 16
SECTION 115. Payment To Be in Proper Currency............................ 16
SECTION 116. Language of Notices, etc.................................... 17
SECTION 117. Changes in Exhibits......................................... 17
ARTICLE TWO
Issuance of Securities...................................... 17
SECTION 201. Creation of Securities in Amount Unlimited.................. 17
SECTION 202. Documents Required for Issuance of Each Series of Securities
Other than Medium-Term Debt Securities.................... 17
SECTION 203. Form of Securities Other than Medium-Term Debt Securities... 22
ARTICLE THREE
Issuance of Medium-Term Debt Securities..................... 22
SECTION 301. Documents Required for Issuance of Each Series of
Medium-Term Debt Securities............................... 22
SECTION 302. Form of Medium-Term Debt Securities......................... 25
ARTICLE FOUR
- --------
1 This table of contents shall not, for any purpose, be deemed to be part of
the Indenture.
-i-
<PAGE>
Page
The Securities................................................ 25
SECTION 401. Form and Denomination......................................... 25
SECTION 402. Execution, Delivery, Dating and Authentication................ 25
SECTION 403. Temporary Securities.......................................... 27
SECTION 404. Registration, Registration of Transfer and Exchange........... 29
SECTION 405. Mutilated, Destroyed, Lost and Stolen Securities.............. 32
SECTION 406. Payment of Interest; Interest Rights Preserved................ 33
SECTION 407. Persons Deemed Owners......................................... 34
SECTION 408. Cancellation.................................................. 34
SECTION 409. Computation of Interest....................................... 35
SECTION 410. Currency and Manner of Payment in Respect of Securities....... 35
SECTION 411. Securities in Global Form..................................... 40
SECTION 412. Registered Global Notes....................................... 41
ARTICLE FIVE
Satisfaction and Discharge.................................... 43
SECTION 501. Termination of Company's Obligations.......................... 43
SECTION 502. Application of Trust Money.................................... 44
SECTION 503. Repayment to Company.......................................... 44
SECTION 504. Reinstatement................................................. 45
SECTION 505. Definitions................................................... 45
ARTICLE SIX
Remedies...................................................... 46
SECTION 601. Events of Default............................................. 46
SECTION 602. Acceleration.................................................. 47
SECTION 603. Other Remedies................................................ 48
SECTION 604. Waiver of Existing Defaults................................... 48
SECTION 605. Control by Majority........................................... 48
SECTION 606. Limitation on Suits........................................... 49
SECTION 607. Rights of Holders To Receive Payments......................... 49
SECTION 608. Collection Suit by Trustee.................................... 49
SECTION 609. Trustee May File Proofs of Claim.............................. 49
SECTION 610. Priorities.................................................... 50
SECTION 611. Undertaking for Costs......................................... 50
SECTION 613. Waiver of Stay or Extension Laws.............................. 50
ARTICLE SEVEN
The Trustee................................................... 51
SECTION 701. Duties of Trustee............................................. 51
SECTION 702. Rights of Trustee............................................. 52
-ii-
<PAGE>
Page
SECTION 703. Individual Rights of Trustee.................................. 52
SECTION 704. Trustee's Disclaimer.......................................... 52
SECTION 705. Notice of Defaults............................................ 52
SECTION 706. Reports by Trustee to Holders................................. 53
SECTION 707. Compensation and Indemnity.................................... 53
SECTION 708. Replacement of Trustee........................................ 53
SECTION 709. Successor Trustee by Merger, etc.............................. 55
SECTION 710. Eligibility; Disqualification................................. 55
SECTION 711. Preferential Collection of Claims Against Company............. 55
SECTION 712. Judgment Currency............................................. 55
SECTION 713. Appointment of Authenticating Agent........................... 56
ARTICLE EIGHT
Holders' Lists and Reports by Trustee and Company............. 58
SECTION 801. Communication by Holders with Other Holders................... 58
SECTION 802. Reports by Trustee............................................ 58
SECTION 803. Reports by Company............................................ 58
ARTICLE NINE
Consolidation, Merger, Conveyance or Transfer................. 58
SECTION 901. Company May Consolidate, etc., Only on Certain Terms.......... 58
SECTION 902. Successor Corporation Substituted............................. 59
ARTICLE TEN
Supplemental Indentures...................................... 59
SECTION 1001. Supplemental Indentures Without Consent of Holders........... 59
SECTION 1002. Supplemental Indentures with Consent of Holders.............. 60
SECTION 1003. Execution of Supplemental Indentures......................... 62
SECTION 1004. Effect of Supplemental Indentures............................ 62
SECTION 1005. Conformity with Trust Indenture Act.......................... 62
SECTION 1006. Reference in Securities to Supplemental Indentures........... 62
ARTICLE ELEVEN
Covenants.................................................... 63
SECTION 1101. Payment of Principal, Premium and Interest................... 63
SECTION 1102. Maintenance of Office or Agency.............................. 63
SECTION 1103. Money for Securities Payments To Be Held in Trust............ 64
SECTION 1104. Restrictions on Secured Debt................................. 65
SECTION 1105. Restrictions on Sale and Leaseback Transactions.............. 67
SECTION 1106. Limitation on Affiliate Transactions......................... 68
SECTION 1107. Statement by Officers as to Default.......................... 68
-iii-
<PAGE>
Page
SECTION 1108. Waiver of Certain Covenants.................................. 69
SECTION 1109. Additional Amounts........................................... 69
ARTICLE TWELVE
Redemption of Securities..................................... 70
SECTION 1201. Applicability of Article..................................... 70
SECTION 1202. Election To Redeem; Notice to Trustee........................ 70
SECTION 1203. Selection by Trustee of Securities To Be Redeemed............ 70
SECTION 1204. Notice of Redemption......................................... 70
SECTION 1205. Deposit of Redemption Price.................................. 71
SECTION 1206. Securities Payable on Redemption Date........................ 71
SECTION 1207. Securities Redeemed in Part.................................. 72
ARTICLE THIRTEEN
Sinking Funds................................................ 72
SECTION 1301. Applicability of Article..................................... 72
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities........ 73
SECTION 1303. Redemption of Securities for Sinking Fund.................... 73
<PAGE>
EXHIBIT A Form of Debt Securities
EXHIBIT B.1 Form of Certificate to be given by Person entitled to
received Bearer Security
EXHIBIT B.2 Form of Certificate to be given by Euro-clear and CEDEL S.A. in
connection with the Exchange of a portion of Temporary Global
Security
EXHIBIT B.3 Form of Certificate to be given by Euro-clear and CEDEL S.A. to
obtain Interest prior to an Exchange Date
EXHIBIT B.4 Form of Certificate to be given by Beneficial Owners to obtain
Interest prior to an Exchange Date
EXHIBIT B.5 Form of Confirmation to be sent to Purchasers of Bearer
Securities
-v-
<PAGE>
INDENTURE dated as of November [ ], 1996, between MANOR CARE, INC., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 11555 Darnestown
Road, Gaithersburg, Maryland 20878-3200, and The Chase Manhattan Bank, as
Trustee (herein called the "Trustee"), the office of the Trustee at which at the
date hereof its corporate trust business is principally administered being 450
W. 33rd Street, New York, New York 10001-2697.
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 unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided,
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 covenanted and 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 in the United States of America at the date of such
computation; and
<PAGE>
(4) 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.
Certain terms, used principally within an Article of this Indenture,
may be defined in that Article.
"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.
"Affiliate Transaction" has the meaning specified in Section 1106.
"Applicable Percentage" means (i) 15%, if the aggregate principal
amount of Securities then Outstanding exceeds $100,000,000, (ii) 20%, if the
aggregate principal amount of Securities then Outstanding exceeds $50,000,000
but is less than or equal to $100,000,000 or (iii) 25%, if the aggregate
principal amount of Securities Outstanding is less than or equal to $50,000,000.
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable and at any date as of which the amount thereof is
to be determined, the lesser of (i) the fair value of the property subject to
such lease (as determined in good faith by the chief financial or accounting
officer of the Company) and (ii) the total net amount of rent required to be
paid by such Person under such lease during the remaining primary term thereof,
discounted from the respective due dates thereof to such date at the weighted
average interest borne by the particular series of Securities compounded
annually. The net amount of rent required to be paid under any such lease for
any such period shall be the aggregate amount of the rent payable by the lessee
with respect to such period after excluding amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments, water rates
and similar charges. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the amount of
such penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 713 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper of general circulation in the
place of publication, printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays.
<PAGE>
3
Whenever successive weekly publications in an Authorized Newspaper are
authorized or required hereunder, they may be made (unless otherwise expressly
provided herein) on the same or different days of the week and in the same or
different Authorized Newspapers.
"Bearer Security" means any Security which is not registered in the
Security Register as to both principal and interest (including without
limitation any Security in temporary or definitive global bearer form).
"Board of Directors" means either the board of directors of the
Company, any officer of the Company duly authorized to act in the name of or on
behalf of that board or any committee consisting of one or more persons, who
need not be directors, duly authorized to act in the name of or on behalf 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.
"Business Day", when used with respect to any Place of Payment or
place of publication, means each day on which commercial banks and foreign
exchange markets settle payments in such Place of Payment or place of
publication, or as otherwise specified for a series of Securities pursuant to
Section 202 or Section 301, as the case may be. Unless otherwise specified for a
series of Securities pursuant to Section 202 or Section 301, as the case may be,
when used with respect to Securities bearing interest at a rate or rates
determined by reference to London interbank offered notes for deposits in U.S.
Dollars, "Business Day" shall exclude any day on which commercial banks and
foreign exchange markets do not settle payments in London.
"Capital Stock", as applied to the stock of any corporation, means the
capital stock of every class whether now or hereafter authorized, regardless of
whether such capital stock shall be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of upon the voluntary or involuntary liquidation, dissolution
or winding up of such corporation.
"Commission" means the Securities and Exchange Commission, as from
time to constituted, created under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties from time
to time assigned to it under the Trust Indenture Act, then the body performing
such duties at such time.
"Common Depositary" has the meaning specified in Section 403.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
<PAGE>
4
"Company Request", "Request of the Company", "Company Order" or "Order
of the Company" means a written request or order signed in the name of the
Company by an Officer of the Company and delivered to the Trustee.
"Component Currency" has the meaning specified in Section 410(i).
"Consolidated Net Assets" means, with respect to any Person as of any
date of determination, the total assets of such person and its Subsidiaries on a
consolidated basis, less current liabilities of such Person and its Subsidiaries
on a consolidated basis as of such date, all computed in accordance with
generally accepted accounting principles.
"Conversion Date" has the meaning specified in Section 410(e).
"Conversion Rate" has the meaning specified in Section 712.
"Corporate Trust Office" means the office of the Trustee in New York,
New York, at which at any particular time its corporate trust business shall be
administered, which office at the date hereof is 450 W. 33rd Street, New York,
New York 10001-2697, except that with respect to the presentation of Securities
(or Coupons, if any, representing an installment of interest) for payment or for
registration of transfer and exchange, such term shall mean the office or the
agency of the Trustee in said city at which at any particular time its corporate
agency business shall be conducted.
"corporation" includes corporations, associations, companies and
business trusts.
"Coupon" or "coupon" means any interest coupon appertaining to a
Bearer Security.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect.
"Debt" means indebtedness for money borrowed.
"Defaulted Interest" has the meaning specified in Section 406.
"Discharged" has the meaning specified in Section 505.
"Dollar" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 410(h).
<PAGE>
5
"Dollar Equivalent of the Foreign Currency" has the meaning specified
in Section 410(g).
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Euro-clear" means the operator of the Euro-clear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 601.
"Exchange Rate Agent" means the entity appointed by the Company
pursuant to Section 104(e). Unless otherwise specified as contemplated by
Section 202 or Section 301, as the case may be, the Luxembourg Stock Exchange
shall act as Exchange Rate Agent for purposes of Section 410 in the case of each
series of Securities listed on the Luxembourg Stock Exchange.
"Exchange Rate Officers' Certificate" means a telecopy or tested telex
or a certificate setting forth (i) the applicable Official Currency Unit
Exchange Rate and (ii) the Dollar or Foreign Currency or currency unit amounts
of principal, premium, if any, and interest, if any, respectively (on an
aggregate basis and on the basis of a Security having a principal amount of
1,000 units in the relevant currency or currency unit), payable on the basis of
such Official Currency Unit Exchange Rate, sent (in the case of a telecopy or
telex) or executed (in the case of a certificate) by the Controller or any
Assistant Controller or by the Treasurer or any Assistant Treasurer of the
Company and delivered to the Trustee; such telecopy, tested telex or certificate
need not comply with Section 102.
"Existing Mortgages" means, with respect to any series of Securities,
Mortgages on property or assets of the Company or any Subsidiary of the Company
existing on, or provided for in agreements existing on, the Issue Date for such
series.
"Finance Subsidiary" means a Subsidiary of the Company engaged
primarily in pricing or assisting in financing the acquisition or disposition of
products of the Company or of a Subsidiary of the Company by dealers,
distributors or customers.
"Foreign Currency" means a currency issued by the government of any
country other than the United States of America.
"Foreign Government Securities" has the meaning specified in Section
505.
"Foreign Subsidiary" means a Subsidiary of the Company which is
incorporated or organized in a jurisdiction outside the United States and any
Subsidiary of such a Subsidiary.
<PAGE>
6
"Funded Debt" means (a) all indebtedness for money borrowed 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 which is by its terms
renewable or extendible beyond 12 months from such date at the option of the
borrower and (b) rental obligations payable more than 12 months from such date
under leases which are capitalized in accordance with generally accepted
accounting principles (such rental obligations to be included as Funded Debt at
the amount so capitalized and to be included for the purposes of the definition
of Consolidated Net Assets both as an asset and as Funded Debt at the amount so
capitalized).
"Holder" or "holder" means, with respect to a Registered Security, the
Person in whose name at the time a particular Registered Security is registered
in the Security Register and, with respect to a Bearer Security and/or a Coupon,
the bearer thereof.
"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
and shall include the terms of particular series of Securities established as
contemplated by Section 202 or Section 301, as the case may be.
"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.
"Issue Date" means, with respect to any series of Securities, the
first date on which Securities of such series are issued under this Indenture.
"Market Exchange Rate" has the meaning specified in Section 410(i).
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment 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.
"Medium-Term Debt Securities" has the meaning specified in Section
301.
"Medium-Term Debt Securities Certificate" shall mean a certificate
signed by an Officer of the Company, or any other employee of the Company
designated by a Board Resolution as having the authority to deliver a
Medium-Term Debt Securities Certificate hereunder.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind.
<PAGE>
7
"Non-Recourse Debt" means Debt or that portion of Debt (i) as to which
neither the Company nor its Subsidiaries (other than a Non-Recourse Subsidiary)
(A) provide credit support (including any undertaking, agreement or instrument
which would constitute Debt), (B) are directly or indirectly liable or (C)
constitute the lender and (ii) in respect of which a default (including any
rights which the holders thereof may have to take enforcement action against a
Non-Recourse Subsidiary) would not permit (upon notice, lapse of time or both)
any holder of any other Debt of the Company or its Subsidiaries (including any
Non-Recourse Subsidiary) to declare a default on such other Debt or cause a
payment thereof to be accelerated or payable prior to its Stated Maturity.
"Non-Recourse Subsidiary" means a Subsidiary of the Company which (i)
has not acquired any assets (other than cash) directly or indirectly from the
Company or any Subsidiary of the Company, (ii) only owns assets acquired after
the Issue Date and on or prior to the date such entity becomes a Subsidiary of
the Company and (iii) has no Debt other than Non-Recourse Debt.
"Officer" means the Chairman of the Board, the President, any Senior
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer, or an Officer and an Assistant
Secretary of the Company, and delivered to the Trustee. Each such Officers'
Certificate shall contain the statements provided in Section 102 if and to the
extent required by the provisions of such Section.
"Official Currency Unit Exchange Rate" means, with respect to any
payment to be made hereunder, the exchange rate between the relevant currency
unit and the currency or currency unit of payment calculated by the Exchange
Rate Agent for the Securities of the relevant series (in the case of ECU,
reported by the Commission of the European Communities and on the date hereof
based on the rates in effect at 2:30 p.m., Brussels time, on the exchange
markets of the Component Currencies of ECU), on the Business Day (in the city in
which such Exchange Rate Agent has its principal office) immediately preceding
delivery of any Exchange Rate Officers' Certificate.
"Opinion of Counsel" means a written opinion of legal counsel for the
Company, who may be an employee of the Company. Each Opinion of Counsel shall
contain the statements provided in Section 102 if and to the extent required by
the provisions of such Section.
"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 602.
"Outstanding" or "outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities theretofore authenticated
and delivered under this Indenture, except:
<PAGE>
8
(i) Securities theretofore canceled by the Trustee or delivered
or deemed delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount and in the required currency or currency unit 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
this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to Section 405 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 any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Outstanding Securities or the
number of votes entitled to be cast by each Holder of a Security in respect of
such Security at any such meeting, (i) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 602, (ii) the principal amount of a Security
denominated in a Foreign Currency or currency unit shall be the Dollar
equivalent obtained by converting the specified Foreign Currency or currency
unit into Dollars at the Market Exchange Rate on the date of such determination
(or, in the case of a Security denominated in a currency unit for which there is
no Market Exchange Rate, the Dollar equivalent obtained by adding together the
results obtained by converting the Specified Amount of each Component Currency
into Dollars at the Market Exchange Rate for each such Component Currency on the
date of such determination) of the principal amount (or, in the case of an
Original Issue Discount Security, of the amount determined as provided in (i)
above) of such Security, and (iii) 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 or waiver, only
parties which the Trustee 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.
<PAGE>
9
"Paying Agent" means the Trustee or any other Person authorized by the
Company to pay the principal of (and premium, if any) or interest, if any, on
any Securities on behalf of the Company.
"Person" or "person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, 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 premium, if any)
and interest, if any, on the Securities of that series are payable as specified
in accordance with Section 202 or Section 301, as the case may be.
"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 purpose of this definition, any Security
authenticated and delivered under Section 405 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.
"Principal Property" means any real estate or warehouse owned or
leased by the Company or any Restricted Subsidiary of the Company which is
located within the United States of America and the gross book value (including
related land and improvements thereon and all machinery and equipment included
therein without deduction of any depreciation reserves) of which on the date as
of which the determination is being made exceeds 2% of Consolidated Net Assets,
other than (a) any property which in the opinion of the Board of Directors is
not of material importance to the total business conducted by the Company as an
entirety or (b) any portion of a particular property which is found by the Board
of Directors not to be of material importance to the use or operation of such
property.
"Realty Subsidiary" means a Subsidiary of the Company engaged
primarily in the development and sale or financing of real property.
"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, in the currency or currency unit in which such
Security is payable, at which it is to be redeemed pursuant to this Indenture.
"Registered Global Note" has the meaning specified in Section 412.
"Registered Security" means any Security registered in the Security
Register (including without limitation any Security in temporary or definitive
global registered form).
<PAGE>
10
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 202 or Section 301, as the case may be,
which date shall be, unless otherwise specified pursuant to Section 202 or
Section 301, as the as the case may be, the fifteenth day preceding such
Interest Payment Date, whether or not such day shall be a Business Day.
"Required Currency" has the meaning specified in Section 115.
"Responsible Trust Officer", when used with respect to the Trustee,
means the chairman or any vice chairman of the board of directors, the chairman
or any vice chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant vice president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, the cashier, any assistant cashier, any trust officer
or assistant trust officer, the controller or any assistant controller 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 a Subsidiary of the Company (a)
substantially all the property of which is located, or substantially all the
business of which is carried on, within the United States of America and (b)
which owns a Principal Property.
"Sale and Leaseback Transaction" has the meaning specified in Section
1105.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities (including Medium-Term Debt
Securities) authenticated and delivered under this Indenture and, in the case of
any Bearer Security, shall include where appropriate any Coupons appertaining
thereto.
"Security Register" has the meaning specified in Section 404.
"Security Registrar" means the Person appointed as the initial
Security Registrar in Section 404 or any Person appointed by the Company as a
successor or replacement Security Registrar.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 406.
"Specified Amount" has the meaning specified in Section 410(i).
"Stated Maturity", when used with respect to any Security (or Coupon,
if any, representing an installment of interest) or any installment of principal
thereof or interest thereon, means the date specified in such Security (or
Coupon) as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
<PAGE>
11
"Subsidiary" of any specified corporation means (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by the specified corporation or by one or more of its
Subsidiaries, or both or (ii) any other person (other than a corporation) in
which the specified corporation or one or more of its Subsidiaries, or both,
shall at the time, directly or indirectly, have greater than a 50% ownership
interest.
"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
amended by the First Indenture Reform Act of 1990, and as in force at the date
as of which this instrument was executed, except as provided in Section 1005.
"United States" means the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"U.S. Book-Entry Securities" means Securities represented by a
definitive global Security registered in the name of the U.S. Depositary or its
nominee.
"U.S. Depositary" means a clearing agency registered under the
Exchange Act, or any successor thereto, which shall in either case be designated
by the Company pursuant to Section 202 or Section 301, as the case may be, until
a successor U.S. Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "U.S. Depositary" shall mean or
include each Person who is then a U.S. Depositary hereunder, and if at any time
there is more than one such Person, "U.S. Depositary" as used with respect to
the Securities of any series shall mean the U.S. Depositary with respect to the
Securities of that series.
"U.S. Government Obligations" has the meaning specified in Section
505.
"Valuation Date" has the meaning specified in Section 410(e).
"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".
"Voting Stock", as applied to the stock of any corporation, means
stock of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect members of the board of directors (or other
governing body) or such corporation other than stock having such power only by
reason of the happening of a contingency.
<PAGE>
12
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 an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Unless expressly otherwise specified with respect to any certificate
or opinion provided for in this Indenture, every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture (other than annual certificates provided pursuant to Section 1107)
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 or not, 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 opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate 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
<PAGE>
13
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. (a) The principal amount and serial
numbers of Bearer Securities held by any Person, and the date of holding the
same, may be proved by the production of such Bearer Securities or by a
certificate executed by any trust company, bank, banker or other depository,
wherever situated, showing that at the date therein mentioned such Person had on
deposit with such depository, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and the Company may assume
that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, (2) such Bearer Security is produced to the Trustee
by some other Person, (3) such Bearer Security is surrendered in exchange for a
Registered Security, or (4) such Bearer Security is no longer Outstanding.
(b) The fact and date of execution of any such instrument or writing
pursuant to clause (a) above, the authority of the Person executing the same and
the principal amount and serial numbers of Bearer Securities held by the Person
so executing such instrument or writing and the date of holding the same may
also be proved in any other manner which the Trustee deems sufficient; and the
Trustee may in any instance require further proof with respect to any of the
matters referred to in this clause.
(c) The principal amount and serial numbers of Registered Securities
held by any Person and the date of holding the same shall be proved by the
Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of a Holder shall bind every future Holder of the same
Security and/or Coupon and the Holder of every Security and/or Coupon 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 and/or Coupon.
(e) Whenever any Act is to be taken hereunder by the Holders of two or
more series of Securities denominated in different currencies (or currency
units), then, for the purpose of determining the principal amount of Securities
held by such Holders, the aggregate principal amount of the Securities
denominated in a Foreign Currency (or any currency unit) shall be deemed to be
that amount determined by the Company or by an authorized Exchange Rate Agent
and evidenced to the Trustee by an Officers' Certificate as of the date the
taking of such Act by the Holders of the requisite percentage in principal
amount of the Securities is evidenced to the Trustee to be equal to the Dollar
equivalent obtained by converting the specified Foreign
<PAGE>
14
Currency or currency unit into Dollars at the Market Exchange Rate on such date
(or, in the case of a Security denominated in a currency unit for which there is
no Market Exchange Rate, the Dollar equivalent obtained by adding together the
results obtained by converting the Specified Amount of each Component Currency
into Dollars at the Market Exchange Rate for each such Component Currency on
such date) of the principal amount (or, in the case of an Original Issue
Discount Security, the principal amount thereof that would be due and payable as
of the declaration of acceleration of the Maturity thereof pursuant to Section
602 on such date) of such Security. An Exchange Rate Agent may be authorized in
advance or from time to time by the Company. Any such determination by the
Company or by any such Exchange Rate Agent shall be conclusive and binding on
all Holders, the Company and the Trustee, and neither the Company nor any such
Exchange Rate Agent shall be liable therefor in the absence of bad faith.
(f) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding Securities
shall be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
SECTION 105. Notices, etc. to Trustee and Company. Any notice or
communication shall be sufficiently given if in writing and delivered in person
or by facsimile transmission or mailed by first-class mail, postage prepaid,
addressed as follows:
If to the Company:
Manor Care, Inc.
11555 Darnestown Road
Gaithersburg, Maryland 20878-3200
Attention: Secretary
<PAGE>
15
If to the Trustee:
The Chase Manhattan Bank
450 W. 33rd Street
New York, New York, 10001-2697
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to him
at his address as it appears on the registration books of the Registrar and
shall be sufficiently given to him if so mailed within the time prescribed.
Failure to mail a notice of communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it; provided, however, that any notice or
communication to the Trustee shall be effective only upon receipt.
SECTION 106. Notice to Holders; Waiver. (a) Where this Indenture
provides for notice to Holders of any event:
(i) if any of the Securities affected by such event are
Registered Securities, such notice shall be sufficiently given (unless
otherwise herein expressly provided or unless otherwise specified in
such Securities) if in writing and delivered in person, mailed,
first-class postage prepaid or sent by overnight courier, to each
Holder affected by such event, at his address as it appears in the
Security Register, within the time prescribed for the giving of such
notice, and
(ii) if any of the Securities affected by such event are Bearer
Securities, such notice shall be sufficiently given (unless otherwise
herein expressly provided or unless otherwise specified in such
Securities) if (A) published once in an Authorized Newspaper in New
York City and London and, if applicable, in Luxembourg or such other
place of publication as may be required pursuant to the rules and
regulations of any securities exchange on which such Securities are
listed, and (B) delivered in person, mailed, first-class postage
prepaid or sent by overnight courier to such Persons whose names were
previously filed with the Trustee, within the time prescribed for the
giving of such notice.
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 to Holders of
Registered Securities in the manner specified above, then such notification as
shall be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder. In case by reason of the suspension of
publication of any Authorized Newspaper or Authorized Newspapers or by reason
<PAGE>
16
of any other cause it shall be impracticable to publish any notice to Holders of
Bearer Securities as provided above, then such notification to Holders of Bearer
Securities as shall be given with the approval of the Trustee shall constitute
sufficient notice to such Holders for every purpose hereunder.
(b) In any case where notice to a Holder of Registered Securities is
given in any manner specified in paragraph (a) above, such notice shall be
conclusively presumed to have been duly given, whether or not such Holder
receives such notice. In any case where notice to Holders of Registered
Securities is given in any manner specified in paragraph (a) above, neither the
failure to deliver, mail or send such notice, nor any defect in any notice so
mailed or sent, to any particular Holder of a Registered Security shall affect
the sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Neither the failure to give notice by publication to
Holders of Bearer Securities as provided in Paragraph (a) above, nor any defect
in any notice so published, shall affect the sufficiency of any notice to
Holders of Registered Securities given as provided herein.
(c) 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 of Securities 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.
SECTION 107. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with the duties imposed by any of Sections
310 to 317, inclusive, of the Trust Indenture Act through operation of Section
318(c) thereof, such imposed duties shall control.
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 and a Holder shall have no claim
therefor against any party hereto.
SECTION 111. Benefits of Indenture. Nothing in this Indenture or in
the Securities or Coupons, 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.
<PAGE>
17
SECTION 112. Governing Law. THIS INDENTURE AND THE SECURITIES AND
COUPONS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 113. Legal Holidays. Except as otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, in any case
where any Interest Payment Date, Redemption Date or Stated Maturity of any
Security or Coupon shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of such Security or
Coupon) 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 or Redemption Date, or at the Stated Maturity, as
the case may be, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, to the next succeeding Business Day at such Place of Payment.
SECTION 114. Moneys of Different Currencies To Be Segregated. The
Trustee shall segregate moneys, funds and accounts held by the Trustee hereunder
in one currency (or currency unit) from any moneys, funds or accounts in any
other currencies (or currency units), notwithstanding any provision herein which
would otherwise permit the Trustee to commingle such amounts.
SECTION 115. Payment To Be in Proper Currency. In the case of any
Security denominated in any particular currency or currency unit (the "Required
Currency"), subject to applicable law and except as otherwise provided herein,
therein or in or pursuant to the related Board Resolution, Medium-Term Debt
Securities Certificate or supplemental indenture, the obligation of the Company
to make any payment of principal, premium or interest thereon shall not be
discharged or satisfied by any tender by the Company, or recovery by the Trustee
in any currency or currency unit other than the Required Currency, except to the
extent that such tender or recovery shall result in the Trustee's timely holding
the full amount of the Required Currency then due and payable. If any such
tender or recovery is made in other than the Required Currency, the Trustee may
take such actions as it considers appropriate to exchange such other currency or
currency unit for the Required Currency. The costs and risks of any such
exchange, including without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall be liable for any
shortfall or delinquency in the full amount of the Required Currency then due
and payable, and in no circumstances shall the Trustee be liable therefor. The
Company hereby waives any defense of payment based upon any such tender or
recovery which is not in the Required Currency, or which, when exchanged for the
Required Currency by the Trustee, is less than the full amount of the Required
Currency then due and payable
SECTION 116. Language of Notices, etc. Any request, demand,
authorization, direction, notice, consent or waiver required or permitted under
thus Indenture shall be in the English language, except that any published
notice may be in an official language of the country of publication.
<PAGE>
18
SECTION 117. Changes in Exhibits. At any time and from time to time,
the Company may substitute a new form, or add new forms, of the Exhibits hereto.
Such substitution shall be effective upon receipt by the Trustee of such new
form of Exhibit and a Board Resolution or Officers' Certificate adopting such
new form of Exhibit, and thereafter all references in this Indenture to such
Exhibit shall be deemed to refer to such new form of Exhibit.
ARTICLE TWO
Issuance of Securities
SECTION 201. Creation of Securities in Amount Unlimited. An unlimited
aggregate principal amount of Securities may be issued pursuant to this Article
Two and, in the case of Medium-Term Debt Securities, pursuant to Article Three.
The Securities (including Medium-Term Debt Securities) may be authenticated and
delivered, as authorized by the Board of Directors, in an unlimited number of
series.
SECTION 202. Documents Required for Issuance of Each Series of
Securities Other than Medium-Term Debt Securities. At any time and from time to
time, Securities of each series created pursuant to the provisions of this
Article Two may be executed by the Company and delivered to the Trustee and
shall be authenticated by the Trustee and delivered to, or upon the order of,
the Company upon receipt by the Trustee of the following:
(a) A Board Resolution or Board Resolutions authorizing the
execution, authentication and delivery of the Securities of the
series, and specifying, to the extent applicable, the following items:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Article Two (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 403, 404,
405, 1006 or 1207 and except for any Securities which, pursuant to
Section 402, are deemed never to have been authenticated and delivered
hereunder);
(3) the date or dates on which the principal (and premium, if
any) of any of the Securities of the series are payable or the method
of determination thereof;
(4) the rate or rates (which may be fixed or variable) per annum,
or the method of determination thereof, at which any of the Securities
of the series shall bear interest, if any, the date or dates from
<PAGE>
19
which such interest shall accrue, the Interest Payment Dates on which
such interest shall be payable and the Regular Record Date for the
interest payable on any Registered Securities on any Interest Payment
Date;
(5) the place or places where the principal of (and premium, if
any) and interest, if any, on any of the Securities and Coupons, if
any, of the series shall be payable and the office or agency for the
Securities of the series maintained by the Company pursuant to Section
1102;
(6) the period or periods within which, the price or prices at
which and the terms and conditions upon which any of the Securities of
the series may be redeemed, in whole or in part, at the option of the
Company;
(7) the terms of any sinking fund and 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 within which, the price or prices at
which and the terms and conditions upon which Securities of the series
shall be so redeemed or purchased, in whole or in part;
(8) the terms of the obligation of the Company, if any, to permit
the conversion of the Securities of the series into stock or other
securities of the Company or of any other corporation;
(9) the terms, if any, for the attachment to Securities of the
series of warrants, options or other rights to purchase or sell stock
or other securities of the Company;
(10) if other than denominations of $1,000 and in any integral
multiple thereof, if Registered Securities, and $5,000, if Bearer
Securities, for Securities denominated in Dollars, the denominations
in which the Securities of the series shall be issuable;
(11) if other than the principal amount thereof, the portion of
the principal amount of any of the Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 602;
(12) the application, if any, of Section 501, or such other means
of satisfaction and discharge and/or defeasance as may be specified
for the Securities and Coupons, if any, of a series;
(13) any deletions or modifications of or additions to the Events
of Default set forth in Section 601 or covenants of the Company set
forth
<PAGE>
20
in Article Nine or Eleven pertaining to the Securities of the series
(including without limitation whether the provisions of Section 1104
or Section 1105 shall not be applicable to the Securities of the
series);
(14) the forms of the Securities and Coupons, if any, of the
series;
(15) if other than Dollars, the currency or currencies, or
currency unit or units, in which the Securities of such series will be
denominated and/or in which payment of the principal of (and premium,
if any) and interest, if any, on any of the Securities of the series
shall be payable and the Exchange Rate Agent, if any, for such series;
(16) if the principal of (and premium, if any) or interest, if
any, on any of the Securities of the series are to be payable at the
election of the Company or a Holder thereof, or under some or all
other circumstances, in a currency or currencies, or currency unit or
units, other than that in which the Securities are denominated, the
period or periods within which, and the terms and conditions upon
which, such election may be made, or the other circumstances under
which any of the Securities are to be so payable, including without
limitation the application of Section 410(b) and any deletions to,
modifications of or additions to the provisions thereof, and any
provision requiring the Holder to bear currency exchange costs by
deduction from such payments;
(17) if the amount of payments of principal of (and premium, if
any) or interest, if any, on any of the Securities of the series may
be determined with reference to an index based on (i) a currency or
currencies or currency unit or units other than that in which such
Securities are stated to be payable or (ii) any method, not
inconsistent with the provisions of this Indenture, specified in or
pursuant to such Board Resolution, then in each case (i) and (ii) the
manner in which such amounts shall be determined;
(18) whether the Securities of the series are to be issued as
Registered Securities or Bearer Securities (with or without Coupons),
or any combination thereof, whether Bearer Securities may be exchanged
for Registered Securities of the series and whether Registered
Securities may be exchanged for Bearer Securities of the series (if
permitted by applicable laws and regulations) and the circumstances
under which and the place or places where any such exchanges, if
permitted, may be made; and whether any Securities of the series are
to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in definitive global form
with or without Coupons and, if so, whether beneficial owners of
interests in any such definitive global Security may exchange such
interests for Securities of such series and of like tenor of
<PAGE>
21
any authorized form and denomination and the circumstances under which
and the place or places where any such exchanges may occur, if other
than in the manner provided in Section 404;
(19) if the Securities and Coupons, if any, of the series are to
be issued upon the exercise of warrants, the time, manner and place
for such Securities and Coupons, if any, to be authenticated and
delivered;
(20) whether and under what circumstances and with what
procedures and documentation the Company will pay additional amounts
on any of the Securities and Coupons, if any, of the series to any
Holder who is not a U.S. Person (including a definition of such term),
in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Company will have the option to
redeem such Securities rather than pay additional amounts (and the
terms of any such option);
(21) the Person to whom any interest on any Registered 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,
the manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon
presentation and surrender of the Coupons appertaining thereto as they
severally mature and the extent to which, or the manner in which, any
interest payable on a temporary global Security on an Interest Payment
Date will be paid if other than in the manner provided in Section 403;
and
(22) whether the Securities of the series shall be issued in
whole or in part in the form of one or more global Securities and, in
such case, the U.S. Depositary or any Common Depositary for, and any
other provisions relating to, such global Security or global
Securities; and if the Securities of the series are issuable only as
Registered Securities, (A) the manner in which and the circumstances
under which Registered Global Notes representing Securities of the
series may be exchanged for Registered Securities in definitive form,
if other than, or in addition to, the manner and circumstances
specified in Section 412, and (B) any other provisions that may be
necessary or desirable to effect compliance with the rules,
regulations, practices and policies of the U.S. Depositary from time
to time in effect, which provisions may or may not be consistent with
Section 412; and
(23) any other terms of any of the Securities of the series
(which terms shall not be inconsistent with the provisions of this
Indenture).
<PAGE>
22
If any of the terms of the series are established by action taken
pursuant to a Board Resolution or Board Resolutions, an Officers'
Certificate certifying as to such action also shall be delivered to
the Trustee.
(b) In case the Securities of the series to be authenticated and
delivered are to be created pursuant to one or more supplemental
indentures, such supplemental indenture or indentures, accompanied by
a Board Resolution or Board Resolutions authorizing such supplemental
indenture or indentures and designating the new series to be created
and prescribing pursuant to paragraph (a) above, consistent with the
applicable provisions of this Indenture, the terms and provisions
relating to the Securities of the series.
(c) Either (i) a certificate or other official document
evidencing the due authorization, approval or consent of any
governmental body or bodies, at the time having jurisdiction in the
premises, together with an Opinion of Counsel that the Trustee is
entitled to rely thereon and that the authorization, approval or
consent of no other governmental body is required, or (ii) an Opinion
of Counsel that no authorization, approval or consent of any
governmental body is required.
(d) An Opinion of Counsel that all instruments furnished to the
Trustee conform to the requirements of this Indenture and constitute
sufficient authority hereunder for the Trustee to authenticate and
deliver the Securities and to deliver the Coupons, if any, of the
series; that all conditions precedent provided for in this Indenture
relating to the authentication and delivery of the Securities and
delivery of the Coupons, if any, of the series have been complied with
and the Company is duly entitled to the authentication and delivery of
the Securities and Coupons, if any, of the series in accordance with
the provisions of this Indenture; that all laws and requirements with
respect to the form and execution by the Company of the supplemental
indenture, if any, and the execution and delivery by the Company of
the Securities and Coupons, if any, of the series have been complied
with; that the Company has corporate power to execute and deliver the
supplemental indenture, if any, and to issue the Securities and
Coupons, if any, of the series and has duly taken all necessary
corporate action for those purposes; and that the supplemental
indenture, if any, as executed and delivered and the Securities and
Coupons, if any, of the series, when issued, will be the legal, valid
and binding obligations of the Company enforceable against the Company
in accordance with their terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other
laws affecting creditors' rights generally from time to time in
effect, the enforceability of the Company's obligations also being
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law));
that the Securities and Coupons, if any, of the series, when issued,
will be entitled to the benefits of this Indenture, equally and
ratably with all other Securities and Coupons, if any, of such series
theretofore issued and then outstanding hereunder; and that the amount
<PAGE>
23
of Securities then outstanding under this Indenture, including the
Securities of the series, will not exceed the amount at the time
permitted by law or this Indenture.
(e) An Officers' Certificate stating that the Company is not in
default under this Indenture and that the issuance of the Securities
and Coupons, if any, of the series will not result in any breach of
any of the terms, conditions or provisions of, or constitute a default
under, the Company's certificate of incorporation or by-laws or any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is a party or by which it is bound, or any order of
any court or administrative agency entered in any proceeding to which
the Company is a party or by which it may be bound or to which it may
be subject; and that all conditions precedent provided in this
Indenture relating to the authentication and delivery of the
Securities and Coupons, if any, of the series have been complied with.
(f) Such other documents as the Trustee may reasonably require.
SECTION 203. Form of Securities Other than Medium-Term Debt
Securities. The Securities and Coupons, if any, of each series shall be in such
forms as shall be specified as contemplated by Section 202.
ARTICLE THREE
Issuance of Medium-Term Debt Securities
SECTION 301. Documents Required for Issuance of Each Series of
Medium-Term Debt Securities. At any time, and from time to time, Securities
(sometimes referred to herein as "Medium-Term Debt Securities") of each series
created pursuant to the provisions of this Article Three may be executed by the
Company and delivered to the Trustee and shall be authenticated by the Trustee
and delivered to, or upon the order of, the Company upon receipt by the Trustee
of the following:
(a) A Board Resolution or Board Resolutions authorizing the
execution, authentication and delivery of Medium-Term Debt Securities
up to a specified aggregate principal amount, in such series and
subject to such terms as shall be established by officers of the
Company authorized by such resolutions to establish such series and
terms.
(b) A Medium-Term Debt Securities Certificate requesting the
Trustee to authenticate and deliver Medium-Term Debt Securities of a
series as contemplated by Section 402, and specifying, to the extent
applicable, with respect to the Medium-Term Debt Securities of the
particular series, authorized pursuant to the Board Resolution or
Board Resolutions referred to in paragraph (a) above, the terms
required by Section 202(a) and the following additional terms:
<PAGE>
24
(1) the method of determining the dates of the Medium-Term Debt
Securities of the series; and
(2) if other than the forms set forth in Exhibit A hereto, the
forms of the Medium-Term Debt Securities and Coupons, if any, of the
series.
For purposes of this Section 301 only, all references in Section
202(a) to "Securities" shall be deemed to be references to
"Medium-Term Debt Securities", and all references to "this Article
Two" shall be deemed to be references to "this Article Three".
Unless the Company shall be required to deliver an Officers'
Certificate pursuant to paragraph (d) below in connection with the
authentication of the Medium-Term Debt Securities of the series, the
delivery of such Medium-Term Debt Securities Certificate to the
Trustee shall be deemed to be a certification by the Company that all
matters certified in the most recent Officers' Certificate delivered
to the Trustee pursuant to paragraph (d) below continue to be true and
correct, as if such Officers' Certificate related to the Medium-Term
Debt Securities covered by such Medium-Term Debt Securities
Certificate, on and as of the date of such Medium-Term Debt Securities
Certificate. The delivery of such Medium-Term Debt Securities
Certificate also shall be deemed to be a certification that the Board
Resolution or Board Resolutions referred to in paragraph (a) above are
in full force and effect on and as of the date of such Medium-Term
Debt Securities Certificate and that the terms and form or forms of
the Medium-Term Debt Securities and Coupons, if any, of the series
have been established by an officer or officers of the Company
authorized by such Board Resolution or Board Resolutions in accordance
with the provisions thereof and hereof.
(c) If (i) the Company shall not have previously delivered to the
Trustee an Opinion of Counsel to the effect set forth in this
paragraph (c) with respect to the Medium-Term Debt Securities
authorized pursuant to the Board Resolution or Board Resolutions
referred to in paragraph (a) above or (ii) if the Medium-Term Debt
Securities Certificate referred to in paragraph (b) above specifies a
means of satisfaction and discharge other than the application of
Section 501 with respect to the series of Medium-Term Debt Securities
to which such Medium-Term Debt Securities Certificate relates, an
Opinion of Counsel that the Medium-Term Debt Securities have been duly
authorized by resolutions of the Board of Directors of the Company,
subject to the establishment of certain terms of the Medium-Term Debt
Securities and Coupons, if any, of the series by officers of the
Company authorized by such resolutions to establish such terms, that
when the terms of the Medium-Term Debt Securities and Coupons, if any,
of the series have been established as provided in such resolutions
and in this Indenture and the Medium-Term Debt Securities and Coupons,
if any, of the series have been executed, authenticated and delivered
in accordance with the provisions of this
<PAGE>
25
Indenture, the Medium-Term Debt Securities and Coupons, if any, of the
series, assuming they do not violate any applicable law then binding
on the Company, will constitute legal, valid and binding obligations
of the Company entitled to the benefits of this Indenture, equally and
ratably with all other Securities and Coupons, if any, of such series
theretofore issued and then outstanding hereunder, and that the amount
of Securities then outstanding under this Indenture, including the
Medium-Term Debt Securities of the series, will not exceed the amount
at the time permitted by law or this Indenture.
(d) If the Company shall not have delivered an Officers'
Certificate pursuant to the provisions of this paragraph (d) to the
Trustee during the immediately preceding 12-month period, an Officers'
Certificate stating that the Company is not in default under this
Indenture, that the issuance of the Medium-Term Debt Securities and
Coupons, if any, of the series will not result in any breach of any of
the terms, conditions or provisions of, or constitute a default under,
the Company's certificate of incorporation or By-laws or any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is a party or by which it is bound, or any order of
any court or administrative agency entered in any proceeding to which
the Company is a party or by which it may be bound or to which it may
be subject, that all laws and requirements with respect to the
execution and delivery by the Company of the Medium-Term Debt
Securities and Coupons, if any, of the series have been complied with
and that all conditions precedent provided in this Indenture relating
to the authentication and delivery of the Medium-Term Debt Securities
and Coupons, if any, of the series have been complied with.
(e) Such other documents as the Trustee shall reasonably
request.
SECTION 302. Form of Medium-Term Debt Securities. The Medium-Term Debt
Securities and Coupons, if any, of each series shall be in such forms as shall
be specified as contemplated by Section 301.
ARTICLE FOUR
The Securities
SECTION 401. Form and Denomination. All Securities of any one series
and the Coupons appertaining to any Bearer Securities of such series shall be
substantially identical except, in the case of Registered Securities, as to
denomination and except as may otherwise be provided in or pursuant to the Board
Resolution referred to in Section 202 or Section 301, as the case may be, and
(subject to Section 402) set forth in the Officers' Certificate or Medium-Term
Debt Securities Certificate referred to in Section 202 or Section 301, as the
case may be, or in any indenture supplemental hereto.
<PAGE>
26
The Securities of each series shall be issuable in such denominations
as shall be specified as contemplated by Section 202 or Section 301, as the case
may be. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series denominated in Dollars shall be
issuable in denominations of $1,000 and in any integral multiple thereof, if
registered, and in denominations of $5,000 if bearer. Securities of each series
shall be numbered, lettered or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Company executing the same may
determine with the approval of the Trustee. Each Security shall bear the
appropriate legends, if any, as required by U.S. Federal tax law and
regulations.
SECTION 402. Execution, Delivery, Dating and Authentication. The
Securities and any Coupons shall be executed on behalf of the Company by the
manual or facsimile signature of two Officers, under its corporate seal
reproduced thereon. In case any of the above referenced Officers of the Company
who shall have signed any of the Securities or Coupons shall cease to be such
Officer before the Securities so signed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Securities
nevertheless may be authenticated and delivered or disposed of as though the
person who signed such Securities and/or Coupons had not ceased to be such
Officer; and any Securities or Coupons may be signed on behalf of the Company by
such persons as, at the actual date of the execution of such Security or Coupon,
shall be such Officers of the Company, although at the date of the execution of
this Indenture any such person was not such Officer.
At any time and from time to time, the Company may deliver Securities
of any series, together with any Coupons appertaining thereto, executed by the
Company to the Trustee for authentication, together (except in the case of any
Medium-Term Debt Securities) with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order (or, in the case of Medium-Term Debt Securities of any series, upon
receipt of a Medium-Term Debt Securities Certificate and in accordance with the
terms thereof) shall authenticate and make available for delivery such
Securities; provided, however, that, unless otherwise specified in the Board
Resolution (or, in the case of any Bearer Securities that are Medium-Term Debt
Securities in the Medium-Term Debt Securities Certificate) with respect to any
Bearer Securities, in connection with its original issuance, no Bearer Security
(including any temporary Bearer Security issued pursuant to Section 403 which is
not in global form) shall be mailed or otherwise delivered to any location in
the United States; and provided further that, unless otherwise specified in the
Board Resolution (or, in the case of any Bearer Securities that are Medium-Term
Debt Securities, in the Medium-Term Debt Securities Certificate) with respect to
such Bearer Securities, such Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security (including any temporary Bearer Security issued pursuant to Section 403
which is not in global form) shall have furnished to the Company or any agent,
underwriter or selling group member a certificate substantially in the form set
forth in Exhibit B.1 to this Indenture, dated no earlier than 15 days prior to
the earlier of the date on which such Bearer Security is delivered and the date
on which any temporary Security first becomes exchangeable for such Bearer
Security in accordance with the terms of such temporary Security and this
Indenture. In connection with the original issuance of any Bearer Security and
unless otherwise specified in the Board Resolution
<PAGE>
27
(or, in the case of any Bearer Securities that are Medium-Term Debt Securities,
in the Medium-Term Debt Securities Certificate) with respect to such Bearer
Securities, a confirmation substantially in the form set forth in Exhibit B.5 to
this indenture shall be sent to each purchaser thereof. If any Security shall be
represented by a definitive global Bearer Security, then, for purposes of this
Section and Section 403, the notation of a beneficial owner's interest therein
upon original issuance of such Security or upon exchange of a portion of a
temporary global Security shall be deemed to be delivery in connection with its
original issuance of such beneficial owner's interest in such definitive global
Bearer Security. Except as permitted by Section 405, the Trustee shall not
authenticate and make available for delivery any Bearer Security unless all
appurtenant Coupons for interest then matured have been detached and canceled.
The Trustee shall not be required to authenticate Securities of any
series 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 is not reasonably acceptable to the
Trustee, or if the Trustee determines that such action may not lawfully be
taken.
Unless otherwise specified pursuant to Section 301(b)(1), each
Registered Security shall be dated the date of its authentication, and each
Bearer Security and any Bearer Security in global form shall be dated as of the
date of original issuance of the first Security of such series to be issued.
No Security or Coupon 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
below executed by the Trustee by manual signature, 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 duly 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 408
together with a written statement (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, 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.
The Trustee's certificate of authentication shall be in substantially
the following form:
Dated:
<PAGE>
28
This is one of the Securities of the series designated herein issued
under the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By
-----------------------------------
Authorized Signatory
SECTION 403. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order (or, in the case of Medium-Term Debt Securities, receipt of the
Medium-Term Debt Securities Certificate with respect to such Medium-Term Debt
Securities) the Trustee shall authenticate and 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, in
registered form or, if authorized, in bearer form with one or more Coupons or
without Coupons, and with such appropriate insertions, omissions, substitutions
and other variations as the Officers executing such Securities may determine, as
evidenced conclusively by their execution of such Securities. Such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), 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 maintained pursuant to Section 1102 in a Place of Payment for such
series for the purpose of exchanges of Securities of such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series (accompanied by any unmatured Coupons) the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a like aggregate principal amount of definitive Securities
of the same series and of like tenor and of authorized denominations; provided,
however, that, unless otherwise specified as contemplated by Section 202 or
Section 301, as the case may be, no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; provided further that
a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 402.
If temporary Bearer Securities of any series are issued in global
form, such temporary global Bearer Securities shall, unless otherwise specified
as contemplated by Section 202 or Section 301, as the case may be, be deposited
with a common depository in London for Morgan Guaranty Trust Company of New
York, Brussels Office (the "Common Depositary"), as
<PAGE>
29
operator of the Euro-clear System and CEDEL S.A., for credit to the respective
accounts of the beneficial owners of interests in such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date each such temporary global Security shall be surrendered by
the Common Depositary to the Trustee, as the Company's agent for such purpose,
to be exchanged, in whole or from time to time in part, for definitive
Securities without charge and the Trustee shall authenticate and make available
for delivery, in exchange for each portion of such temporary global Security, an
equal aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary
global Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in bearer form,
registered form, definitive global form or any combination thereof, as specified
as contemplated by Section 202 or Section 301, as the case may be, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, unless otherwise specified as contemplated by
Section 202 or Section 301, as the case may be, upon such presentation by the
Common Depositary, such temporary global Security shall be accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by
Euro-clear as to the portion of such temporary global Security held for its
account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL S.A. as to the portion of such temporary
global Security held for its account then to be exchanged, each in the form set
forth in Exhibit B.2 to this Indenture; provided further that definitive Bearer
Securities (including a definitive global Bearer Security) shall be delivered in
exchange for a portion of a temporary global Security only in compliance with
the requirements of Section 402.
Unless otherwise specified as contemplated by Section 202 or Section
301, as the case may be, the interest of a beneficial owner of Securities of a
series in a temporary global Bearer Security shall be exchanged for definitive
Bearer Securities of the same series and of like tenor following the Exchange
Date when the beneficial owner instructs Euro-clear or CEDEL S.A., as the case
may be, to request such exchange on his behalf and delivers to Euro-clear or
CEDEL S.A., as the case may be, a certificate substantially in the form set
forth in Exhibit B.1 to this Indenture, dated no earlier than 15 days prior to
the Exchange Date, copies of which certificate shall be available from the
offices of Euro-clear, CEDEL S.A., the Trustee, any Authenticating Agent
appointed for such series of Securities and any Paying Agent appointed for such
series of Securities. Unless otherwise specified as contemplated by Section 202
or Section 301, as the case may be, any such exchange shall be made free of
charge to the beneficial owners of such temporary global Security, except that a
Person receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Securities in person at the offices of Euro-clear or CEDEL
S.A. The definitive Bearer Securities to be delivered in exchange for any
portion of a temporary global Security shall be delivered to locations only
outside the United States.
<PAGE>
30
Until exchanged in full as provided above, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 202 or Section 301, as the case may be, interest
payable on any portion of a temporary global Bearer Security on an Interest
Payment Date for Securities of such series occurring prior to the applicable
Exchange Date shall be payable to each of Euro-clear and CEDEL S.A. on such
Interest Payment Date upon delivery by Euro-clear and CEDEL S.A. to the Trustee
of a certificate or certificates substantially in the form set forth in Exhibit
B.3 to this Indenture, for credit without further interest on or after such
Interest Payment Date to the respective accounts of the Persons who are the
beneficial owners of such temporary global Security (or to such other accounts
as they may direct) on such Interest Payment Date and who have each delivered to
Euro-clear or CEDEL S.A., as the case may be, a certificate substantially in the
form set forth in Exhibit B.4 to this Indenture. Any interest so received by
Euro-clear and CEDEL S.A. and not paid as herein provided shall be returned to
the Trustee immediately prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company in accordance with Section
1103.
SECTION 404. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at an office or agency to be maintained by the
Company in accordance with Section 1102 a register (being the combined register
of the Security Registrar and all additional transfer agents designated pursuant
to Section 1102 for the purpose of registration of transfer of Securities and
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 Registered Securities (other than U.S. Book-Entry
Securities) and the registration of transfers of Registered Securities. The
Chase Manhattan Bank is hereby appointed the initial Security Registrar. At all
reasonable times each register maintained by the Security Registrar and any
additional transfer agents shall be open for inspection by the Trustee.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained pursuant to
Section 1102 for such purpose in a Place of Payment for such series, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor.
At the option of the Holder, Registered Securities of any series may
be exchanged for other Registered 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 any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, the
Securities which the Holder making the exchange is entitled to receive. Unless
otherwise specified as contemplated by Section 202 or Section 301, as the case
may be, Bearer Securities may not be issued in exchange for Registered
Securities.
<PAGE>
31
At the option of the Holder and unless otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, Bearer
Securities of any series may be exchanged for Registered Securities of the same
series of any authorized denominations and of a like aggregate principal amount
and tenor, upon surrender of the Bearer Securities to be exchanged at any such
office or agency, with all unmatured Coupons and all matured Coupons in default
appertaining thereto. If the Holder of a Bearer Security is unable to produce
any such unmatured Coupon or Coupons or matured Coupon or Coupons in default,
such exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company in an amount equal to the face amount
of such missing Coupon or Coupons, or the surrender of such missing Coupon or
Coupons may be waived by the Company and the Trustee if there is furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to any Paying Agent any such missing Coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
1102, interest represented by Coupons shall be payable only upon presentation
and surrender of those Coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such Coupon when due in accordance
with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, any definitive
global Bearer Security shall be exchangeable only as provided in this paragraph.
If the beneficial owners of interests in a definitive global Bearer Security are
entitled to exchange such interests for Securities of such series and of like
tenor and principal amount of another authorized form and denomination, as
specified as contemplated by Section 202 or Section 301, as the case may be,
then without unnecessary delay but in any event not later than the earliest date
on which such interest may be so exchanged, the Company shall deliver to the
Trustee definitive Securities in an aggregate principal amount equal to the
principal amount of such definitive global Bearer Security, executed by the
Company. On or after the earliest date on which such interests may be so
exchanged, such definitive global Bearer Security shall be surrendered by the
Common Depositary or such other depositary or Common Depositary as shall be
specified in the Company Order or Medium-Term Debt Securities Certificate, as
the case may be, with respect thereto to the Trustee, as the
<PAGE>
32
Company's agent for such purpose, to be exchanged, in whole or from time to time
in part, for definitive Securities without charge and the Trustee shall
authenticate and make available for delivery, in exchange for each portion of
such definitive global Bearer Security, an equal aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such definitive global Bearer Security to be exchanged
which, unless the Securities of the series are not issuable both as Bearer
Securities and as Registered Securities, as specified as contemplated by Section
202 or Section 301, as the case may be, shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15
Business Days before any selection of Securities of that series to be redeemed
and ending on the relevant Redemption Date; provided further that no Bearer
Security delivered in exchange for a portion of a definitive global Security
shall be mailed or otherwise delivered to any location in the United States. If
a Registered Security is issued in exchange for any portion of a definitive
global Bearer Security after the close of business at the office or agency where
such exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, interest
or Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but will be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such definitive global Bearer Security is
payable in accordance with the provisions of this Indenture.
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 Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee or
any transfer agent) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar or
any transfer agent 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 403, 1006 or 1207 not involving any transfer.
In the event of any redemption in part of any series of Securities,
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 Business Days before any selection of Securities of that series to
be redeemed and ending at the close of business on (A) if Securities
<PAGE>
33
of the series are issuable only as Registered Securities, the day of the mailing
of the relevant notice of redemption and (B) if Securities of the series are
issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if Securities of the series are also issuable as
Registered Securities and there is no publication, the day of mailing of the
relevant notice of redemption, or (ii) to register the transfer of or exchange
any Registered Security so selected for redemption, in whole or in part, except
the unredeemed portion of any Security being redeemed in part, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and of
like tenor; provided that such Registered Security shall be simultaneously
surrendered for redemption.
SECTION 405. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or Security with a mutilated Coupon appertaining to it is
surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and 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 with Coupons corresponding to the Coupons, if
any, appertaining to the surrendered Security, provided that if such new
Security is a Bearer Security, such Security shall be delivered only outside the
United States.
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
or Coupon 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 or Coupon has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen Coupon appertains (upon surrender to the Trustee of
such Security with all appurtenant Coupons not destroyed, lost or stolen), a new
Security of the same series and of like tenor and principal amount and bearing a
number not contemporaneously outstanding, with Coupons corresponding to the
Coupons, if any, appearing to such destroyed, lost or stolen Security or to the
Security to which such destroyed, lost or stolen Coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security or Coupon, pay such Security
or Coupon; provided, however, that principal of (and premium, if any) and any
interest on Bearer Securities shall, except as otherwise provided in Section
1102, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 202 or Section 301,
as the case may be, any interest on Bearer Securities shall be payable only upon
presentation and surrender of the Coupons appertaining thereto.
Upon the issuance of any new Security or Coupon 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.
<PAGE>
34
Every new Security or Coupon of any series issued pursuant to this
Section in lieu of any mutilated, destroyed, lost or stolen Security or Coupon
shall constitute an original additional contractual obligation of the Company,
whether or not the mutilated, 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 or
Coupons 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 or Coupons.
SECTION 406. Payment of Interest; Interest Rights Preserved. Unless
otherwise provided as contemplated by Section 202 or Section 301, as the case
may be, with respect to any series of Securities, interest on any Registered
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 option of the Company,
interest on the Registered Securities of any series that bears interest may be
paid by mailing a check to the address of any Holder as such address shall
appear in the Security Register.
Any interest on any Registered 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
Registered 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 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,
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35
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 Registered 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 and Section 404,
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 407. Persons Deemed Owners. Prior to due presentment of a
Registered 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
Registered Security is registered as the owner of such Registered Security for
the purpose of receiving payment of principal of (and premium, if any) and
(subject to Sections 404, 406 and 411 and unless otherwise specified as
contemplated by Section 202 or Section 301, as the case may be) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any Coupons shall pass by delivery.
The Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder of any Bearer Security and the Holder of any Coupon as the absolute
owner of such Security or Coupon for the purpose of receiving payment thereof or
on account thereof (unless otherwise specified as contemplated by Section 202 or
Section 301, as the case may be) and for all other purposes whatsoever, whether
or not such Security or Coupon 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 408. Cancellation. All Securities and Coupons 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 and Coupons so delivered
shall be promptly canceled by the Trustee. All Bearer Securities and unmatured
Coupons held by the Trustee pending such cancellation shall be deemed to be
delivered for cancellation for all purposes of this Indenture and the
Securities. The
<PAGE>
36
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 to the Trustee 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 and Coupons held by the Trustee shall
be disposed of in a manner selected by the Trustee unless otherwise directed by
a Company Order; provided, however, that the Trustee may, but shall not be
required to, destroy such canceled Securities and Coupons.
SECTION 409. Computation of Interest. Except as otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, for Securities
of any series, interest on the Securities of each series shall bc computed on
the basis of a 360-day year of twelve 30-day months.
SECTION 410. Currency and Manner of Payment in Respect of Securities.
The provisions of this Section shall apply to the Securities of any series
unless otherwise provided as contemplated by Section 202 or Section 301, as the
case may be.
(a) The following payment provisions shall apply to
any Registered Security of any series denominated in a Foreign
Currency or any currency unit, including without limitation
ECU, except as provided in paragraph (b) below:
(1) Except as provided in subparagraph
(a)(2) or in paragraph (e) below, payment of
principal of and premium, if any, on such Registered
Security will be made at the Place of Payment by
delivery of a check in the currency or currency unit
in which the Security is denominated on the payment
date against surrender of such Registered Security,
and any interest on any Registered Security will be
paid at the Place of Payment by mailing a check in
the currency or currency unit in which such interest
is payable (which shall be the same as that in which
the Security is denominated unless otherwise
provided) to the Person entitled thereto at the
address of such Person appearing on the Security
Register.
(2) Payment of the principal of, premium, if
any, and interest, if any, on such Security may also,
subject to applicable laws and regulations, be made
at such other place or places as may be designated by
the Company by any appropriate method.
(b) With respect to any Registered Security of any
series denominated in any currency unit, including without
limitation ECU, if the following provisions (or any substitute
therefor, or addition thereto, not inconsistent with this
Indenture) are established pursuant to Section 202 or Section
301, as the case may be, and
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37
if the Company has not, before the delivery of the election
referred to in clause (1) below, deposited funds or securities
in compliance with Section 501, the following payment
provisions shall apply to any payment to be made prior to the
giving of any notice to Holders of any election to redeem
pursuant to Section 1204, except as otherwise provided in
paragraphs (e) and (f) below:
(1) A Holder of Securities of a series shall
have the option to elect to receive payments of
principal of, premium, if any, and interest, if any,
on such Securities in a currency or currency unit
(including Dollars), other than that in which the
Security is denominated, such election, as designated
in the certificates for such Securities (or as
provided by Section 202 or Section 301, as the case
may be, or a supplemental indenture hereto with
respect to uncertificated securities), shall be made
by delivering to the Paying Agent a written election,
to be in form and substance satisfactory to the
Paying Agent, not later than the close of business in
New York, New York, on the day 15 days prior to the
applicable payment date. Such election will remain in
effect for such Holder until changed by the Holder by
written notice to the Paying Agent (but any such
written notice must be received by the Paying Agent
not later than the close of business on the day 15
days prior to the next payment date to be effective
for the payment to be made on such payment date and
no such change may be made with respect to payments
to be made on any Security of such series with
respect to which notice of redemption has been given
by the Company pursuant to Article Twelve). Any
Holder of any such Security who shall not have
delivered any such election to the Paying Agent in
accordance with this paragraph (b) will be paid the
amount due on the applicable payment date in the
relevant currency unit as provided in paragraph (a)
of this Section. Payment of principal of and premium,
if any, shall be made on the payment date therefor
against surrender of such Security. Payment of
principal, premium, if any, and interest, if any,
shall be made at the Place of Payment by mailing at
such location a check, in the applicable currency or
currency unit, to the Holder entitled thereto at the
address of such Holder appearing on the Security
Register.
(2) Payment of the principal of, premium, if
any, and interest, if any, on such Security may also,
subject to applicable laws and regulations, be made
at such other place or places as may be designated by
the Company by any appropriate method.
(c) Payment of the principal of and premium, if any,
and interest, if any, on any Bearer Security will be made,
except as provided in Section 403 with respect to temporary
global Securities, unless otherwise specified pursuant to
Section 202 or Section 301, as the case may be, and/or Section
1001(8), at such place or places outside the United States as
may be designated from time to time by the Company pursuant to
any applicable laws or regulations by any appropriate
<PAGE>
38
method in the currency or currencies or currency unit or units
in which the Security is payable (except as provided in
paragraph (e) below) on the payment date therefor against
surrender of the Bearer Security, in the case of payment of
principal and premium, if any, or the relevant Coupon, in the
case of payment of interest, if any, to a Paying Agent
designated for such series pursuant to Section 1102.
(d) Not later than 10 Business Days (with respect to
any Place of Payment) prior to each payment date, the Paying
Agent shall deliver to the Company a copy of its record of the
respective aggregate amounts of principal of, premium, if any,
and interest, if any, on the Securities to be made on such
payment date, in the currency or currency unit in which each
of the Securities is payable, specifying the amounts so
payable in respect of Registered Securities and Bearer
Securities and in respect of the Registered Securities as to
which the Holders of Securities denominated in any currency
unit shall have elected to be paid in another currency or
currency unit as provided in paragraph (b) above. If the
election referred to in paragraph (b) above has been provided
for pursuant to Section 202 or Section 301, as the case may
be, and if at least one Holder has made such election, then,
not later than the fifth Business Day (with respect to any
Place of Payment) prior to the applicable payment date the
Company will deliver to the Trustee an Exchange Rate Officers'
Certificate in respect of the Dollar or Foreign Currency or
currency unit payments to be made on such payment date. The
Dollar or Foreign Currency or currency unit amount receivable
by Holders of Registered Securities denominated in a currency
unit who have elected payment in another currency or currency
unit as provided in paragraph (b) above shall be determined by
the Company on the basis of the applicable Official Currency
Unit Exchange Rate set forth in the applicable Exchange Rate
Officers' Certificate.
(e) If a Foreign Currency in which any Security is
denominated or payable ceases to be recognized both by the
government of the country which issued such currency and for
the settlement of transactions by public institutions of or
within the international banking community, or if ECU ceases
to be used within the European Monetary System, or if any
other currency unit in which a Security is denominated or
payable ceases to be used for the purposes for which it was
established, in each case as determined in good faith by the
Company, then with respect to each date for the payment of
principal of, premium, if any, and interest, if any, on the
applicable Security denominated or payable in such Foreign
Currency, ECU or such other currency unit occurring after the
last date on which such Foreign Currency, ECU or such other
currency unit was so used (the "Conversion Date"), the Dollar
shall become the currency of payment for use on each such
payment date (but ECU or the Foreign Currency or the currency
unit previously the currency of payment shall, at the
Company's election, resume being the currency of payment on
the first such payment date preceded by 15 Business Days
during which the circumstances which gave rise to the Dollar
becoming such currency no longer prevail, in each case as
determined in good faith by the
<PAGE>
39
Company). The Dollar amount to be paid by the Company to the
Trustee and by the Trustee or any Paying Agent to the Holder
of such Security with respect to such payment date shall be
the Dollar Equivalent of the Foreign Currency or, in the case
of a currency unit, the Dollar Equivalent of the Currency
Unit, as determined by the Exchange Rate Agent (which shall be
delivered in writing to the Trustee not later than the fifth
Business Day prior to the applicable payment date) as of the
Conversion Date or, if later, the date most recently preceding
the payment date in question on which such determination is
possible of performance, but not more than 15 days before such
payment date (such Conversion Date or date preceding a payment
date as aforesaid being called the "Valuation Date") in the
manner provided in paragraph (g) or (h) below.
(f) If the Holder of a Registered Security
denominated in a currency unit elects payment in a specified
Foreign Currency or currency unit as provided for by paragraph
(b) and such Foreign Currency ceases to be used both by the
government of the country which issued such currency and for
the payment of transactions by public institutions of or
within the international banking community, or if ECU ceases
to be used within the European Monetary System, or if another
currency unit ceases to be used for the purposes for which it
is established, in each case as determined in good faith by
the Company, such Holder shall (subject to paragraph (e)
above) receive payment in the currency unit in which the
Security is denominated. Each payment covered by an election
pursuant to paragraph (b) above shall be governed by the
provisions of this paragraph (f) (but, subject to any
contravening valid election pursuant to paragraph (b) above,
the specified Foreign Currency or ECU or other currency unit
shall, at the Company's election, being the currency or
currency unit, as applicable, of payment with respect to
Holders who have so elected, but only with respect to payments
on payment dates preceded by 15 Business Days during which the
circumstances which gave rise to such currency unit becoming
the currency unit of payment, no longer prevail, in each case
as determined in good faith by the Company).
(g) The "Dollar Equivalent of the Foreign Currency"
shall be determined by the Exchange Rate Agent as of each
Valuation Date and shall be obtained by converting the
specified Foreign Currency into Dollars at the Market Exchange
Rate on the Valuation Date.
(h) The "Dollar Equivalent of the Currency Unit"
shall be determined by the Exchange Rate Agent as of each
Valuation Date and shall be the sum obtained by adding
together the results obtained by converting the Specified
Amount of each Component Currency into Dollars at the Market
Exchange Rate on the Valuation Date for such Component
Currency.
(i) For purposes of this Section 410 the
following terms shall have the following meanings:
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40
A "Component Currency" shall mean any
currency which, on the Conversion Date, was a
component currency of the relevant currency unit,
including without limitation ECU.
A "Specified Amount" of a Component Currency
shall mean the number of units (including decimals)
which such Component Currency represented in the
relevant currency unit, on the Conversion Date or, if
ECU and such currency unit is being used for
settlement of transactions by public institutions of
or within the European Communities or was so used
after the Conversion Date, the Valuation Date or the
last date the currency unit was so used, whichever is
later. If after such date the official unit of any
Component Currency is altered by way of combination
or subdivision, the Specified Amount of such
Component Currency shall be divided or multiplied in
the same proportion. If after such date two or more
Component Currencies are consolidated into a single
currency, the respective Specified Amounts of such
Component Currencies shall be replaced by an amount
in such single currency equal to the sum of the
respective Specified Amounts of such consolidated
Component Currencies expressed in such single
currency, and such amount shall thereafter be a
Specified Amount and such single currency shall
thereafter be a Component Currency. If after such
date any Component Currency shall be divided into two
or more currencies, the Specified Amount of such
Component Currency shall be replaced by specified
amounts of such two or more currencies, the sum of
which, at the Market Exchange Rate of such two or
more currencies on the date of such replacement,
shall be equal to the Specified Amount of such former
Component Currency and such amounts shall thereafter
be Specified Amounts and such currencies shall
thereafter be Component Currencies.
"Market Exchange Rate" shall mean, as of any
date, for any currency or currency unit the noon
Dollar buying rate for that currency or currency
unit, as the case may be, for cable transfers quoted
in New York City on such date as certified for
customs purposes by the Federal Reserve Bank of New
York or such other rate as may be established
pursuant to Section 202 or Section 301, as the case
may be. If such rates are not available for any
reason with respect to one or more currencies or
currency units for which an Exchange Rate is
required, the Exchange Rate Agent shall use, in its
sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New
York as of the most recent available date, or
quotations from one or more major banks in New York
City or in the country of issue of the currency or
currency unit in question, or such other quotations
as the Exchange Rate Agent shall deem appropriate.
Unless otherwise specified by the Exchange Rate
Agent, if there is more than one market for dealing
in any currency or currency unit by reason of foreign
exchange regulations or otherwise, the market to be
<PAGE>
41
used in respect of such currency or currency unit
shall be that upon which a nonresident issuer of
securities designated in such currency or currency
unit would, as determined in its sole discretion and
without liability on the part of the Exchange Rate
Agent, purchase such currency or currency unit in
order to make payments in respect of such securities.
All decisions and determinations of the
Exchange Rate Agent regarding the Dollar Equivalent
of the Foreign Currency, the Dollar Equivalent of the
Currency Unit and the Market Exchange Rate shall be
in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and
irrevocably binding upon the Company and all Holders
of the Securities and Coupons denominated or payable
in the relevant currency or currency units. In the
event that a Foreign Currency ceases to be used both
by the government of the country which issued such
currency and for the settlement of transactions by
public institutions of or within the international
banking community, the Company, after learning
thereof, will immediately give notice thereof to the
Trustee (and the Trustee will promptly thereafter
give notice in the manner provided in Section 106 to
the Holders) specifying the Conversion Date. In the
event the ECU ceases to be used within the European
Monetary System, or any other currency unit in which
Securities or Coupons are denominated or payable,
ceases to be used for the purposes for which it was
established, the Company, after learning thereof,
will immediately give notice thereof to the Trustee
(and the Trustee will promptly thereafter give notice
in the manner provided in Section 106 to the Holders)
specifying the Conversion Date. Any actions taken
pursuant to the parentheticals at the end of the
first sentence of Section 410(e) and at the end of
Section 410(f) shall be promptly set forth in like
notices from the Company to the Trustee and then from
the Trustee to the Holders (which notices may be
mailed with payment to the Holders).
Subject to the provisions of Sections 701 and 702, the Trustee shall
be fully justified and protected in relying and acting upon information received
by it from the Company and the Exchange Rate Agent, and shall not otherwise have
any duty or obligation to determine such information independently.
SECTION 411. Securities in Global Form. If Securities of a series are
issuable in global form, as specified as contemplated by Section 202 or Section
301, as the case may be, then, notwithstanding clause (a)(8) of Section 202 and
clause (a)(8) of Section 202 as it applies to Section 301 and the provisions of
Section 401, such global Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced or increased to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount, of Outstanding Securities
<PAGE>
42
represented thereby shall be made by the Trustee in such manner and upon
instructions given by such Person or Persons as shall be specified therein or in
the Company Order (or, in the case of Medium-Term Debt Securities, the
Medium-Term Debt Securities Certificate) to be delivered to the Trustee pursuant
to Section 402 or Section 403. Subject to the provisions of Section 402 and, if
applicable, Section 403, the Trustee shall deliver and redeliver any Security in
definitive global bearer form in the manner and upon written instructions given
by the Person or Persons specified therein or in the applicable Company Order
(or, in the case of Medium-Term Debt Securities, the Medium-Term Debt Securities
Certificate). If a Company Order (or, in the case of Medium-Term Debt
Securities, Medium-Term Debt Securities Certificate) pursuant to Section 402 or
403 has been, or simultaneously is, delivered, any instructions by the Company
with respect to endorsement or delivery or redelivery of a Security in global
form shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of the fifth paragraph of Section
402 shall apply to any Security represented by a Security in global form if such
Security was never issued and sold by the Company and the Company delivers to
the Trustee the Security in global form together with written instructions
(which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel) with regard to the reduction in the principal amount of
Securities represented thereby, together with the written statement contemplated
by the last sentence of the fifth paragraph of Section 402.
Notwithstanding the provisions of Section 406, unless otherwise
specified as contemplated by Section 202 or Section 301, as the case may be,
payment of principal of and any premium and any interest on any Security in
definitive global form shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 407 and except as provided
in the preceding paragraph, if so specified as contemplated by Section 202 or
Section 301, as the case may be, with respect to the Securities of any series,
the Company, and any agent of the Company may, and the Trustee and any agent of
the Trustee, at the direction of the Company, may treat a Person having a
beneficial interest in a definitive global Security as the Holder of such
principal amount of Outstanding Securities of such Series represented by such
definitive global Security as shall be specified in a written statement of the
Holder of such definitive global Security or, in the case of a definitive global
Security in bearer form, of Euro-clear or CEDEL S.A. which is produced to the
Trustee by such Person; provided, however, that none of the Company, the
Trustee, the Security Registrar or any Paying Agent shall have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Security in
global form or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
SECTION 412. Registered Global Notes. (a) If the Company shall
establish pursuant to Section 202 or Section 301, as the case may be, that the
Registered Securities of a series are to be issued in whole or in part in the
form of one or more global Securities (Registered Securities in the form of
global Securities being herein called "Registered Global Notes"), then the
Company shall execute and the Trustee shall, in accordance with Section 202
<PAGE>
43
or Section 301, as the case may be, and the Company Order or the Medium-Term
Debt Securities Certificate, as the case may be, with respect to such series,
authenticate and deliver one or more Registered Global Notes in temporary or
permanent 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 one or more Registered Global Notes, (ii) shall be
registered in the name of the U.S. Depositary for such Registered Global Note or
Notes or the nominee of such depositary, and (iii) shall bear a legend
substantially to the following effect:
"THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY
THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY, UNLESS AND UNTIL THIS SECURITY IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM."
Notwithstanding any other provision of this Section 412 or Section 404, unless
and until it is exchanged in whole or in part for Registered Securities in
definitive form, a Registered Global Note representing all or a portion of the
Registered Securities of a series may not be transferred except as a whole by
the U.S. Depositary for such series to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor U.S.
Depositary for such series or a nominee of such successor depositary.
(b) If at any time the U.S. Depositary for the Securities of a series
notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Securities of such series or if at any time the U.S.
Depositary for Securities of a series shall no longer be a clearing agency
registered and in good standing under the Exchange Act, or other applicable
statute or regulation, the Company shall appoint a successor U.S. Depositary
with respect to the Securities of such series. If a successor U.S. Depositary
for the Securities of such series is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such condition, the
Company will execute, and the Trustee, upon receipt of a Company Order or a
Medium-Term Debt Securities Certificate, as the case may be, for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver Registered Securities of such series in definitive form
in an aggregate principal amount equal to the principal amount of the Registered
Global Note or Notes representing such series in exchange for such Registered
Global Note or Notes.
(c) The Company may at any time and in its sole discretion determine
that the Registered Securities of any series issued in the form of one or more
Registered Global Notes shall no longer be represented by such Registered Global
Note or Notes. In such event, the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Registered Securities
of such series in definitive form and in an aggregate principal amount equal to
the principal amount of the Registered Global Note or Notes representing such
series in exchange for such Registered Global Note or Notes.
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44
(d) If the Registered Securities of any series shall have been issued
in the form of one or more Registered Global Notes and if an Event of Default
with respect to the Securities of such series shall have occurred and be
continuing, the Company will promptly execute, and the Trustee, upon receipt of
a Company Order for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver, Registered Securities of such series
in definitive form and in an aggregate principal amount equal to the principal
amount of the Registered Global Note or Notes representing such series in
exchange for such Registered Global Note or Notes.
(e) If specified by the Company pursuant to Section 202 or Section
301, as the case may be, with respect to Registered Securities of a series, the
U.S. Depositary for such series of Registered Securities may surrender a
Registered Global Note for such series of Securities in exchange in whole or in
part for Registered Securities of such series in definitive form on such terms
as are acceptable to the Company and such depositary. Thereupon, the Company
shall execute and the Trustee shall authenticate and deliver, without charge:
(i) to each Person specified by the U.S. Depositary a new
Registered Security or Securities of the same series, of any authorized
denomination as requested by such Person in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Registered Global Note; and
(ii) to the U.S. Depositary a new Registered Global Note in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Registered Global Note and the aggregate
principal amount of Registered Securities delivered to Holders thereof.
(f) Upon the exchange of a Registered Global Note for
Registered Securities in definitive form, such Registered Global Note shall be
cancelled by the Trustee. Securities issued in exchange for a Registered Global
Note pursuant to this Section 412 shall be registered in such names and in such
authorized denominations as the U.S. Depositary for such Registered Global Note,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Securities to the
Persons in whose names such Securities are so registered.
ARTICLE FIVE
Satisfaction and Discharge
SECTION 501. Termination of Company's Obligations. The Company
may terminate with respect to a series of Securities all of its obligations
under the Securities and this Indenture if all Securities and Coupons, if any,
of such series previously authenticated and delivered (other than destroyed,
lost or stolen Securities and Coupons which have been replaced or paid) have
been delivered to the Trustee for cancellation or if:
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45
(a) (i) all such Securities and Coupons of such series not
previously delivered to the Trustee for cancellation mature within one
year or all of them are to be called for redemption within one year
under arrangements satisfactory to the Trustee for giving notice of
redemption; or (ii) the Holders of the Securities and Coupons of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of the Company's exercise of its option under this
Section 501 and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been
the case if such option had not been exercised;
(b) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations (as defined in Section 505) or, in
the case of Securities and Coupons, if any, denominated in a Foreign
Currency, Foreign Government Securities (as defined in Section 505)
sufficient to pay principal of, premium, if any, and interest on the
Securities of such series to maturity or redemption, as the case may
be, and the Company pays or makes arrangements satisfactory to the
Trustee for the payment of all other amounts due to the Trustee; and
(c) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent to the discharge of the Company's obligations have been
satisfied.
After such deliveries or a deposit, the Trustee, at the request and
expense of the Company, will execute proper instruments acknowledging the
Discharge of the Company's obligations under the Securities (and Coupons, if
any) and this Indenture with respect to such series except for those surviving
obligations specified in the definition of "Discharged" in Section 505.
In order to have money available on a payment date to pay principal
(including any premium) and interest, if any, under the Securities and Coupons,
if any, of such series, the U.S. Government Obligations or Foreign Government
Securities, as the case may be, shall be payable as to principal or interest on
or before such payment date in such amounts as will provide the necessary money.
U.S. Government Obligations and Foreign Government Securities shall not be
callable at the issuer's option. The Trustee shall receive a certificate of
either an independent accountant, the Company's Chief Financial Officer or
another financial advisor chosen by the Company to insure the accuracy of the
above.
SECTION 502. Application of Trust Money. The Trustee shall hold in
trust money, U.S. Government Obligations or Foreign Government Securities, as
the case may be, deposited with it pursuant to clause (b) of Section 501. It
shall apply the deposited money and the money from U.S. Government Obligations
or Foreign Government Securities, as the case may be, through the Paying Agent
and in accordance with this Indenture to the payment of principal of and
interest on the Securities of the series and redemption price, if applicable.
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46
SECTION 503. Repayment to Company. The Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money or securities
held by them at any time. The Trustee and the Paying Agent shall pay to the
Company upon request any money held by them for the payment of principal or
interest that remains unclaimed for two years. After payment to the Company,
Security holders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person, and all liability of the Trustee or the Paying Agent with respect to
such trust money shall thereupon cease.
SECTION 504. Reinstatement. If the Trustee is unable to apply any
money, U.S. Government Obligations or Foreign Government Securities in
accordance with Section 501 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Securities and Coupons, if any, of such series
shall bc revived and reinstated as though no deposit had occurred pursuant to
Section 501 until such time as the Trustee is permitted to apply all such money,
U.S. Government Obligations or Foreign Government Securities in accordance with
Section 501; provided, however, that if the Company has made any payment of
interest on or principal of (and premium, if any) on any Securities and Coupons,
if any, of such series because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such series of
Securities and Coupons, if any, to receive such payment from the money, U.S.
Government Obligations or Foreign Government Securities held by the Trustee.
SECTION 505. Definitions. The following terms, as used in this
Article, shall have the following meanings:
"Discharged" means that the Company will be deemed to
have paid and discharged the entire indebtedness represented
by, and obligations under, the Securities and Coupons, if any,
of the series as to which this Section is specified as
applicable as aforesaid and to have satisfied all the
obligations under this Indenture relating to the Securities
and Coupons, if any, of such series (and the Trustee, at the
request and expense of the Company, will execute proper
instruments acknowledging the same), except (A) the rights of
Holders thereof to receive, from the trust fund described in
Section 501(b), payment of the principal of (and premium, if
any) and the interest, if any, on such Securities and Coupons,
if any, when such payments are due, (B) the Company's
obligations with respect to such Securities and Coupons, if
any, under Sections 404 and 405 (insofar as applicable to
Securities of such series), 502, 1102 and 1103 (last paragraph
only) and the Company's obligations to the Trustee under
Section 707, (C) the rights of Holders of Securities of any
series with respect to the currency or currency units in which
they are to receive payments of principal, premium, if any,
and interest, if any, and (D) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, will survive
such discharge. The Company will reimburse the trust fund for
any loss suffered by it as a result of any tax, fee or other
charge imposed on or against deposited U.S. Government
Obligations or Foreign Government
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47
Securities, as the case may be, or any principal or interest
paid on such obligations, and, subject to the provisions of
Section 707, will indemnify the Trustee against any claims
made against the Trustee in connection with any such loss.
"Foreign Government Securities" means, with respect
to Securities and Coupons, if any, of any series that are
denominated in a Foreign Currency, securities that are (i)
direct obligations of the government that issued or caused to
be issued such currency for the payment of which obligations
its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of such government the timely payment of which
is unconditionally guaranteed as a full faith and credit
obligation by such government, which, in either case under
clause (i) or (ii), are not callable or redeemable at the
option of the issuer thereof.
"U.S. Government Obligations" means: (i) direct
obligations of the United States for the payment of which its
full faith and credit is pledged or (ii) obligations of a
person controlled or supervised by and acting as an agency or
instrumentality of the United States, the payment of which is
unconditionally guaranteed as a full faith and credit
obligation by the United States.
ARTICLE SIX
Remedies
SECTION 601. Events of Default. "Event of Default" with respect to any
series of Securities means each one of the events specified below in this
Section 601, unless it is either inapplicable to a particular series or is
specifically deleted or modified in or pursuant to the supplemental indenture,
Board Resolution or Medium-Term Debt Securities Certificate establishing such
series of Securities:
(1) default in the payment of any installment of
interest upon any of the Securities of such series, as and
when the same shall become 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 of the Securities of such series, as
and when the same shall become due and payable (subject to
clause (3) below) either at maturity, upon redemption, by
declaration or otherwise; or
(3) default in the making of any payment for a
sinking, purchase or analogous fund provided for in respect of
such series of Securities, as and when the same shall become
due and payable, and continuance of such default for a period
of 30 days; or
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48
(4) failure on the part of the Company duly to
observe or perform any other of the covenants or agreements on
the part of the Company in the Securities of such series, this
Indenture or any supplemental indenture applicable to such
series, for a period of 60 days after the date on which
written notice of such failure requiring the Company to remedy
the same and stating that such notice is a "Notice of Default"
hereunder, shall have been given, by registered or certified
mail, to the Company by the Trustee, or to the Company and the
Trustee by the holders of at least 25% in aggregate principal
amount of the Securities of such series at the time
Outstanding; or
(5) default by the Company or any Subsidiary of the
Company in the payment of the principal of or interest on any
mortgage, agreement or other instrument under which there may
be outstanding, or by which there may be secured or evidenced,
any indebtedness for money borrowed (other than Non- Recourse
Debt of a Non-Recourse Subsidiary) in excess of $20,000,000 in
the aggregate of the Company and any Subsidiary of the
Company, whether such indebtedness now exists or shall
hereafter be created resulting in such indebtedness becoming
or being declared due and payable, and such acceleration shall
not have been rescinded or annulled within 10 days after
written notice of such acceleration has been received by the
Company or such Subsidiary; or
(6) entry in a court of competent jurisdiction of a
final judgment for the payment of $20,000,000 or more rendered
against the Company or any Subsidiary of the Company and such
judgment is not fully covered by insurance or not discharged
or stayed within 90 days after (i) the date on which the right
to appeal thereof has expired if no such appeal is commenced,
or (ii) the date on which all rights to appeal have expired or
been extinguished; or
(7) commencement by the Company of a voluntary case
under any applicable Federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent by
the Company to the entry of an order for relief against it in
an involuntary case, or consent by the Company to the
appointment of a Custodian of the Company for all or
substantially all of its property, or any general assignment
by the Company for the benefit of its creditors; or
(8) entry by a court of competent jurisdiction of an
order or decree under any applicable Federal or state
bankruptcy, insolvency or other similar law now or hereafter
in effect that is for relief against the Company in an
involuntary case, or appoints a Custodian of the Company for
all or substantially all of the Company's property, or orders
the liquidation of the Company, and in each case such order or
decree remains unstayed and in effect for 90 days; or
(9) any other Event of Default provided with respect
to Securities of that series.
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49
No Event of Default with respect to a single series of indebtedness
issued under this Indenture necessarily constitutes an Event of Default with
respect to any other series of indebtedness issued hereunder.
SECTION 602. Acceleration. If an Event of Default with respect to the
Securities of any series at the time Outstanding occurs and is continuing on a
series, the Trustee by written notice to the Company, or the Holders of at least
25% in aggregate principal amount of the Outstanding Securities of that series
or in the case of an Event of Default specified in Clause (5) or (6) of Section
601, of all series (voting as a class) with respect to which such Event of
Default has occurred and is continuing by written notice to the Company and the
Trustee, may declare to be due and payable immediately (i) 100% of the principal
amount (or, if the Securities of that Series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of the Securities of the series and (ii) interest on the
Securities of the series accrued to the date of acceleration. Upon such
declaration, such amount of principal and interest shall be due and payable
immediately. The Holders of a majority in principal amount of the series by
notice to the Company may rescind an acceleration and its consequences if all
existing Events of Default on the series (except nonpayment of principal that
has become due solely because of the acceleration) have been cured or waived and
if the rescission would not conflict with any judgment or decree.
SECTION 603. Other Remedies. If an Event of Default occurs and is
continuing on a series, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect, subject to Section 602, the payment
of principal of or interest on the Securities of the series or to enforce the
performance of any provision of the Securities or this Indenture applicable to
the series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All remedies are cumulative.
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50
SECTION 604. Waiver of Existing Defaults. Subject to Section 1002, and
unless a Board Resolution or Supplemental Indenture otherwise provides, the
Holders of a majority in principal amount of a series by notice to the Trustee
may consent to the waiver of a past or existing default or Event of Default on
the series and its consequences. When a default or Event of Default is waived,
it is cured. No such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon.
SECTION 605. Control by Majority. The Holders of a majority in
principal amount of a series may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it under this Indenture with respect to the series. The
Trustee, however, subject to Section 703, may refuse to follow any direction
that conflicts with law or this Indenture, that is unduly prejudicial to the
rights of another Holder of a Security, or that would involve the Trustee in
personal liability. The Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction. The Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the Holders, pursuant to
the provisions of this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee against all
costs, expenses and liabilities that may be incurred therein or thereby.
SECTION 606. Limitation on Suits. A Holder of a series may not pursue
any remedy with respect to this Indenture or the Securities of the series
unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default on the series;
(2) the Holders of at least 25% in principal amount of the series or,
in the case of an Event of Default specified in Clause (5) or (6) of
Section 601, of all series (voting as a class) with respect to which such
Event of Default has occurred and is continuing make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity,
satisfactory to the Trustee, against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period, the Holders of a majority in principal
amount of the series or, in the case of an Event of Default specified in
Clause (5) or (6) of Section 601, of all series (voting as a class) with
respect to which such Event of Default has occurred and is continuing do
not give the Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
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51
SECTION 607. Rights of Holders To Receive Payments. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal (and premium, if any) of and (subject to Section
406) interest on the Security or any Coupon, on or after the respective due
dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder.
SECTION 608. Collection Suit by Trustee. If an Event of Default in
payment of interest or principal specified in Section 601 (1) or (2) occurs and
is continuing on a series, the Trustee, subject to Section 602, may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid on the series.
SECTION 609. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company and its creditors or property.
Nothing herein shall be deemed to authorize the Trustee to authorize or consent
to or accept on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
SECTION 610. Priorities. If the Trustee collects any money, securities
or other property for a series pursuant to this Article, it shall pay out the
money in the following order:
FIRST: to the Trustee for all amounts due it under Section 707;
SECOND: to Holders of the series for amounts due and unpaid on the
Securities for principal (and premium, if any) and interest, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities and Coupons, if any, for principal and
interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders.
SECTION 611. 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 or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorney's fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 607 or a suit by Holders of more
than 10% in principal amount of the Outstanding Securities of the series.
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52
SECTION 612. 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 613. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever muted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SEVEN
The Trustee
SECTION 701. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing on Securities of any series, the Trustee shall
exercise its rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default on Securities
of any series:
(1) The Trustee shall not be liable except for the performance of such
duties as are specifically set out in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. The
Trustee, however, shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
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53
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 605.
(d) 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.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section.
(f) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(g) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company.
SECTION 702. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel or require an Officers' Certificate and/or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care, provided
that the Company's rights or remedies against any agent shall not be
compromised.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers.
(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 Holder pursuant to this Indenture, unless such Holder 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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54
SECTION 703. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate thereof with the same
rights it would have if it were not Trustee. Any Agent may do the same with like
rights. The Trustee, however, must comply with Sections 710 and 711.
SECTION 704. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities of any series
and it shall not be responsible for any statement in the Securities of any
series other than its certificate of authentication.
SECTION 705. Notice of Defaults. If a default occurs and is continuing
on Securities of any series and if it is actually known to the Trustee or the
Trustee has received written notice thereof, the Trustee shall transmit to each
Holder of Securities of such series notice as provided in Section 106 of the
default within 90 days after it occurs. Except in the case of a default in
payment of principal of (or premium, if any, on) or interest on any Security of
a series or in the payment of any sinking fund installment with respect to
Securities of a series, the Trustee may withhold the notice if and so long as
the board of directors of the Trustee, the executive or any trust committee of
such board and/or responsible officers of the Trustee in good faith determine(s)
that withholding the notice is in the interest of the Securityholders of the
series; provided, further, that in the case of any default of the character
specified in Section 601(4) with respect to Securities of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence of
such default.
SECTION 706. Reports by Trustee to Holders. Within 60 days after each
December 15 beginning with December 15, 1996, the Trustee shall mail to each
Holder a brief report dated as of December 15 that complies with Section 313(a)
of the Trust Indenture Act. The Trustee also shall comply with Section 313(b) of
the Trust Indenture Act.
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange, if any, on which the Securities are
listed.
SECTION 707. Compensation and Indemnity. The Company shall pay the
Trustee from time to time such compensation for its services as is separately
agreed upon by the Company and the Trustee. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses, disbursements
and advances incurred by it. Such expenses shall include, but shall not be
limited to, the reasonable compensation, expenses and disbursements of the
Trustee's agents and counsel. The Company shall indemnify the Trustee against
any loss or liability or expenses arising out of or incurred by it in connection
with the administration of this trust and its duties hereunder. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
The Company need not reimburse any expenses or indemnify against any loss or
liability incurred by the Trustee as a result of its negligence or willful
misconduct.
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55
The indemnities contained in this Section 707 shall survive the
termination of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 601(7) or (8) occurs, the expenses and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 708. Replacement of Trustee. (a) The Trustee may resign upon
30 days notice to the Company. The Holders of a majority in principal amount of
the Outstanding Securities of any series may remove the Trustee with respect to
such series of Securities upon 30 days notice to the removed Trustee and may
appoint a successor Trustee with the Company's consent. The Company may remove
the Trustee if:
(1) the Trustee fails to comply with Section 710;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately thereafter,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, the resignation or removal of the retiring Trustee shall
become effective and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder of the series of Securities for which
such successor Trustee will act.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of such outstanding series of
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 710, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(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
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56
and which (1) shall contain such provisions as shill 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 retiring
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.
SECTION 709. Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets to, another corporation, the successor
corporation without any further act shall be the successor Trustee.
SECTION 710. Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of Section 310(a)(1) of the
Trust Indenture Act. The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with Section 310(b) of the Trust Indenture
Act. To the extent permitted by the Trust Indenture Act, the Trustee shall not
be deemed to have a conflicting interest with respect to the Securities of any
particular series of Securities other than that series.
SECTION 711. Preferential Collection of Claims Against Company. The
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
SECTION 712. Judgment Currency. If, for the purpose of obtaining a
judgment in any court with respect to any obligation of the Company hereunder or
under any Security or Coupon, it shall become necessary to convert into any
other currency or currency unit any amount in the currency or currency unit due
hereunder or under such Security or Coupon, then such conversion shall be made
at the Conversion Rate (as defined below) as in effect on the date
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57
the Company shall make payment to any Person in satisfaction of such judgment.
If pursuant to any such judgment, conversion shall be made on a date other than
the date payment is made and there shall occur a change between such Conversion
Rate and the Conversion Rate as in effect on the date of payment or
distribution, the Company agrees to pay such additional amounts (if any) as may
be necessary to ensure that the amount paid is the amount in such other currency
or currency unit which, when converted at the Conversion Rate as in effect on
the date of payment or distribution, is the amount then due hereunder or under
such Security or Coupon. Any amount due from the Company under this Section 712
shall be due as a separate debt and is not to be affected by or merged into any
judgment being obtained for any other sums due hereunder or in respect of any
Security or Coupon so that in any event the Company's obligations hereunder or
under such Security or Coupon will be effectively maintained as obligations in
such currency or currency unit. In no event, however, shall the Company be
required to pay more in the currency or currency unit stated to be due hereunder
or under such Security or Coupon.
For purposes of this Section 712, "Conversion Rate" shall mean, as of
any date, for any currency or currency unit into which an amount due hereunder
or under any Security or Coupon is to be converted, the noon buying rate in the
other currency or currency unit for that currency or currency unit for cable
transfers quoted in New York City on such date as certified for customs purposes
by the Federal Reserve Bank of New York. If such rates are not available for any
reason with respect to one or more currencies or currency units for which a
Conversion Date is required, the Exchange Rate Agent shall use, in its sole
discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York as of the most recant available date, or quotations
from one or more major banks in New York City or in the country of issue of the
currency in question, or such other quotations as the Exchange Rate Agent shall
deem appropriate. Unless otherwise specified by the Exchange Rate Agent, if
there is more than one market for dealing in a currency or currency unit by
reason of foreign exchange regulations or otherwise, the market to be used in
respect of such currency or currency unit shall be that upon which a nonresident
issuer of securities designated in such currency or currency unit would, as
determined in its sole discretion and without liability on the part of the
Exchange Rate Agent, purchase such currency or currency unit in order to make
payments in respect of such securities. If there does not exist a quoted
exchange rate in any currency or currency unit (the "First Currency") for
another currency unit (the "Second Currency"), then the Conversion Rate for the
Second Currency shall be equal to an equivalent amount in the First Currency
obtained by converting the Specified Amount of each Component Currency of the
Second Currency into the First Currency at the Conversion Rate (determined as
provided above) for each such Component Currency on such date (or, if the First
Currency is a currency unit for which there is no quoted exchange rate in any
Component Currency, by converting the Specified Amount of each Component
Currency of the Second Currency into the Specified Amount of each Component
Currency of the First Currency at the Conversion Rate (determined as provided
above) for each such Component Currency on such date).
SECTION 713. Appointment of Authenticating Agent. The Company 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 or upon
exchange, registration of transfer or partial redemption thereof or
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pursuant to Section 405, 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 Trustee and shall at all times be a corporation having a
combined capital and surplus of not less than the equivalent of $50,000,000 and
subject to supervision or examination by Federal, state or District of Columbia
authority or the equivalent foreign authority, in the case of an Authenticating
Agent who is not organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia. 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 the corporate agency or
corporate trust business of such 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 such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Company may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Trustee. 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 Company may appoint a successor Authenticating
Agent which shall be acceptable to the Trustee and shall mail, or cause to be
mailed, written notice of such appointment by first-class mail, postage prepaid,
to all Holders of Registered Securities, if any, 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 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 herein issued
under the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By
As Authenticating Agent
By
Authorized [Officer] [Signatory]
If all the Securities of a series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment or other place
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Company shall appoint in accordance with this Section an
Authenticating Agent (which may be an Affiliate of the Company if eligible to be
appointed as an Authenticating Agent hereunder) having an office in such Place
of Payment or other place designated by the Company with respect to such series
of Securities.
ARTICLE EIGHT
Holders' Lists and Reports by Trustee and Company
SECTION 801. Communication by Holders with Other Holders. Holders may
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Holders with respect to their rights under this Indenture. The Company, the
Trustee, the Registrar and anyone else shall have the protection of Section
312(c) of the Trust Indenture Act.
SECTION 802. Reports by Trustee. The Trustee shall report to the
Holders with as set out in Section 706 of this Indenture.
SECTION 803. Reports by Company. The Company shall file with the
Trustee and the Commission, and transmit to Holders, such information, documents
and reports, and such summaries thereof and copies of portions 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 Exchange Act shall be filed with the Trustee within 15 days after the
same shall be so required to be filed with the Commission.
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ARTICLE NINE
Consolidation, Merger, Conveyance or Transfer
SECTION 901. Company May Consolidate, etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other corporation or convey
or transfer its properties and assets substantially as an entirety to any
Person, unless:
(1) the corporation formed by such consolidation or
into which the Company is merged or the Person which acquires
by conveyance or transfer the properties and assets of the
Company substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of
America or any state or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee in form satisfactory to
the Trustee, the due and punctual payment of the principal of,
and premium, if any, and interest, if any, on all the
Securities and the performance or observance 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 or transfer and
such supplemental indenture comply with this Article and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 902. Successor Corporation Substituted. Upon any consolidation
or merger, or any conveyance or transfer of the properties and assets of the
Company substantially as an entirety in accordance with Section 901, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and shall be subject to the obligations and restrictions
hereunder with the same effect as if such successor corporation had been named
as the Company herein all without any further act or deed on the part of such
successor corporation being required; and in the event of any such conveyance or
transfer, the Company (which term shall for this purpose mean the Person named
as the "Company" in the first paragraph of this instrument or any successor
corporation which shall have theretofore become such in the manner prescribed in
Section 901) shall be discharged from all liability under this Indenture and in
respect of the Securities and may be dissolved and liquidated.
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61
ARTICLE TEN
Supplemental Indentures
SECTION 1001. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or pursuant
to 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 corporation
to the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities;
(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;
(3) to add any additional Events of Default with
respect to all or any series of the Securities (and, if such
Event of Default is applicable to less than all series of
Securities, specifying the series to which such Event of
Default is applicable);
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest
coupons; to change or eliminate any restrictions on the
payment of principal of or any premium or interest on Bearer
Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities (if permitted by applicable
laws and regulations), to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized
denominations; provided that any such addition or change shall
not adversely affect the interests of the Holders of
Securities of any series or any related Coupons in any
material respect;
(5) to change or eliminate any of the provisions of
this Indenture; provided that any such change or elimination
shall become effective only when there is no Security
Outstanding of any series created prior to the execution of
such supplemental indenture which is adversely affected by
such change in or elimination of such provision;
(6) to establish the form or terms of Securities of
any series as permitted by Sections 202 and 301;
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(7) 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 708(b);
(8) if allowed under applicable laws and regulations,
to permit payment in the United States of principal, premium
or interest on Bearer Securities or Coupons, if any;
(9) to provide for the issuance of uncertificated
Securities of one or more series in addition to or in place
of certificated Securities;
(10) to cure any ambiguity or to correct or
supplement any provision herein which may be defective or
inconsistent with any other provision herein; or
(11) to make any other provisions with respect to
matters or questions arising under this Indenture; provided
such other provisions as may be made shall not adversely
affect the interests of the Holders of outstanding Securities
of any series in any material respect.
SECTION 1002. 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 all series affected by such supplemental indenture
(acting as one class), by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by or pursuant to 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 without the consent of the Holder
of each outstanding Security effected 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 602, or change any Place of Payment where, or the
currency, currencies or currency unit or units in which, any
Security or any premium or the 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
affect adversely the terms, if any, of conversion of any
Security into stock or other securities of the Company or of
any other corporation,
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(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,
(3) change any obligation of the Company, with
respect to Outstanding Securities of a series, to maintain an
office or agency in the places and for the purposes specified
in Section 1102 for such series, or
(4) modify any of the provisions of this Section,
Section 604 or Section 1107, except to increase any such
percentage or to provide with respect to the Securities of any
particular series the right to condition the effectiveness of
any supplemental indenture as to that series on the consent of
the Holders of a specified percentage of the aggregate
principal amount of Outstanding Securities of such series
(which provision may be made pursuant to Section 202 or
Section 301, as the case may be, without the consent of any
Holder) 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 1107, or the deletion of this
proviso, in accordance with the requirements of Section 708(b)
and 1001(7).
For purposes of this Section 1002, if the Securities of any series are
issuable upon the exercise of warrants, each holder of an unexercised and
unexpired warrant with respect to such series shall be deemed to be a Holder of
Outstanding Securities of such series in the amount issuable upon the exercise
of such warrant. For such purposes, the ownership of any such warrant shall be
determined by the Company in a manner consistent with customary commercial
practices. The Trustee for such series shall be entitled to rely on an Officers'
Certificate as to the principal amount of Securities of such series in respect
of which consents shall have been executed by holders of such warrants.
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 1003. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article
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or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive (in addition to the opinion which the
Trustee is entitled to receive pursuant to Section 202), and (subject to Section
701) 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,
immunities or liabilities under this Indenture or otherwise.
SECTION 1004. 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 1005. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 1006. 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 ELEVEN
Covenants
SECTION 1101. Payment of Principal, Premium and Interest. The Company
covenants and agrees for the benefit of each series of Securities and Coupons,
if any, that it will duly and punctually pay the principal of (and premium, if
any, on) and interest, if any, on the Securities and Coupons, if any, of that
series in accordance with the terms of the Securities and Coupons, if any, of
such series and this Indenture.
SECTION 1102. Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Company will maintain in
each Place of Payment for such series 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. If Securities of a series are
issuable as both Registered or Bearer Securities or only as Bearer Securities,
the Company will maintain (A) in
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65
the Borough of Manhattan, The City of New York, an office or agency where any
Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related Coupons may be presented or surrendered
for payment in the circumstances described in the proviso contained in the last
sentence of this first paragraph of Section 1102 (and not otherwise), (B)
subject to any laws or regulations applicable thereto, in a Place of Payment for
that series which is located outside the United States, an office or agency
where Securities of that series and related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Securities of that series pursuant to Section 1108); provided, however, that if
the Securities of that series are listed on any stock exchange located outside
the United States and such stock exchange shall so require, the Company will
maintain a Paying Agent for the Securities of that series in any required city
located outside the United States, so long as the Securities of that series are
listed on such exchange, and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United
States, an office or agency where any Registered Securities of that series may
be surrendered for registration of transfer, where Securities of that series may
be surrendered for 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 Company will give prompt written notice to the Trustee and the Holders of
the location, and any change in the location, of any such office or agency. If
at any time the Company shall fail to maintain any such required office or
agency in respect of any series of Securities or shall fall to furnish the
Trustee with the address thereof, such presentations and surrenders of
Securities of that series may be made and notices and demands may be made or
served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Bearer Securities of that series pursuant to Section 1108) at the London office
of the Trustee (or an agent with a London office appointed by the Trustee and
acceptable to the Company), and the Company hereby appoints the same as its
agent to receive such respective presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Securities shall be made
at any office or agency of the Company in the United States or by check mailed
to any address in the United States or by transfer to an account maintained with
a bank located in the United States; provided, however, that, if the Securities
of a series are denominated and payable in Dollars, payment of principal of and
premium, if any, and interest, if any, on any Bearer Security (including any
additional amounts payable on Securities of such series pursuant to Section
1108) shall be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment in Dollars of the
full amount of such principal, premium, interest or additional amounts, as the
case may be, at all offices or agencies outside the United States maintained for
the purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
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
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no such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in accordance with the requirements
set forth above for Securities of any series for such purposes. The Company will
give prompt written notice to the Trustee and the Holders of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1103. 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, on) or interest, if any, on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the relevant currency (or a sufficient number of currency
units, as the case may be) sufficient to pay the principal (and premium, if any,
on) 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, at or prior to the opening of business on each
due date of the principal of (and premium, if any, on) or interest, if any, 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, on) or interest, if any, 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, on) or interest, if any, 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
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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 then held
by the Company, in trust for the payment of the principal of (and premium, if
any, on) or interest, if any, on any Security or Coupon of any series that
remains unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be repaid to the Company, or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Security and Coupons, if any, shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, 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 and at the direction 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 Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified herein, 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. All moneys payable to the Company by the Trustee
or any Paying Agent as provided in the preceding sentence shall be paid to the
Company on May 31 of each year.
SECTION 1104. Restrictions on Secured Debt. The Company will not
itself, and will not permit any Restricted Subsidiary to, incur, issue, assume,
or guarantee any Debt, whether or not evidenced by negotiable instruments or
securities, secured after the date hereof by Mortgage on any Principal Property
of the Company or any Restricted Subsidiary or any shares of Capital Stock of or
Debt of any Restricted Subsidiary, without effectively providing that all the
Securities Outstanding (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 any of the Securities) shall be
secured equally and ratably with (or, at the option of the Company, prior to)
such secured Debt, so long as such secured Debt shall be so secured, unless,
after giving effect thereto, the aggregate amount of all such secured Debt of
the Company and its Restricted Subsidiaries (excluding any Debt secured by
Mortgages permitted to be incurred by clauses (a) through (k) below) would not
exceed the Applicable Percentage of Consolidated Net Assets; provided, however,
that this Section shall not apply to, and there shall be excluded from secured
Debt in any computation under this Section, Debt secured by:
(a) any Mortgage if an amount of cash equal to the
net proceeds of the Debt secured by such Mortgage is used
within 12 months of the creation, incurrence or assumption of
such Mortgage to (i) acquire additional property or assets (or
to make investments in persons who, after giving effect to
such investments, will become Subsidiaries of the Company),
(ii) retire debt which is pari passu with the Securities
(provided that in connection with any such retirement, any
related loan commitment or the like shall be reduced in an
amount equal to the principal amount so retired) or (iii) make
an offer to purchase the
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Securities at 100% of the principal amount thereof, plus
accrued interest, if any, to the date of purchase;
(b) Existing Mortgages;
(c) Mortgages on property or assets of any person
existing at the time such person becomes a Restricted
Subsidiary or merges into or consolidates with the Company or
a Restricted Subsidiary;
(d) Mortgages on property or assets or shares of
stock or Debt existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary;
(e) Mortgages on property or assets or shares of
stock or Debt to secure the financing of the acquisition,
construction, alteration or improvement of property or assets
of the Company or any Restricted Subsidiary of the Company (or
of persons who, after giving effect to such financing, will
become Restricted Subsidiaries), provided that such Mortgages
are created not later than 18 months after such acquisition
or, in the case of construction, alteration or improvement of
property or assets, the later of the completion thereof or the
commencement of the commercial operation of such property or
assets;
(f) Mortgages in favor of the Company or any
Restricted Subsidiary;
(g) Mortgages in favor of or required by federal,
state or local governmental authorities or political
subdivisions thereof, including any department or
instrumentality thereof, and any other Mortgages incurred or
assumed in connection with the issuance of any industrial
revenue or similar bonds;
(h) Mortgages on property or assets of, or on any
shares of stock or other equity interest in, a Foreign
Subsidiary to secure Debt of a Foreign Subsidiary, or a
Non-Recourse Subsidiary to secure Non-Recourse Debt;
(i) Mortgages to secure Debt of joint ventures in
which the Company or a Subsidiary of the Company has an
interest, to the extent such Mortgages are on property or
assets of or equity interests in such joint ventures;
(j) Mortgages on current assets to secure Debt
incurred for working capital purposes, provided that such Debt
matures no later than 18 months from the date of incurrence;
(k) Mortgages securing judgments or appeal bonds
with respect to amounts being contested in good faith; and
<PAGE>
69
(l) any extension, renewal or replacement, as a whole
or in part, of any Mortgage referred to in the foregoing
clauses (a) to (k), provided, however, that (i) such
extension, renewal or replacement Mortgage shall be limited to
all or a part of the same property or assets that secured the
Mortgage being extended, renewed or replaced and (ii) the
principal amount (or, if such Debt provides for an amount less
than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount) of
the Debt secured by such extended, renewed or replaced
Mortgage does not exceed the principal amount (or, if such
Debt provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of
acceleration or maturity thereof, such lesser amount) of Debt
which was secured by the Mortgage being extended, renewed or
replaced (plus the premiums and reasonable expenses incurred
in connection therewith).
SECTION 1105. Restrictions on Sale and Leaseback Transactions. The
Company will not itself, and will not permit any Restricted Subsidiary to, enter
into any transaction after the date hereof with any Person, providing for the
leasing by the Company or a Restricted Subsidiary of any Principal Property
which has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person (herein referred to as a "Sale and Leaseback
Transaction") unless:
(a) the Company or such Restricted Subsidiary would, at the time
of entering into the Sale and Leaseback Transaction, be entitled to
incur Debt secured by a Mortgage on the Principal Property to be
leased in an amount at least equal to the Attributable Debt in respect
of such transaction without equally and ratably securing the
Securities pursuant to Section 1104; or
(b) the proceeds of the sale of the Principal Property to be
leased are at least equal to the fair value of such Principal Property
(the amount of such proceeds, if other than in cash, to be determined
by the chief financial or accounting officer of the Company, whose
determination shall be conclusive) and an amount in cash equal to the
net proceeds are applied, within 12 months of the effective date of
such transaction, to (i) acquire additional assets (or to make
investments in entities which, after giving effect to such investment,
will become Restricted Subsidiaries), (ii) retire Debt which is pari
passu with the Securities (provided that in connection with any such
retirement, any related loan commitment or the like shall be reduced
in an amount equal to the principal amount so retired) or (iii) offer
to purchase the Securities at 100% of the principal amount thereof,
plus accrued interest, if any, to the date of purchase; or
(c) the lease in such Sale and Leaseback Transaction is for a
period, including renewal rights, of not in excess of 36 months; or
(d) the lease in such Sale and Leaseback Transaction is a lease
of Principal Property entered into within 18 months from the
acquisition of such
<PAGE>
70
Principal Property or the transaction by which the person owning such
Principal Property became a Restricted Subsidiary, or in the case of
the construction, alteration or improvement of Principal Property, the
later of the completion of the construction, alteration or improvement
of such Principal Property or the commencement of commercial operation
of the Principal Property; or
(e) such Sale and Leaseback Transaction is entered into between
the Company and a Restricted Subsidiary or between Restricted
Subsidiaries.
SECTION 1106. Limitation on Affiliate Transactions. Neither the
Company nor any of its Subsidiaries shall sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into any contract, agreement, understanding, loan, advance
or guaranty with, or for the benefit of, an Affiliate of the Company (other than
a Subsidiary) (an "Affiliate Transaction") having a value, or for consideration
having a value, in excess of $20,000,000 individually or in the aggregate unless
the Board of Directors of the Company shall determine that the terms of such
Affiliate Transaction are no less favorable to the Company or such Subsidiary
than those which might be obtained at the time of such Affiliate Transaction
from persons who are not Affiliates. The restrictions of this Section 1106 are
not applicable to the payment of reasonable and customary fees to directors of
the Company who are not employees, the payment of compensation to officers of
the Company or any transaction between or among any of the Company and its
Subsidiaries.
SECTION 1107. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
written certificate signed by the principal executive officer, the principal
financial officer or the principal accounting officer of the Company, stating
that:
(1) a review of the activities of the Company during
such year and of performance under this Indenture has been
made under such officer's supervision; and
(2) to such officer's knowledge, based on such
review, the Company has fulfilled all its obligations, and has
complied with all conditions and covenants, under this
Indenture throughout such year, or, if there has been a
default in the fulfillment of any such obligation, condition
or covenant, specifying each such default known to him and the
nature and status thereof. For purposes of this Section 1106,
compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms
of this Indenture.
SECTION 1108. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Section 1104 or Section 1105 if before the time for such compliance the Holders
of not less than a majority in principal amount of the Outstanding Securities of
all series affected thereby shall, by Act of such Holders (acting as one class),
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no such waiver shall extend to or affect
<PAGE>
71
such term, provision 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 term, provision or Condition shall
remain in full force and effect.
SECTION 1109. Additional Amounts. If the Securities of a series
provide for the payment of additional amounts, the Company will pay to the
Holder of any Security of such series or any related Coupon additional amounts
as provided therein. Whenever in this Indenture there is mentioned, in any
context, the payment of the principal of or any premium or interest on, or in
respect of, any Security of any series or payment of any related Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of additional
amounts provided for in this Section to the extent that, in such context,
additional amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section and express mention of the payment of additional
amounts (if applicable) in any provisions hereof shall not be construed as
excluding additional amounts in those provisions hereof where such express
mention is not made.
If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's Paying Agent or Paying
Agents, if other than the Trustee, with an Officers' Certificate instructing the
Trustee and such Paying Agent or Paying Agents whether such payment of principal
of and any premium or interest on the Securities of that series shall be made to
Holders of Securities of that series or any related Coupons who are United
States Aliens (as defined in such Securities) without withholding for or on
account of any tax, assessment or other governmental charge described in the
Securities of that series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such Payments to such Holders of Securities or Coupons and the
Company will pay to the Trustee or such Paying Agent the additional amounts
required by this Section. The Company covenants to indemnify the Trustee and any
Paying Agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section.
ARTICLE TWELVE
Redemption of Securities
SECTION 1201. Applicability of Article. Securities of any series which
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
202 or Section 301, as the case may be, for Securities of any series) in
accordance with this Article.
<PAGE>
72
SECTION 1202. Election To Redeem; Notice to Trustee. If the Company
shall desire to exercise the right to redeem all, or, as the case may be, any
part 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 and of
the principal amount of Securities of such series to be redeemed. In the case of
any redemption of Securities prior to the expiration of any restriction on such
redemption provided 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.
SECTION 1203. Selection by Trustee of Securities To Be Redeemed. If
less than all the Securities of any series are to be redeemed, 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
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple of $1,000 in excess thereof, except as otherwise
specified as contemplated by Section 202 or Section 301, as the case may be) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.
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.
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 1204. Notice of Redemption. Notice of redemption shall be
given not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, as provided in Section 106.
Each such notice of redemption shall specify the Redemption Date, the
Redemption Price, the Place or Places of Payment, that the Securities of such
series are being redeemed at the option of the Company pursuant to provisions
contained in the terms of the Securities of such series or in a supplemental
indenture establishing such series, if such be the case, together with a brief
statement of the facts permitting such redemption, that on the Redemption Date,
the Redemption Price will become due and payable upon each Security redeemed,
that payment will be made upon presentation and surrender of the applicable
Securities, that all Coupons, if any, maturing subsequent to the date fixed for
redemption shall be void, that any interest accrued to the Redemption Date will
be paid as specified in said notice, that the redemption is pursuant to the
sinking fund, if such is the case, and that on and after said Redemption Date
any interest thereon or on the portions thereof to be redeemed will cease to
accrue. If less than all the Securities of any series are to be redeemed, the
notice of redemption shall specify the registration
<PAGE>
73
and, if any, CUSIP numbers of the Securities of such series to be redeemed, and,
if only Bearer Securities of any series are to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities, the last date on which
exchanges of Bearer Securities for Registered Securities not subject to
redemption may be made. In case any Security, of any series, is to be redeemed
in part only, the notice of redemption shall state the portion of the principal
amount thereof to be redeemed and shall state that on and after the Redemption
Date, upon surrender of such Security and any Coupons appertaining thereto, a
new Security or Securities of such series in principal amount equal to the
unredeemed portion thereof and with appropriate Coupons will be issued, or, in
the case of Registered Securities providing appropriate space for such notation,
at the option of the Holders, the Trustee, in lieu of delivering a new Security
or Securities as aforesaid, may make a notation on such Security of the payment
of the redeemed portion thereof.
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.
SECTION 1205. Deposit of Redemption Price. On or before the opening of
business on any 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 1103) an amount of money in
the relevant currency (or a sufficient number of currency units, as the case may
be) 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
which are to be redeemed on that date.
SECTION 1206. 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 and the Coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except
otherwise provided in Section 1102) and, unless otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, only upon
presentation and surrender of Coupons for such interest; provided further that,
unless otherwise specified as contemplated by Section 202 or Section 301, as the
case may be, installments of interest on Registered Securities 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 406.
<PAGE>
74
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing Coupons, or the surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing Coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by Coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1102) and, unless otherwise specified as contemplated by Section 202 or
Section 301, as the case may be, only upon presentation and surrender of those
Coupons.
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 1207. 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 make available
for delivery to the Holder of such Security without service charge, a new
Security or Securities (with appropriate Coupons) of the same series and Stated
Maturity, 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 or, in the case of Registered
Securities providing appropriate space for such notation, at the option of the
Holder, the Trustee, in lieu of delivering a new Security or Securities as
aforesaid, may make a notation on such Security of the payment of the redeemed
portion thereof.
ARTICLE THIRTEEN
Sinking Funds
SECTION 1301. 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 202 or Section
301, as the case may be, 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
<PAGE>
75
reduction as provided in Section 1302. 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 1302. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities (including all unmatured
Coupons appertaining thereto) 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 the
outstanding principal amount thereof 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 1303. Redemption of Securities for Sinking Fund. Not less than
60 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 1302 and
will also deliver to the Trustee any Securities (including all unmatured Coupons
appertaining thereto) 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 1203 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 1204. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1206 and 1207.
IN WITNESS THEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
MANOR CARE, INC.,
By
Name:
Title:
THE CHASE MANHATTAN BANK, as Trustee,
By
Name:
Title:
<PAGE>
76
COMMONWEALTH OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of ________, 1996, before me personally came, to me
known, who, being by me duly sworn, did depose and say that he is a, of MANOR
CARE, INC., one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation; and that he signed his
name thereto by like authority.
Notary Public
Name:
Notary Public, Commonwealth of
Massachusetts
No.:
Qualified in:
Commission Expires:
[ ] )
) ss.:
COUNTY OF [ ] )
On the ____ day of 1996, before me personally came, to me known, who,
being by me duly sworn, did depose and say that he is a, of [NAME OF TRUSTEE],
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by like authority.
Notary Public
Name:
Notary Public,
No.:
Qualified in:
Commission Expires:
<PAGE>
Exhibit A
(Form of Fixed Rate
Security with and without Optional
Redemption Provision)
(Form of Face of [Note] 1)
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]2
No.:
MANOR CARE, INC.
% [Note] Due
No.: CUSIP No.:
$
MANOR CARE, INC., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company", which term includes
any successor corporation under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to______________ or
registered assigns, the principal sum of _____________ Dollars, at the office or
agency of the Company in the Borough of Manhattan, The City and State of New
York, ___________________, in such coin on or currency of the United States of
America as at the time of payment shall be legal tender for the payments of
public and private debts, and to pay interest, semi-annually on ______________
and _____________ of each year, on said principal sum at said office or agency,
in like coin or currency, at the rate of ________% per annum, from the
____________ or the _____________, as the case may be, next preceding the date
of this [Note] to which interest has been paid, unless the date hereof is a date
to which interest has been paid, in which case from the date of this [Note], or
unless no interest has been paid on the [Notes] due (as defined on the reverse
hereof), in which case from ______________ until payment of said principal sum
has been made or duly provided for. Notwithstanding the
- --------
1 Bracketed references to "Note" or "Notes" should be changed to reflect the
designation of the series of Securities being issued.
2 The bracketed language is to be included if the Securities are included
within DTC's book-entry system.
<PAGE>
2
foregoing, if the date hereof is after _______________ or _____________ as the
case may be, and before the following _____________ or ____________, this [Note]
shall bear interest from such ________________ or ______________, provided,
however, that if the Company shall default in the payment of interest due on
such _____________ or _____________, then this [Note] shall bear interest from
the next preceding ______________ or _______________ to which interest has been
paid, or, if no interest has been paid on the [Notes] due _________, from
______________. The interest so payable on any ______________ or ______________
will subject to certain exceptions provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this [Note] is registered at
the close of business on such________________ or _______________, as the case
may be, next preceding such _______________ or _______________, unless the
Company shall default in the payment of interest due on such interest payment
date, in which case such defaulted interest, at the option of the Company, may
be paid to the person in whose name this [Note] is registered at the close of
business on a special record date for the payment of such defaulted interest
established by notice to the registered holders of [Notes] not less than 10 days
preceding such special record date or may be paid in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
[Notes] due may be listed. Payment of interest may, at the option of the
Company, be made by check mailed to the registered address of the person
entitled thereto.
Reference is made to the further provisions of thus [Note] set forth
on the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
This [Note] shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof.
<PAGE>
3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: MANOR CARE, INC.
by
-------------------------
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of the Series
designated herein issued under the
within-mentioned Indenture.
by
--------------------------
[NAME OF TRUSTEE], as Trustee
by
----------------------------
Authorized Signatory
<PAGE>
4
(Form of Reverse of [Note])
This [Note] is one of a duly authorized issue of unsecured debentures,
notes or other evidences of indebtedness of the Company (hereinafter called the
"Securities), of the series hereinafter specified, all issued or to be issued
under an indenture dated as of November [ ], 1996 (hereinafter called the
"Indenture"), as trustee (hereinafter called the "Trustee"), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
description of the relative rights and duties thereunder of the Trustee, the
Company and the holders of the Securities. The Securities may be issued in one
or more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest at different
rates, may be subject to different redemption provisions, may be subject to
different sinking, purchase or analogous funds, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This [Note] is one of a series designated as the ______% [Notes] due
of the Company (hereinafter called the "[Notes] due _______") issued under the
Indenture, limited in aggregate principal amount to $___________.
In case an Event of Default with respect to the [Notes] due
_______________, as defined in the Indenture, shall have occurred and be
continuing, the principal hereof together with interest accrued thereon, if any,
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding of all
series to be affected (acting as one class) to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the holders of the Securities of such series to be
affected; provided, however, that no such supplemental indenture shall, among
other things, (1) change the fixed maturity of the principal of, or any
installment of principal of or interest on, any Security; (ii) reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof; (iii) impair the right to institute suit for the
enforcement of any such payment on or after the fixed maturity thereof (or, in
the case of redemption, on or after the redemption date); (iv) 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 the Indenture or certain defaults thereunder and their
consequences) provided for in the Indenture; (v) change any obligation of the
Company, with respect to outstanding Securities of a series, to maintain an
office or agency in the places and for the purposes specified in the Indenture
for such series; or (vi) modify any of the foregoing provisions or the
provisions for the waiver of certain covenants and defaults, except to increase
any applicable percentage of the aggregate principal amount of outstanding
Securities the consent of the holders of which is required or to provide with
respect to any particular series the right to condition the effectiveness of any
supplemental indenture as to that series on the consent of the holders of a
specified percentage of the aggregate principal amount of outstanding Securities
of such series or to provide that certain other provisions of the
<PAGE>
5
Indenture cannot be modified or waived without the consent of the holder of each
outstanding Security affected thereby. It is also provided in the Indenture that
the holders of a majority in aggregate principal amount of the Securities of a
series at the time outstanding may on behalf of the holders of all the
Securities of such series waive any past default under the Indenture with
respect to such series and its consequences, except a default in the payment of
the principal of, premium, if any, or interest, if any, on any Security of such
series or in respect of a covenant or provision which cannot be modified without
the consent of the Holder of each outstanding Security of the series affected.
Any such consent or waiver by the holder of this [Note] shall be conclusive and
binding upon such holder and upon all future holders and owners of the [Note]
and any [Notes] due _______________ which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof is
made upon this [Note] or such other [Notes] due ____________.
No reference herein to the Indenture and no provision of this [Note]
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this [Note] at the place, at the respective times, at the rate and
in the coin or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations with
respect to the [Notes] due _______________ on the 91st day following the
satisfaction of the conditions set forth in the Indenture, which include the
deposit with the Trustee of money or U.S. Government Obligations or a
combination thereof sufficient to pay and discharge each installment of
principal of (including premium, if any, on) and interest, if any, on the
outstanding [Notes] due ___________.
If the Company shall, in accordance with Section 901 of the Indenture,
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, the successor
shall succeed to, and be substituted for, the Person named as the "Company" on
the face of this [Note], all on the terms set forth in the Indenture.
The [Notes] due _______________ are issuable in registered form
without coupons in denominations of $1,000 or any integral multiple thereof. In
the manner and subject to the limitations provided in the Indenture, but without
the payment of any service charge, [Notes] due _______________ may be exchanged
for an equal aggregate principal amount of [Notes] due _______________ of other
authorized denominations at the office or agency of the Company maintained for
such purpose in the Borough of Manhattan, the City and State of New York.
[The [Notes] due _______________ may be redeemed as a whole, or from
time to time in part, at the option of the Company at any time upon mailing a
notice of such redemption not less than 30 nor more than 60 days prior to the
date fixed for redemption to the holders of the [Notes] due _______________ at
their last registered addresses, all as provided in the Indenture, at the
following optional redemption prices (expressed in percentages of the principal
amount), together in each case with accrued interest to the date fixed for
redemption.
<PAGE>
6
If redeemed during the twelve-month period beginning
Year Percentage
]3
Upon due presentment for registration of transfer of this [Note] at
the office or agency of the Company for such registration in the Borough of
Manhattan, the City and State of New York, a new [Note] or [Notes] of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
Prior to due presentment for registration of transfer of this [Note],
the Company, the Trustee and any agent of the Company or the Trustee may deem
and treat the registered holder hereof as the absolute owner of this [Note]
(whether or not this [Note] shall be overdue) for the purpose of receiving
payment of the principal of, premium, if any, and interest on this Note, as
herein provided, and for all other purposes, and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, effectively
satisfy and discharge liability for moneys payable on this [Note].
No recourse for the payment of the principal of, premium, if any, or
interest on this [Note], or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
[Note], or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of any
payment 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.
Unless otherwise defined in this [Note], all terms used in this [Note]
which are defined in the Indenture shall have the meanings assigned to them in
the Indenture.
THIS [NOTE] SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
- --------
3 Bracketed language to be included in Securities redeemable at the option of
the Company.
<PAGE>
EXHIBIT B
[FORMS OF CERTIFICATION]
EXHIBIT B.1
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY]
CERTIFICATE
MANOR CARE, INC.
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that the above-captioned Securities are not being
acquired by or on behalf of a United States person, or for offer to resell or
for resale to a United States person or any person inside the United States, or,
if a beneficial interest in the Securities is being acquired by a United States
person, that such United States person is a financial institution as defined in
Section 1.165-12(c)(1)(v) of the United States Treasury Regulations, or is
acquiring through a financial institution, and that the Securities are held by a
financial institution that has agreed to comply with the requirements of Section
1650(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder and that it is not purchasing for offer to resell or
for resale inside the United States.
As used herein, "United States person" means any citizen or resident
of the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States, or any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source, and "United States" means the United States of America (including
the states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all such Securities.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
<PAGE>
2
Dated: ___________, 19__
[To be dated on or after
____________, 19__ (the date
determined as provided in the Indenture)]
[Name of Person Entitled to Receive Bearer
Security]
-------------------------------------------
(Authorized Signatory)
Name:
Title:
<PAGE>
EXHIBIT B.2
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A.
IN CONNECTION WITH THE EXCHANGE OF A PORTION OF A
TEMPORARY GLOBAL SECURITY]
CERTIFICATE
MANOR CARE, INC.
[Insert title or sufficient description
of Securities to be delivered]
This is to certify with respect to $_________ principal amount of the
above-captioned Securities (i) that we have received from each of the persons
appearing in our records as persons entitled to a portion of such principal
amount (our "Qualified Account Holders") a certificate with respect to such
portion substantially in the form attached hereto and (ii) that we are not
submitting herewith for exchange any portion of the temporary global Security
representing the above-captioned Securities excepted in such certificates.
We further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any portion of
the part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
Date:
[To be dated no earlier
than the Exchange Date]
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE, as
Operator of the Euro-clear System]
[CEDEL S.A.]
By
--------------------------------
<PAGE>
EXHIBIT B.3
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL S.A. TO OBTAIN
INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
MANOR CARE, INC.
[Insert title or sufficient
description of Securities]
We confirm that the interest payable on the Interest Payment Date on
[Insert Date] will be paid to each of the persons appearing in our records as
being entitled to interest payable on such date from whom we have received a
written certification, dated not earlier than such Interest Payment Date,
substantially in the form attached hereto. We undertake to retain certificates
received from our member organizations in connection herewith for four years
from the end of the calendar year in which such certificates are received.
We undertake that any interest received by us and not paid as provided
above shall be returned to the Trustee for the above Securities immediately
prior to the expiration of two years after such Interest Payment Date in order
to be repaid by such Trustee to the above issuer at the end of two years after
such Interest Payment Date.
Date: ____________, 19__
[To be dated on or after the
relevant Interest Payment Date]
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, BRUSSELS OFFICE, as Operator
of the Euro-clear System]
[CEDEL S.A.]
By
------------------------------------
<PAGE>
EXHIBIT B.4
[FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE)
CERTIFICATE
MANOR CARE, INC.
[Insert title or sufficient
description of Securities]
This is to certify that as of the Interest Payment Date on [Insert
Date] and except as provided in the third paragraph hereof, the above-captioned
Securities held by you for our account are not beneficially owned by a United
States person, and have not been acquired by or on behalf of a United States
person, or for offer to resell or for resale to a United States person or any
person inside the United States, or, if any of such Securities held by you for
our account are beneficially owned by a United States person, (i) such United
States person is a financial institution within the meaning of Section
1.165-12(c)(1)(v) of the United States Treasury Regulations purchasing for its
own account or has acquired such Securities through a financial institution and
(ii) such Securities are held by a financial institution that has agreed to
comply with the requirements of Section 1650(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder and
that it did not purchase for offer to resell or for resale inside the United
States.
As used herein, "United States person" means any citizen or resident
of the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source, and "United States" means the United States of America (including
the states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
This certificate excepts and does not relate to U.S. $__________
principal amount of the above-captioned Securities appearing in your books as
being held for our account as to which we are not yet able to certify and as to
which we understand interest cannot be credited unless and until we are able to
so certify.
<PAGE>
2
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Date: ___________, 19__
[To be dated on or after
the 15th day before the
relevant Interest Payment Date]
[Name of Person Entitled to Receive Interest]
--------------------------------------------
(Authorized Signature)
Name:
Title:
<PAGE>
EXHIBIT B.5
[FORM OF CONFIRMATION TO BE SENT TO
PURCHASERS OF BEARER SECURITIES]
By your purchase of the securities referred to in the accompanying
confirmation (the "Securities"):
You represent that you are not a United States person or, if you are a
United States person, you are a financial institution as that term is defined in
Section 1.165-12(c)(1)(v) of the United States Treasury Regulations, or are
acquiring through a financial institution, and that the Securities will be held
by a financial institution that agrees to comply with the requirements of
Section 1650(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of
1986, as amended, and the regulations thereunder and are not purchasing the
Securities on behalf of any United States person other than such a financial
institution or for offer to resell or for resale inside the United States.
If you are a dealer, (a) you also represent that you have not offered,
sold or delivered, and agree that you will not offer, sell, resell or deliver,
any of such Securities, directly or indirectly, in the United States or to any
United States person other than such a financial institution and (b) you agree
that you will deliver to all purchasers of such Securities from you a written
statement in this form.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction and "United States
person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States and an estate or trust the income of which is subject to United
States Federal income taxation regardless of its source.
<PAGE>
November 7, 1996
(212) 701-3000
BOARD OF DIRECTORS
Manor Care, Inc.
11555 Darnestown Road
Gaitherburg, Maryland 20878-3200
Re: Manor Care, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is being rendered in connection with the Registration
Statement on Form S-3 (the "Registration Statement") filed by Manor Care, Inc.
(the "Company") with the Securities and Exchange Commission (the "Commission")
registering under the Securities Act of 1933, as amended (the "Act") $250
million aggregate principal amount of the Company's debt securities (the
"Securities") to be issued under a form of Indenture (the "Indenture") between
the Company and The Chase Manhattan Bank, as Trustee (the "Trustee").
In that connection, we have examined copies of such corporate records
and made such inquiries as we have deemed necessary for purposes of rendering
the opinion set forth below. It is our understanding that the terms of the
Securities will be consistent with the Indenture and that the Securities will be
executed and authenticated in accordance with the terms of the Indenture and
will be delivered to purchasers thereof against payment therefor.
Based upon the foregoing, in our opinion, the Securities to be sold
pursuant to the Registration Statement,
<PAGE>
-2-
when it becomes effective under the Act, will be legal, valid and binding
obligations of the Company enforceable in accordance with their terms. This
opinion is qualified insofar as enforceability may be limited by fraudulent
transfer, bankruptcy, insolvency or similar laws affecting creditors' rights
generally and the availability of equitable remedies may be limited by equitable
principles of general applicability.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement and to the reference to our firm under
the caption "Legal Opinions" in said Registration Statement. Our consent to such
reference does not constitute a consent under Section 7 of the Act.
Very truly yours,
/s/ Cahill Gordon & Reindel
Manor Care, Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges
(dollars in thousands)
<TABLE>
<CAPTION>
Aug
Ytd
1991(A) 1992(A) 1993(A) 1994(A) 1995(A) 1996(A)) 1997(A)
------- ------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME FROM CONTINUING OPERATIONS
BEFORE TAXES $33,746 $85,276 $87,449 $119,184 $129,831 $111,471 $33,866
PLUS: FIXED CHARGES
(NET OF CAPITALIZED
INTEREST) 42,245 43,774 36,311 28,903 24,376 32,978 9,831
------ ------ ------ ------ ------ ------ -----
EARNINGS (AS DEFINED) $75,991 $129,050 $123,760 $148,087 $154,207 $144,449 $43,697
====== ======== ======= ======= ======= ======= ======
INTEREST EXPENSE &
AMORTIZATION OF DEBT
DISCOUNT $41,061 $42,549 $34,988 $27,441 $22,769 $30,338 $9,142
RENT EXPENSE (INTEREST
PORTION) 1,184 1,225 1,323 1,462 1,607 2,640
689
------ ------ ------ ------ ------ ------ -----
TOTAL FIXED CHARGES NET
OF CAPITALIZED INTEREST 42,245 43,774 36,311 28,903 24,376 32,978 9,831
CAPITALIZED INTEREST 2,534 346 1,009 631 1,803 3,100 1,365
------ ------ ------ ------ ------ ------ -----
TOTAL FIXED CHARGES $44,779 $44,120 $37,320 $29,534 $26,179 $36,078 $11,196
====== ====== ====== ====== ====== ====== ======
"EARNINGS" DIVIDED BY
FIXED CHARGES 1.70x 2.92x 3.32x 5.01x 5.89x 4.00x 3.90x
======= ======= ======= ======= ======= ======= ======
</TABLE>
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated
June 28, 1996 included and incorproated by reference in Manor Car, Inc.'s
Form 10-K for the year ended May 31, 1996 and to all references to our Firm
included in this registration statement.
Arthur Andersen LLP
Washington, D.C.
November 5, 1996
-------------------------------------------------------------------
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) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
Manor Care, Inc.
(Exact name of obligor as specified in its charter)
Delaware 52-1200376
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1155 Darnestown Road
Gaithersburg, MD 20878-3200
(Address of principal executive offices) (Zip Code)
-------------------------------------------
Debt Securities
(Title of the indenture securities)
-----------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State
House, Albany, New York 12110. Board of Governors of the Federal
Reserve System, Washington, D.C., 20551 Federal Reserve Bank of
New York, District No. 2, 33 Liberty Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers. Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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.
(On July 14, 1996, in connection with the merger of Chemical Bank and The Chase
Manhattan Bank (National Association), Chemical Bank, the surviving corporation,
was renamed The Chase Manhattan Bank).
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 31st day of October, 1996.
THE CHASE MANHATTAN BANK
By /s/ Andrew M. Deck
------------------------
Andrew M. Deck
Senior Trust Officer
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................................$ 4,167
Interest-bearing balances .................................... 5,094
Securities: ........................................................
Held to maturity securities......................................... 3,367
Available for sale securities........................................27,786
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ............................................. 7,204
Securities purchased under agreements to resell .... 136
Loans and lease financing receivables:
Loans and leases, net of unearned income $67,215
Less: Allowance for loan and lease losses 1,768
Less: Allocated transfer risk reserve .... 75
----------
Loans and leases, net of unearned income,
allowance, and reserve ........................................ 65,372
Trading Assets ......................................................28,610
Premises and fixed assets (including capitalized
leases).............................................................. 1,326
Other real estate owned .............................................. 26
Investments in unconsolidated subsidiaries and
associated companies............................................. 68
Customer's liability to this bank on acceptances
outstanding .......................................................995
Intangible assets ......................................................309
Other assets .........................................................6,993
TOTAL ASSETS ......................................................$151,453
=========
- 4 -
LIABILITIES
Deposits
In domestic offices ...........................................$46,917
Noninterest-bearing .......... ...$16,711
Interest-bearing ............ ......... 30,206
In foreign offices, Edge and Agreement subsidiaries,
and IBF's ......................................................31,577
Noninterest-bearing ........................$ 2,197
Interest-bearing ..................... 29,380
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased .......................................12,155
Securities sold under agreements to repurchase ...... 8,536
Demand notes issued to the U.S. Treasury .............. 1,000
Trading liabilities ............................................... 20,914
Other Borrowed money:
With a remaining maturity of one year or less ....... 10,018
With a remaining maturity of more than one year .... 192
Mortgage indebtedness and obligations under capitalized
leases
...................................................................... 12
Bank's liability on acceptances executed and outstanding 1,001
Subordinated notes and debentures ........................... 3,411
Other liabilities
.............................................................. 8,091
TOTAL LIABILITIES .................................................143,824
EQUITY CAPITAL
Common stock .........................................................620
Surplus
................................................................... 4,664
Undivided profits and capital reserves ...................... 2,970
Net unrealized holding gains (Losses)
on available-for-sale securities ......... .......................(633)
Cumulative foreign currency translation adjustments ... 8
TOTAL EQUITY CAPITAL .................................. .......... 7,629
------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ............................ $151,453
==========
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
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 appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
