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As filed with the Securities and Exchange Commission on January , 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
NATIONWIDE HEALTH PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
---------------
Maryland 95-3997619
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
(949) 718-4400
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
---------------
R. Bruce Andrews
Chief Executive Officer and President
Nationwide Health Properties, Inc.
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
(949) 718-4400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy To:
Gary J. Singer, Esq.
O'Melveny & Myers LLP
610 Newport Center Drive, Suite 1700
Newport Beach, CA 92660-6429
---------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, 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 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] _______
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] _______
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be offering price aggregate registration
securities to be registered registered(1) per unit(2) offering price(2) fee
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities................. $500,000,000 100% $500,000,000 $139,000
================================================================================================
</TABLE>
(1) Plus such additional principal amount as may be necessary such that, if
Debt Securities are issued with original issue discount, the aggregate
initial offering price of all Debt Securities will equal $500,000,000.
(2) Estimated solely for the purposes of determining the registration fee
pursuant to Rule 457(o).
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus supplement and the accompanying prospectus +
+is not complete and may be changed. These securities may not be sold until +
+the registration statement filed with the Securities and Exchange Commission +
+is effective. This prospectus supplement and the accompanying prospectus is +
+not an offer to sell nor does it seek an offer to buy these securities in any +
+jurisdiction where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, Dated January 15, 1999.
Prospectus Supplement to Prospectus dated January , 1999.
[LOGO OF NATIONWIDE HEALTH PROPERTIES, INC.]
$500,000,000
Medium-Term Notes, Series D
Due 9 Months or More from Date of Issue
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TERMS OF SALE
The following terms may apply to the notes which Nationwide Health
Properties, Inc. may sell at one or more times. The final terms for each note
will be included in a pricing supplement. We will receive between $496,250,000
and $499,375,000 of the proceeds from the sale of the notes, after paying the
agents commissions of between $625,000 and $3,750,000.
. Mature 9 months to 30 years or more
. Fixed or floating interest rate or indexed notes or zero-coupon or other
original issue discount notes. The floating interest rate may be based on:
. CD rate
. Commercial paper rate
. Federal Funds effective rate
. LIBOR
. Prime rate
. Treasury rate
. Any other rate specified by us in the pricing supplement
. Any combination of rates specified in a pricing supplement
. Certificated or book-entry form
. Subject to redemption and repurchase at option of Nationwide Health
Properties, Inc. or the holder
. Not convertible, amortized or subject to a sinking fund
. Interest paid on fixed rate notes semi-annually
. Interest paid on floating rate notes monthly, quarterly, semi-annually or
annually
. Minimum denominations of $1,000 increased in multiples of $1,000
. May be foreign currency or composite currency denominated
. Same day settlement and payment. Immediately available funds
----------
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
----------
Nationwide Health Properties, Inc. may sell the notes directly or through one
or more agents or dealers, including the agents listed below. The agents are
not required to sell any specific number or amount of the notes. The agents
will use their reasonable efforts to sell the notes offered.
Goldman, Sachs & Co. Merrill Lynch & Co.
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Prospectus Supplement dated , 1999.
<PAGE>
THE COMPANY
Nationwide Health Properties, Inc., a Maryland corporation organized in
October 1985 (the "Company"), is a real estate investment trust ("REIT") which
invests primarily in health care related facilities and provides financing to
health care providers. As of September 30, 1998, the Company had investments in
337 facilities located in 33 states. The facilities include 198 skilled nursing
facilities, 104 assisted living facilities, 14 continuing care retirement
communities, 16 residential care facilities for the elderly, two rehabilitation
hospitals and three medical clinics. The facilities are operated by 60
different operators, including the following publicly traded companies:
Alternative Living Services, Inc., American Retirement Corporation, ARV
Assisted Living, Inc., Assisted Living Concepts, Inc., Beverly Enterprises,
Inc., Extendicare Health Services, Inc., Harborside Healthcare Corporation,
HEALTHSOUTH Corporation, Integrated Health Services, Inc., Lexington Healthcare
Group, Inc., Mariner Post-Acute Network, Inc., NewCare Health Corporation, Res-
Care, Inc., Sun Healthcare Group, Inc. and UNISON HealthCare Corporation. Of
the operators of the facilities, only Alternative Living Services, Inc. and
Beverly Enterprises, Inc. account for more than 10% of the Company's revenues.
They accounted for 12% and 15%, respectively, of the Company's total revenues
for the nine months ended September 30, 1998.
As of September 30, 1998, the Company had direct ownership of 154 skilled
nursing facilities, 96 assisted living facilities, nine continuing care
retirement communities, 16 residential care facilities for the elderly, two
rehabilitation hospitals and three medical clinics. All of the Company's owned
facilities are leased under "net" leases, which are accounted for as operating
leases.
The leases have initial terms ranging from 9 to 19 years, and the leases
generally have two or more multiple-year renewal options. The Company earns
fixed monthly minimum rents and may earn periodic additional rents. The
additional rent payments are generally computed as a percentage of facility net
patient revenues in excess of base amounts or as a percentage of the increase
in the consumer price index. Additional rents are generally calculated and
payable monthly or quarterly. Most leases contain provisions such that total
rent cannot decrease from one year to the next. Most leases contain cross
collateralization and cross default provisions tied to other leases with the
same lessee, as well as grouped lease renewals and grouped purchase options.
Obligations under the leases have corporate guarantees, and leases covering 176
facilities are backed by irrevocable letters of credit or security deposits
which cover one to 12 months of monthly minimum rents. Under the terms of the
leases, the lessee is responsible for all maintenance, repairs, taxes and
insurance on the leased properties.
As of September 30, 1998, the Company held 34 mortgage loans secured by 44
skilled nursing care facilities, eight assisted living facilities and five
continuing care retirement communities. As of September 30, 1998, the mortgage
loans had a net book value of approximately $208,094,000 with individual
outstanding balances ranging from approximately $571,000 to $21,500,000 and
maturities ranging from 1999 to 2031.
The Company anticipates providing lease or mortgage financing for health
care facilities to qualified operators and acquiring additional health care
related facilities, including skilled nursing facilities, assisted living
facilities, acute care hospitals and medical office buildings. Financing for
such future investments may be provided by borrowings under the Company's bank
line of credit, private placements or public offerings of debt or equity, and
the assumption of secured indebtedness.
The Company believes that it has operated in such a manner as to qualify for
taxation as a REIT under Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended, commencing with its taxable year ending December 31, 1985,
and the Company intends to continue to operate in such a manner. If the Company
qualifies for taxation as a REIT, it will generally not be subject to federal
corporate income taxes on its net income that is currently distributed to
stockholders. This
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treatment substantially eliminates the "double taxation" (e.g., at the
corporate and stockholder levels) that generally results from investment in
stock of a corporation. Among the requirements for taxation as a REIT, the
Company is required to distribute substantially all of its taxable income
(determined without regard to capital gains) each year. Failure to do so may
cause the Company to fail to qualify for taxation as a REIT.
RECENT DEVELOPMENTS
Between September 30, 1998 and December 31, 1998, the Company acquired six
skilled nursing facilities, one assisted living facility and one residential
care facility for the elderly in six separate transactions for an aggregate
investment of approximately $25,137,000. Construction of one skilled nursing
facility, one assisted living facility and one continuing care retirement
community was also completed in which the Company's total investment was
approximately $19,969,000. Upon acquisition or completion of construction, as
applicable, the facilities were concurrently leased under terms generally
similar to the Company's existing leases. The acquisitions and construction
were funded by bank borrowings on the Company's revolving bank line of credit
and by cash on hand.
Between September 30, 1998 and December 31, 1998, one mortgage loan securing
two facilities which had a principal balance at September 30, 1998 of
approximately $2,154,000 was repaid.
On November 20, 1998, the Company issued $65,000,000 in aggregate principal
amount of medium-term notes. The notes bear fixed interest at a weighted
average interest rate of 7.71% and have a weighted average maturity of 22.0
years. The proceeds were used to repay borrowings on the Company's revolving
bank line of credit.
PRICING SUPPLEMENT
The pricing supplement for each offering of notes will contain the specific
information and terms for that offering. The pricing supplement may also add,
update or change information contained in this prospectus supplement. It is
important for you to consider the information contained in this prospectus
supplement, the prospectus, the incorporated documents and the pricing
supplement in making your investment decision.
USE OF PROCEEDS
The net proceeds from the sale of the notes will be used for general
corporate purposes, including the repayment of amounts outstanding under the
Company's revolving bank line of credit. As of December 31, 1998, the aggregate
amount of such indebtedness was approximately $42 million having interest rates
between 6.0625% and 7.75% and a maturity date of March 31, 2001. Amounts
outstanding under the bank line of credit were incurred for general corporate
purposes, including the acquisition of health care facilities and mortgage
loans secured by health care facilities.
RATIO OF EARNINGS TO FIXED CHARGES
The Ratio of Earnings to Fixed Charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended December 31, September 30,
------------------------ -------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio............................... 7.63 5.52 4.44 3.64 3.03 3.22
</TABLE>
For current information on the Ratio of Earnings to Fixed Charges, please
see our most recent Form 10-K and 10-Q. See "Where You Can Find More
Information."
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DESCRIPTION OF THE NOTES
We will issue the notes under an indenture between us and the Trustee, Chase
Manhattan Bank and Trust Company, dated January 13, 1999. This prospectus
supplement briefly outlines some of the indenture provisions. If you would like
more information on these provisions, review the indenture and its supplements
that we filed with the SEC. See "Where You Can Find More Information" on how to
locate the indenture and the supplements.
The indenture does not limit the amount of debt securities that may be
issued. As of the date of this prospectus supplement, the Company has
authorized the issuance of up to $500,000,000 of notes as a separate series of
debt securities. Each series of debt securities may differ as to their terms.
For current information on the Company's outstanding debt see our most recent
Form 10-K and 10-Q. See "Where You Can Find More Information."
The notes are unsecured and will rank equally with all of the Company's
unsecured and unsubordinated indebtedness. The notes will be denominated in
U.S. dollars and the Company will pay principal and interest in U.S. dollars.
The notes will not be subject to any conversion, amortization or sinking fund.
It is anticipated that the notes will be "book-entry," represented by a
permanent global note registered in the name of The Depository Trust Company,
or its nominee. However, the Company reserves the right to issue notes in
certificate form registered in the names of the noteholders.
In the discussion that follows, whenever we talk about paying principal on
the notes, we mean at maturity, redemption or repurchase. In discussing the
time for notices and how the different interest rates are calculated, all times
are New York City time, unless otherwise noted.
As used herein, "Business Day" means, unless otherwise specified in the
applicable pricing supplement, any day other than a Saturday or Sunday or any
other day on which banks in The City of New York are generally authorized or
obligated by law or executive order to close and, with respect to notes as to
which LIBOR is an applicable Base Rate, is also a London Business Day. As used
herein, "London Business Day" means any day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.
The following terms may apply to each note as specified in the applicable
pricing supplement and the note.
Redemption
If provided in the applicable pricing supplement, the Company may redeem the
notes, in whole or in part, at the option of the Company, upon notice given not
less than 30 nor more than 60 days prior to the date of redemption unless a
shorter period is set forth in the pricing supplement. The pricing supplement
will set forth the terms of any redemption, including, but not limited to, the
dates on which redemption may be elected and the price (including premium, if
any) at which the notes may be redeemed.
Repayment
If provided in the applicable pricing supplement, the noteholder may have
the right to cause the Company to repay the notes prior to maturity on the
dates specified in the pricing supplement. Noteholders desiring to exercise
their repayment option must notify the paying agent at least 30 but not more
than 60 days prior to the optional repayment date. If no optional repayment
date is included in the pricing supplement, the notes will not be repayable at
the option of the noteholder prior to maturity.
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Interest
General
Unless otherwise specified in the applicable pricing supplement, each note
will bear interest from the date of issue at the rate per annum or, in the case
of a floating rate note, pursuant to the Base Rate or interest rate formula,
stated therein until the principal thereof is paid or made available for
payment. Unless otherwise specified in an applicable pricing supplement,
interest payments shall be the amount of interest accrued from and including
the next preceding Interest Payment Date in respect of which interest has been
paid (or from and including the date of issue if no interest has been paid with
respect to a note), to but excluding the Interest Payment Date or Maturity (an
"Interest Accrual Period"), as the case may be.
Interest will be payable in arrears on each date specified in the applicable
pricing supplement on which an installment of interest is due and payable
(each, an "Interest Payment Date") and at maturity. Interest will be payable to
the person in whose name a note is registered at the close of business on the
Regular Record Date next preceding each Interest Payment Date; provided,
however, that interest payable at maturity will be payable to the person to
whom principal shall be payable. Unless otherwise specified in an applicable
pricing supplement, if the original issue date of a note is between a Regular
Record Date and the related Interest Payment Date, the initial interest payment
will be made on the Interest Payment Date following the next succeeding Regular
Record Date to the registered holder on such next succeeding Regular Record
Date. Unless otherwise specified in the applicable pricing supplement, the
"Regular Record Date" will be the date 15 calendar days (whether or not a
Business Day) immediately preceding the related Interest Payment Date.
Interest rates offered on the notes may differ depending upon, among other
factors, the aggregate principal amount of notes purchased in any single
transaction. Notes with different variable terms other than interest rates may
also be offered concurrently to different investors. Interest rates or formulas
and other terms of notes are subject to change from time to time, but no such
change will affect any note previously issued or as to which an offer to
purchase has been accepted by us.
Fixed Rate Notes
Unless otherwise specified in the applicable pricing supplement, interest on
fixed rate notes will be payable semiannually on each April 1 and October 1 and
at maturity. If any Interest Payment Date or maturity of a fixed rate note
falls on a day that is not a Business Day, the related payment of principal,
premium, if any, and interest will be made on the next succeeding Business Day
as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or maturity, as the case may be. Unless otherwise specified in an
applicable pricing supplement, interest on each fixed rate note will be
calculated on the basis of a 360-day year of twelve 30-day months.
Floating Rate Notes
Unless otherwise specified in an applicable pricing supplement, floating
rate notes will be issued as described below. Interest on floating rate notes
will be determined by reference to a "Base Rate," which may be one or more of
(a) the Certificate of Deposit Rate; (b) the Commercial Paper Rate; (c) the
Federal Funds Rate; (d) LIBOR; (e) the Prime Rate; (f) the Treasury Rate; or
(g) such other Base Rate or interest rate formula as may be set forth in the
applicable pricing supplement. In addition, a floating rate note may bear
interest by reference to two or more Base Rates determined in the same manner
as the Base Rates are determined for the types of notes described above.
The applicable pricing supplement and the related note will specify the Base
Rate or Rates and the Spread and/or Spread Multiplier (each, as defined below),
if any, and the maximum or minimum
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interest rate limitation, if any, applicable to each floating rate note. In
addition, the pricing supplement and the applicable note will define or
particularize for each floating rate note the following terms (each, as
defined below), if applicable: Initial Interest Rate, Index Maturity, Interest
Payment Dates, Interest Reset Dates, Interest Reset Period, Regular Record
Dates and Calculation Agent (if other than Chase Manhattan Bank and Trust
Company).
The interest rate on each floating rate note will be calculated by
reference to the specified Base Rate or two or more specified Base Rates, in
either case plus or minus the Spread, if any, and/or multiplied by the Spread
Multiplier, if any. The "Spread" is the number of basis points to be added to
or subtracted from the related Base Rate or Rates applicable to the floating
rate note. The "Spread Multiplier" is the percentage of the related Base Rate
or Rates applicable to the floating rate note by which such Base Rate or Rates
will be multiplied to determine the applicable interest rate on the floating
rate note. The "Index Maturity" is the period to maturity of the instrument or
obligation with respect to which the related Base Rate or Rates is calculated.
The Spread, Spread Multiplier, Index Maturity and other variable terms of the
floating rate notes are subject to change by the Company from time to time,
but no such change will affect any floating rate note previously issued or as
to which an offer to purchase has been accepted by the Company.
Each applicable pricing supplement will specify whether the rate of
interest on each floating rate note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other period (each, an "Interest
Reset Period"), and the dates on which such interest rate will be reset (each,
an "Interest Reset Date"). Unless otherwise specified in an applicable pricing
supplement, the Interest Reset Date will be, in the case of floating rate
notes which reset:
(a) daily, each Business Day;
(b) weekly, the Wednesday of each week (with the exception of weekly reset
Treasury Rate Notes which will reset the Tuesday of each week, except as
specified below);
(c) monthly, the third Wednesday of each month;
(d) quarterly, the third Wednesday of March, June, September and December
of each year;
(e) semiannually, the third Wednesday of each of the two months specified
in the applicable pricing supplement; and
(f) annually, the third Wednesday of the month specified in the applicable
pricing supplement.
If any Interest Reset Date for any floating rate note would otherwise be a
day that is not a Business Day, such Interest Reset Date will be postponed to
the next succeeding Business Day, except that in the case of a LIBOR note (or
a note for which the interest rate is determined with reference to LIBOR), if
such Business Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding Business Day.
The interest rate applicable to each Interest Accrual Period commencing on
the Interest Reset Date applicable to such Interest Accrual Period will be the
rate determined on the applicable "Interest Determination Date." Unless
otherwise specified in an applicable pricing supplement, the Interest
Determination Date with respect to the Certificate of Deposit Rate, Commercial
Paper Rate, Federal Funds Rate and the Prime Rate will be the second Business
Day preceding each Interest Reset Date for the related note; and the Interest
Determination Date with respect to LIBOR will be the second London Business
Day preceding each Interest Reset Date for the related note. With respect to
the Treasury Rate, unless otherwise specified in an applicable pricing
supplement, the Interest Determination Date will be the day of the week in
which the Interest Reset Date falls on which Treasury Bills (as defined below)
normally would be auctioned (Treasury Bills are normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is
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normally held on the following Tuesday, except that such auction may be held on
the preceding Friday); provided, however, that if as a result of a legal
holiday an auction is held on the Friday of the week preceding the related
Interest Reset Date, the related Interest Determination Date shall be such
preceding Friday; and provided, further, that if an auction shall fall on any
Interest Reset Date, then the related Interest Reset Date shall instead be the
first Business Day following such auction. The Interest Determination Date
pertaining to a floating rate note, the interest rate of which is determined
with reference to two or more Base Rates, will be the latest Business Day which
is at least two Business Days prior to the Interest Reset Date for the note on
which each Base Rate is determinable. Each Base Rate shall be determined and
compared on such date, and the applicable interest rate shall take effect on
the related Interest Reset Date.
A floating rate note may also have either or both of the following: (a) a
maximum limit, or ceiling, on the rate of interest which may accrue during any
Interest Accrual Period, and (b) a minimum limit, or floor, on the rate of
interest which may accrue during any Interest Accrual Period. In addition to
any maximum interest rate that may be applicable to any floating rate note
pursuant to the above provisions, the interest rate on floating rate notes will
in no event be higher than the maximum rate permitted by New York law, as the
same may be modified by United States law of general application.
Except as provided below or in the applicable pricing supplement, interest
will be payable, in the case of floating rate notes which reset (a) daily,
weekly or monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year, as specified in
the applicable pricing supplement; (b) quarterly, on the third Wednesday of
March, June, September and December of each year; (c) semiannually, on the
third Wednesday of each of the two months of each year specified in the
applicable pricing supplement; and (d) annually, on the third Wednesday of the
month specified in the applicable pricing supplement and, in each case, at
maturity.
If any Interest Payment Date (other than at maturity) with respect to a
floating rate note falls on a day that is not a Business Day, such Interest
Payment Date will be the following Business Day, except that, in the case of a
LIBOR note (or a note for which the interest rate is determined with reference
to LIBOR), if such Business Day is in the next succeeding calendar month, such
Interest Payment Date shall be the immediately preceding Business Day. If the
maturity of a floating rate note falls on a day that is not a Business Day, the
payment of principal, premium, if any, and interest will be made on the next
succeeding Business Day, and no interest on such payment shall accrue for the
period from and after such maturity.
The interest rate in effect with respect to a floating rate note on each day
that is not an Interest Reset Date will be the interest rate determined as of
the Interest Determination Date pertaining to the immediately preceding
Interest Reset Date and the interest rate in effect on any day that is an
Interest Reset Date will be the interest rate determined as of the Interest
Determination Date pertaining to such Interest Reset Date, subject in either
case to any maximum or minimum interest rate limitation referred to above;
provided, however, that the interest rate in effect with respect to a floating
rate note for the period from the date of issue to the first Interest Reset
Date will be the Initial Interest Rate specified in the applicable pricing
supplement and the related note.
With respect to each floating rate note, accrued interest is calculated by
multiplying its face amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day from the date of issue, or from the last date to which interest has been
paid, to the date for which accrued interest is being calculated. Unless
otherwise specified in an applicable pricing supplement, the interest factor
for each such day is computed by dividing the interest rate applicable to such
day by 360, in the case of Certificate of Deposit Rate notes, Commercial Paper
Rate notes, Federal Funds Rate notes, LIBOR notes and Prime Rate notes, or by
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the actual number of days in the year in the case of Treasury Rate notes.
Unless otherwise specified in the applicable pricing supplement, the interest
factor for notes for which the interest rate is calculated with reference to
the lowest of two or more Base Rates will be calculated in each period in the
same manner as if only the lowest of the applicable Base Rates applied.
All percentages resulting from any calculation on floating rate notes will
be rounded to the nearest one hundred-thousandth of a percentage point with
five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts
used in or resulting from such calculation on floating rate notes will be
rounded to the nearest cent (with one-half cent being rounded upward).
Unless otherwise specified in the applicable pricing supplement, Chase
Manhattan Bank and Trust Company will be the "Calculation Agent." Upon the
request of the holder of any floating rate note, the Calculation Agent will
provide the interest rate then in effect and, if determined, the interest rate
that will become effective as a result of a determination made for the next
Interest Reset Date with respect to the floating rate note. Unless otherwise
specified in an applicable pricing supplement, the "Calculation Date," if
applicable, pertaining to any Interest Determination Date will be the earlier
of (i) the tenth calendar day after such Interest Determination Date or, if any
such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day preceding the applicable Interest Payment Date or the maturity, as
the case may be.
The interest rate in effect with respect to a floating rate note from the
date of issue to the first Interest Reset Date (the "Initial Interest Rate")
will be specified in the applicable pricing supplement. The interest rate for
each subsequent Interest Reset Date will be determined by the Calculation Agent
as follows:
Certificate of Deposit Rate. Certificate of Deposit Rate notes will bear
interest at the interest rates (calculated with reference to the Certificate of
Deposit Rate and the Spread and/or Spread Multiplier, if any) specified in such
Certificate of Deposit Rate notes and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement,
"Certificate of Deposit Rate" means, with respect to any Interest Determination
Date relating to a Certificate of Deposit Rate note or any Interest
Determination Date for a floating rate note for which the interest rate is
determined with reference to the Certificate of Deposit Rate (a "Certificate of
Deposit Rate Interest Determination Date"), the rate on such date for
negotiable certificates of deposit having the Index Maturity specified in the
applicable pricing supplement as published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates" or any successor publication ("H.15(519)") under the heading "CDs
(Secondary Market)." In the event such rate is not published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Certificate of
Deposit Rate Interest Determination Date, then the Certificate of Deposit Rate
will be the rate on such Certificate of Deposit Rate Interest Determination
Date for negotiable certificates of deposit of the Index Maturity specified in
the applicable pricing supplement as published in H.15 Daily Update (as defined
herein) or such other recognized electronic source used for the purposes of
displaying such rate ("Composite Quotations") under the heading "CDs (Secondary
Market)." If such rate is not published in H.15(519), H.15 Daily Update or
Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, then the Certificate of Deposit Rate on such Certificate of Deposit Rate
Interest Determination Date will be calculated by the Calculation Agent and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such Certificate of Deposit Rate Interest
Determination Date, of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in New York, New York (which may include one or both of
the agents) selected by the Calculation Agent for negotiable certificates of
deposit of major United States money center banks in the market for negotiable
certificates of deposit with a remaining
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maturity closest to the Index Maturity specified in the applicable pricing
supplement in an amount that is representative for a single transaction in that
market at that time; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Certificate of Deposit Rate in effect for the applicable period
will be the Certificate of Deposit Rate in effect on such Certificate of
Deposit Rate Interest Determination Date.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication.
Commercial Paper Rate. Commercial Paper Rate notes will bear interest at the
interest rates (calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier, if any) specified in such Commercial Paper
Rate notes and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to
a Commercial Paper Rate note or any Interest Determination Date for a floating
rate note for which the interest rate is determined with reference to the
Commercial Paper Rate (a "Commercial Paper Rate Interest Determination Date"),
the Money Market Yield (as defined below) on such date of the rate for
commercial paper having the index Maturity specified in the applicable pricing
supplement as published in H.15(519) under the heading "Commercial Paper-
Nonfinancial." In the event that such rate is not published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Commercial Paper
Rate Interest Determination Date, then the Commercial Paper Rate will be the
Money Market Yield on such Commercial Paper Rate Interest Determination Date of
the rate for commercial paper of the Index Maturity specified in the applicable
pricing supplement as published in H.15 Daily Update or Composite Quotations
under the heading "Commercial Paper-Nonfinancial" (with an Index Maturity of
one month or three months being deemed to be equivalent to an Index Maturity of
30 days or 90 days, respectively). If such rate is not published in H.15(519),
H.15 Daily Update or Composite Quotations by 3:00 P.M., New York City time, on
such Calculation Date, then the Commercial Paper Rate will be calculated by the
Calculation Agent and will be the Money Market Yield of the arithmetic mean of
the offered rates, as of 11:00 A.M., New York City time, on such Commercial
Paper Rate Interest Determination Date, of three leading dealers of commercial
paper in New York, New York (which may include one or both of the agents)
selected by the Calculation Agent for commercial paper of the specified Index
Maturity placed for an industrial issuer whose bond rating is "AA," or the
equivalent, from a nationally recognized statistical rating organization;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
in effect for the applicable period will be the Commercial Paper Rate in effect
on such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point)
calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
-----------
360 -- (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
Federal Funds Rate. Federal Funds Rate notes will bear interest at the
interest rates (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in such Federal Funds Rate
notes and in the applicable pricing supplement.
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Unless otherwise specified in the applicable pricing supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date relating to
a Federal Funds Rate note or any Interest Determination Date for a floating
rate note for which the interest rate is determined with reference to the
Federal Funds Rate (a "Federal Funds Rate Interest Determination Date"), the
rate of interest on that day for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)," as such rate is displayed on Bridge
Telerate, Inc. (or any successor service) on page 120 ("Telerate Page 120"). In
the event such rate is not published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Federal Funds Rate Interest Determination
Date, then the Federal Funds Rate will be the rate on such Federal Funds Rate
Interest Determination Date as published in H.15 Daily Update or Composite
Quotations under the heading "Federal Funds (Effective)." If such rate does not
appear on Telerate Page 120 or is not published in H.15(519), H.15 Daily Update
or Composite Quotations by 3:00 P.M., New York City time, on such Calculation
Date, the Federal Funds Rate on such Federal Funds Rate Interest Determination
Date will be calculated by the Calculation Agent and will be the arithmetic
mean of the rates for the last transaction in overnight Federal Funds arranged
by three leading dealers of Federal Funds transactions in New York, New York
(which may include one or both of the agents) selected by the Calculation Agent
as of 9:00 A.M., New York City time, on such Federal Funds Rate Interest
Determination Date; provided, however, that if the dealers so selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate in effect for the applicable period will be
the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date.
LIBOR. LIBOR notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified
in the LIBOR notes and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR note
or any Interest Determination Date for a floating rate note for which the
interest rate is determined with reference to LIBOR (a "LIBOR Interest
Determination Date"), LIBOR will be, as specified in the applicable pricing
supplement, either: (a) the arithmetic mean of the offered rates for deposits
in U.S. dollars having the Index Maturity designated in the applicable pricing
supplement, commencing on the second London Business Day immediately following
that LIBOR Interest Determination Date, that appear on the Reuters Screen LIBO
Page as of 11:00 A.M., London time, on that LIBOR Interest Determination Date,
if at least two such offered rates appear on the Reuters Screen LIBO Page
("LIBOR Reuters"), or (b) the rate for deposits in U.S. dollars having the
Index Maturity designated in the applicable pricing supplement commencing on
the second London Business Day immediately following that LIBOR Interest
Determination Date, that appears on the Telerate Page 3750 as of 11:00 A.M.,
London time, on that LIBOR Interest Determination Date ("LIBOR Telerate").
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks). "Telerate Page 3750" means the display designated as
page "3750" on the Telerate Service (or such other page as may replace the 3750
page on that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying London interbank
offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR
Telerate is specified in the applicable pricing supplement, LIBOR will be
determined as if LIBOR Telerate has been specified. If fewer than two offered
rates appear on the Reuters Screen LIBO Page, or if no rate appears on the
Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR Interest
Determination Date will be determined as if the parties had specified the rate
described in (ii) below.
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(ii) With respect to a LIBOR Interest Determination Date on which fewer than
two offered rates appear on the Reuters Screen LIBO Page, as specified in (i)
(a) above, or on which no rate appears on Telerate Page 3750, as specified in
(i) (b) above, as applicable, LIBOR will be determined on the basis of the
rates at which deposits in U.S. dollars having the Index Maturity designated in
the applicable pricing supplement are offered at approximately 11:00 A.M.,
London time, on that LIBOR Interest Determination Date by four major banks in
the London interbank market selected by the Calculation Agent ("Reference
Banks") to prime banks in the London interbank market commencing on the second
London Business Day immediately following that LIBOR Interest Determination
Date and in a principal amount equal to an amount of not less than $1 million
that is representative for a single transaction in such market at such time.
The Calculation Agent will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of that LIBOR Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR in respect of that LIBOR Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00
A.M., New York City time, on that LIBOR Interest Determination Date by three
major banks in the City of New York selected by the Calculation Agent for loans
in U.S. dollars to leading European banks having the Index Maturity designated
in the applicable pricing supplement commencing on the second London Business
Day immediately following that LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than $1 million that is
representative for a single transaction in such market at such time; provided,
however, that if the banks selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, LIBOR in effect for the applicable
period will be LIBOR in effect on such LIBOR Interest Determination Date.
Prime Rate. Prime Rate notes will bear interest at the rates (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in such Prime Rate notes and the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a
Prime Rate note or any floating rate note for which the interest rate is
determined with reference to the Prime Rate (a "Prime Rate Interest
Determination Date"), the rate on such date as such rate is published in
H.15(519) under the heading "Bank Prime Loan." If such rate is not published by
3:00 P.M., New York City time, on the related Calculation Date, then the Prime
Rate will be the rate published in H.15 Daily Update or Composite Quotations.
If such rate is not published in H.15(519), H.15 Daily Update or Composite
Quotations, then the Prime Rate shall be the arithmetic mean of the rates of
interest publicly announced by each bank that appears on the Reuters Screen
USPRIME1 Page (as defined below) as such bank's prime rate or base lending rate
as in effect for such Prime Rate Interest Determination Date. If fewer than
four such rates but more than one such rate appear on the Reuters Screen
USPRIME1 Page for such Prime Rate Interest Determination Date, the Prime Rate
shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by a 360-day year as of the close of
business on such Prime Rate Interest Determination Date by four major money
center banks (which may include affiliates of the agents) in The City of New
York selected by the Calculation Agent. If fewer than two such rates appear on
the Reuters Screen USPRIME1 Page, the Prime Rate will be determined by the
Calculation Agent on the basis of the rates furnished in The City of New York
by three substitute banks or trust companies organized and doing business under
the laws of the United States, or any State thereof, having total equity
capital of at least $500 million and being subject to supervision or
examination by Federal or State authority, selected by the Calculation Agent to
provide such rate or rates; provided, however, that if the banks or trust
companies selected as aforesaid are not quoting as mentioned in this sentence,
the Prime Rate determined as of such Prime Rate Interest Determination Date
will be the Prime Rate in effect on such Prime Rate Interest Determination
Date.
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"Reuters Screen USPRIME1 Page" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as
may replace the USPRIME1 page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks).
Treasury Rate. Treasury Rate notes will bear interest at the rates
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) specified in such Treasury Rate notes and in the applicable
pricing supplement.
Unless otherwise specified in the applicable pricing supplement, "Treasury
Rate" means, with respect to any Interest Determination Date relating to a
Treasury Rate note or any Interest Determination Date for a floating rate note
for which the interest rate is determined with reference to the Treasury Rate
(a "Treasury Rate Interest Determination Date"), the rate applicable to the
most recent auction of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified in the applicable pricing
supplement, as such rate is published in "AVGE INVEST YIELD" on the display on
Bridge Telerate, Inc. (or any successor service) on page 56 ("Telerate Page
56") or page 57 ("Telerate Page 57") or, if not published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Treasury Rate
Interest Determination Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the specified Index Maturity are not reported as provided
by 3:00 P.M., New York City time, on such Calculation Date, or if no such
auction is held in a particular week, then the Treasury Rate shall be the rate
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) on such Treasury Rate Interest
Determination Date of Treasury Bills having the Index Maturity specified in the
applicable pricing supplement as published in H.15(519) under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market" or, if not yet published
by 3:00 P.M., New York City time, on the related Calculation Date, the rate on
such Treasury Rate Interest Determination Date of such Treasury Bills as
published in H.15 Daily Update, or Composite Quotations, under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is
not yet published in H.15(519), H.15 Daily Update or Composite Quotations, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean of the secondary market bid rates, as of approximately 3:30 P.M., New York
City time, on such Treasury Rate Interest Determination Date, of three leading
primary U.S. government securities dealers (which may include one or both of
the agents) selected by the Calculation Agent, for the issue of Treasury Bills
with a remaining maturity closest to the specified Index Maturity; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the Treasury Rate in effect for the
applicable period will be the Treasury Rate in effect on such Treasury Rate
Interest Determination Date.
Original Issue Discount Notes
Notes may be issued at a price less than their stated redemption price at
maturity, resulting in the notes being treated as issued with original issue
discount for federal income tax purposes. Such discounted notes may currently
pay no interest or interest at a rate which at the time of issuance is below
market rates and such notes may provide that upon redemption or repayment prior
to their stated maturity or upon acceleration of the maturity of such notes, an
amount less than the stated principal amount thereof shall become due and
payable. If notes are issued with original issue discount, holders of such
notes will be required to include the amount of original issue discount in
income in accordance with applicable provisions of the Internal Revenue Code of
1986, as amended
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(the "Code"), and the Treasury Regulations promulgated thereunder. Special
federal income tax and other considerations applicable to any such discounted
notes may be described in the applicable pricing supplement.
Indexed Notes
Notes also may be issued with the principal amount payable at maturity,
premium, if any, and/or interest to be paid thereon to be determined with
reference to the price or prices of specified commodities or stocks, interest
rate indices, interest rate or exchange rate swap indices, the exchange rate of
one or more specified currencies (including a composite currency such as the
European Currency Unit) relative to an indexed currency, or such other price or
exchange rate or other financial index or indices as may be specified in such
note ("Indexed Notes"), as set forth in an indexed note supplement. Holders of
such notes may receive a principal amount at maturity that is greater than or
less than the face amount of the notes depending upon the relative value at
maturity of the specified indexed item. Information as to the method for
determining the principal payable at maturity and, where applicable, certain
historical information with respect to the specified indexed item or items and
tax considerations associated with investment in Indexed Notes, will be set
forth in the applicable indexed note supplement.
An investment in notes indexed, as to principal, premium and/or interest, to
one or more values of currencies (including exchange rates and swap indices
between currencies), commodities or interest rate or other indices entails
significant risks that are not associated with similar investments in a
conventional fixed-rate debt security. If the interest rate of an Indexed Note
is so indexed, it may result in an interest rate that is less than that payable
on a conventional fixed-rate debt security issued at the same time, including
the possibility that no interest will be paid, and, if the principal of and/or
premium amount of such an Indexed Note is so indexed, the principal amount
payable in respect thereof may be less than the original purchase price of such
Indexed Note if allowed pursuant to the terms thereof, including the
possibility that no principal will be paid. The secondary market for Indexed
Notes will be affected by a number of factors, independent of the
creditworthiness of the Company and the value of the applicable currency,
commodity or interest rate index, including the volatility of the applicable
currency, commodity or interest rate index, the time remaining to the maturity
of such notes, the amount outstanding of such notes and market interest rates.
The value of the applicable currency, commodity or interest rate index depends
on a number of interrelated factors, including economic, financial and
political events, over which the Company has no control. Additionally, if the
formula used to determine the principal, premium or interest payable with
respect to Indexed Notes contains a multiple or leverage factor, the effect of
any change in the applicable currency, commodity or interest rate index may be
increased. The historical experience of the relevant currencies, commodities or
interest rate indices should not be taken as an indication of future
performance of such currencies, commodities or interest rate indices during the
term of any Indexed Note. Accordingly, prospective investors should consult
their own financial and legal advisors as to the risks entailed by an
investment in Indexed Notes and the suitability of Indexed Notes in light of
their particular circumstances.
Notwithstanding anything to the contrary contained herein or in the
prospectus, for purposes of determining the rights of a holder of a note
indexed as to principal in respect of voting for or against amendments to the
Indenture and modifications and the waiver of rights thereunder, the principal
amount of such Indexed Note shall be deemed to be equal to the face amount
thereof upon issuance. The amount of principal payable at maturity will be
specified in the applicable pricing supplement.
Book-Entry Notes
Unless otherwise specified in an applicable pricing supplement, upon
issuance, all Book-Entry Notes having the same original issue date, stated
maturity and otherwise having identical terms and
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provisions will be represented by a single global security (each, a "Global
Security"). Each Global Security representing Book-Entry Notes will be
deposited with, or on behalf of, the depositary. Except as set forth below, a
Global 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 nominee to a
successor of the depositary or a nominee of such successor.
The Depository Trust Company, New York, New York ("DTC"), will be the
initial depositary with respect to the notes. DTC has advised the Company and
the agents that it is a limited-purpose trust company organized under the
banking laws of the State of New York, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers (including the agents),
banks, trust companies, clearing corporations and certain other organizations,
some of whom (and/or their representatives) own DTC. Access to DTC's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. Persons who are not participants
may beneficially own securities held by DTC only through participants.
Upon the issuance of the notes represented by a Global Security, DTC will
credit, on its book-entry registration and transfer system, the principal
amounts of the notes represented by such Global Security to the accounts of
participants. The accounts to be credited will be designated by the agents or
underwriters of such book-entry notes, as the case may be. Ownership of
beneficial interests in the Global Security will be limited to participants or
persons that hold interests through participants. Ownership of beneficial
interests in the notes will be shown on, and the transfer of that ownership
will be effected only through, records maintained by DTC (with respect to
interests of participants in DTC), or by participants in DTC or persons that
may hold interests through such participants (with respect to persons other
than participants in DTC). The laws of some states require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limitations and such laws may impair the ability of
holders of the notes to transfer beneficial interests in a Global Security.
So long as the depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, the depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the notes
represented by such Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in the notes
represented by a Global Security will not be entitled to have the notes
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of the notes in definitive form and
will not be considered the owners or holders thereof under the Indenture.
Payments of principal of and interest on the notes will be made by the
Company through the Trustee to DTC or its nominee, as the case may be, as the
registered owner of a Global Security. Neither the Company nor the Trustee will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. The Company expects that DTC, upon receipt
of any payment of principal or interest in respect of a Global Security, will
credit the accounts of the related participants with payment in amounts
proportionate to their respective holdings in principal amount of beneficial
interest in such Global Security as shown on the records of DTC. The Company
also expects that payments by
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participants to owners of beneficial interests in a Global Security will be
governed by standing customer 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.
If DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the Company within 60 days, the
Company will issue definitive notes in exchange for the notes represented by
such Global Security or Securities. In addition, the Company may at any time
and in its sole discretion determine to discontinue use of the Global Security
and, in such event, will issue definitive notes in exchange for the notes
represented by such Global Security or Securities. Notes so issued will be
issued in denominations of $1,000 and integral multiples thereof and will be
issued in registered form only, without coupons.
DTC management is aware that some computer applications, systems, and the
like for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community (the "Industry") that it has developed and is implementing a program
so that its Systems, as the same relate to the timely payment of distributions
(including principal and income payments) to securityholders, book-entry
deliveries, and settlement of trades within DTC ("DTC Services"), continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, DTC's plan includes
a testing phase, which is expected to be completed within appropriate time
frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as DTC's direct and indirect participants and third party vendors from
whom DTC licenses software and hardware, and third party vendors on whom DTC
relies for information or the provision of services, including
telecommunication and electrical utility service providers, among others. DTC
has informed the Industry that it is contacting (and will continue to contact)
third party vendors from whom DTC acquires services to: (i) impress upon them
the importance of such services being Year 2000 compliant; and (ii) determine
the extent of their efforts for Year 2000 remediation (and, as appropriate,
testing) of their services. In addition, DTC is in the process of developing
such contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for information purposes only and is not intended to
serve as a representation, warranty, or contract modification of any kind.
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UNITED STATES TAXATION
Set forth below is a summary of certain U.S. federal income tax
considerations of importance to holders of the notes. The summary applies to
holders who hold the notes as capital assets and not special classes of
holders, such as banks, insurance companies, regulated investment companies,
dealers in securities or currencies, persons who hold the notes as a hedge
against currency risks or who hedge any currency risks of holding the notes,
tax-exempt investors or U.S. holders whose functional currency is other than
the U.S. dollar. The summary also does not deal with holders of the notes other
than original purchasers. The discussion below is based upon the Code and
final, temporary and proposed U.S. Treasury Regulations, which are subject to
change possibly with retroactive effect. Persons considering the purchase of
the notes should consult their own tax advisors concerning the application of
U.S. federal income tax laws to their particular situations as well as any
consequences arising under the laws of any other taxing jurisdiction.
U.S. Tax Considerations for U.S. Holders
General
Interest on the notes will be taxable to a U.S. holder as ordinary interest
income at the time it is accrued or received, depending in part on the U.S.
holder's method of accounting for tax purposes.
As used herein, "U.S. holder" is a holder of a note who is a citizen or
resident of the United States, a corporation or partnership (including an
entity treated as a corporation or partnership for U.S. tax purposes) or other
entity created or organized in or under the laws of the United States or any
State thereof or the District of Columbia (unless, in the case of a
partnership, Treasury regulations provide otherwise), an estate the income of
which is subject to U.S. federal income taxation regardless of its source, a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S. persons
have authority to control all substantial decisions of the trust, and any other
holder whose ownership of a note is effectively connected with the conduct of a
trade or business in the United States. Notwithstanding the preceding sentence,
to the extent provided in Treasury regulations, certain trusts in existence on
August 20, 1996, and treated as U.S. persons prior to such date, that elect to
continue to be treated as U.S. persons will also be a U.S. holder. The term
"non-U.S. holder" means a holder that is not a U.S. holder.
Original Issue Discount
General. Notes with a term greater than one year may be issued with original
issue discount for federal income tax purposes. Original issue discount is the
excess of the "stated redemption price at maturity" of a note over its "issue
price." If this excess is less than 0.25% of the note's stated redemption price
at maturity multiplied by the number of complete years to its maturity (a "de
minimis amount"), the amount of original issue discount is considered to be
zero. The "stated redemption price at maturity" of a note is all amounts
payable on the note however designated, other than payments of "qualified
stated interest." "Issue price" is defined as the first offering price to the
public at which a substantial amount of the notes have been sold. "Qualified
stated interest" is stated interest that is unconditionally payable in cash or
in property (other than debt instruments of the issuer) at least annually at a
single fixed rate (a single fixed rate is a rate that takes into account the
length of time between payments). If a note has certain interest payment
characteristics (e.g., interest holidays, interest payable in additional notes
or stepped interest rates), then the note may also be treated as having
original issue discount for federal income tax purposes even if such note was
issued at an issue price which does not otherwise result in original issue
discount.
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Accrual of Original Issue Discount. U.S. holders are required to include
original issue discount in income before the receipt of cash attributable to
such income regardless of such U.S. holder's method of accounting for tax
purposes. The amount of original issue discount includible in income by the
initial U.S. holder of a note is the sum of the daily portions of original
issue discount which accrues under a constant yield method with respect to such
note for each day during the accrual period or portion of the accrual period in
which such U.S. holder held such note. The amount of original issue discount
which accrues in an accrual period is an amount equal to the excess (if any) of
(a) the product of the note's adjusted issue price at the beginning of such
accrual period and its yield to maturity (determined on the basis of
compounding at the end of each accrual period and appropriately adjusted to
take into account the length of the particular accrual period), over (b) the
sum of the qualified stated interest payments, if any, allocable to the accrual
period. The daily portion of original issue discount is determined by
allocating to each day in any accrual period a ratable portion of the increase
during such accrual period in the note's "adjusted issue price." The "adjusted
issue price" of a note at the beginning of any accrual period is the sum of the
issue price of such note plus the original issue discount allocable to all
prior accrual periods reduced by payments on the note other than qualified
stated interest. An "accrual period" may be of any length and the accrual
periods may even vary in length over the term of the note, provided that each
accrual period is no longer than one year and each scheduled payment of
principal or interest occurs on the first day or the last day of an accrual
period. Under these rules, U.S. holders will generally have to include in
income increasingly greater amounts of original issue discount in successive
accrual periods.
Floating Rate Notes
The floating rate notes are treated as either "variable rate debt
instruments" or contingent notes. The Treasury regulations provide special
rules for determining the amount and accrual of qualified stated interest and
original issue discount on a floating rate note. A floating rate note will
qualify as a variable rate debt instrument if (a) its issue price does not
exceed the total noncontingent principal payments due under such floating rate
note by more than a specified de minimis amount, (b) it provides for stated
interest, paid or compounded at least annually, at current values of (i) one or
more "qualified floating rates," (ii) a single fixed rate and one or more
qualified floating rates, (iii) a single "objective rate," or (iv) a single
fixed rate and a single objective rate that is a "qualified inverse floating
rate," as such terms are defined under the Treasury regulations, (c) it
provides that a qualified floating rate or objective rate in effect at any time
during its term is set at a current value of that rate, as such terms are
defined in the regulations, (d) except as provided under (a) above, it does not
provide for any contingent principal payments, and (e) if the floating rate is
subject to one or more restrictions (e.g., a cap or a floor), those
restrictions last throughout the term of the note and are not reasonably
expected as of the issue date to cause the yield on the floating rate note to
differ significantly from the expected yield determined without the
restriction. A variable rate is a "qualified floating rate" if variations in
the value of the rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
note is denominated. An "objective rate" is a rate that is not itself a
qualified floating rate but which is determined using a single fixed formula
and which is based upon objective financial or economic information. A
"qualified inverse floating rate" is any objective rate where such rate is
equal to a fixed rate minus a qualified floating rate as long as variations in
the rate can reasonably be expected to inversely reflect contemporaneous
variations in the qualified floating rate. The definitions of such terms and
their application, if any, to a particular floating rate note will be described
in the related pricing supplement.
If a floating rate note that qualifies as a variable rate debt instrument
provides for stated interest at a single qualified floating rate or a single
objective rate and the interest is unconditionally payable in cash or property
(other than debt instruments of the Company) at least annually, then all such
stated interest will constitute qualified stated interest, and will be taxable
to the U.S. holder as
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ordinary interest income at the time it is accrued or received, depending on
such U.S. holder's method of accounting for tax purposes. Thus, such a floating
rate note generally will not be treated as having original issue discount
unless its stated principal amount exceeds its issue price by more than a
specified de minimis amount. The amount of qualified stated interest and
original issue discount, if any, that accrues during an accrual period is
determined under the rules applicable to fixed rate debt instruments described
above by assuming that the variable rate is a fixed rate equal to (a) in the
case of a qualified floating rate or qualified inverse floating rate, the value
as of the issue date of the qualified floating rate, or qualified inverse
floating rate, or (b) in the case of an objective rate (other than a qualified
inverse floating rate), a fixed rate that reflects the yield that is reasonably
expected for the debt instrument. Moreover, the amount of qualified stated
interest allocable to an accrual period will be increased (or decreased) if the
interest actually paid during an accrual period exceeds (or is less than) the
interest assumed to be paid during the accrual period as determined under the
rules described in this paragraph.
In general, any other floating rate note that qualifies as a variable rate
debt instrument generally will be converted into an "equivalent fixed rate debt
instrument," and the amount and accrual of qualified stated interest and
original issue discount on such floating rate note are then determined by
applying the general original issue discount rules. The method for converting
such a floating rate note to a fixed rate instrument will depend on its
characteristics. Such a floating rate note providing for a qualified floating
rate or a qualified inverse floating rate is converted by substituting a fixed
rate (the "equivalent" fixed rate) equal to the value of the qualified floating
rate or qualified inverse floating rate as of such floating rate note's issue
date. Such a floating rate note providing for an objective rate (other than a
qualified inverse floating rate) is converted by substituting an equivalent
fixed rate that reflects the yield that is reasonably expected on such floating
rate note. In the case of a floating rate note that qualifies as a variable
rate debt instrument and provides for stated interest at either one or more
qualified floating rates or a qualified inverse floating rate and additionally
provides for stated interest at a single fixed rate, the fixed rate is
converted into a qualified floating rate (or a qualified inverse floating rate
if such floating rate note provides for a qualified inverse floating rate). The
qualified floating rate or qualified inverse floating rate that replaces the
fixed rate must be such that the fair market value of the variable rate debt
instrument as of the variable rate debt instrument's issue date is
approximately the same as the fair market value of an otherwise identical debt
instrument that provides for either the qualified floating rate (or qualified
inverse floating rate) rather than the fixed rate. Such a floating rate note is
then converted into an "equivalent fixed rate debt instrument" as described
above. Once the floating rate note is converted into an "equivalent fixed rate
debt instrument" pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, will be determined for the
"equivalent fixed rate debt instrument" by applying to it the general original
issue discount rules, and U.S. holders of a floating rate note will account for
such original issue discount and qualified stated interest as if they held the
"equivalent fixed rate debt instrument." For each accrual period appropriate
adjustments will be made to the amount of qualified stated interest or original
issue discount assumed to have been accrued or paid with respect to the
"equivalent fixed rate debt instrument" in the event that such amounts differ
from the actual amount of interest accrued or paid on the floating rate note
during the accrual period.
If a floating rate note does not qualify as a "variable rate debt
instrument" under the original issue discount regulations, it will be treated
as a contingent note (as defined below). The applications of these rules to a
particular floating rate note will be described in the related pricing
supplement.
Contingent Notes
Notes may be issued under circumstances in which the amount and/or timing of
interest and principal on the notes is subject to a contingency ("contingent
notes"). For example, the Company may issue indexed notes under which interest
and/or principal is determined by reference to multiple
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formulae based on the values of specified stocks, commodities, foreign
currencies or other personal property. If a floating rate note does not qualify
as a variable rate debt instrument under the regulations, then the floating
rate note would be treated as a contingent note for tax purposes. With some
exceptions, the amount of interest that will accrue on such contingent notes in
each accrual period will be determined under the "noncontingent bond method."
For each issue of contingent notes, the noncontingent bond method requires the
issuer to determine a comparable yield, a projected payment schedule, the daily
portions of interest accruing in each accrual period, and then to make
appropriate adjustments for any differences between projected and actual
contingent payments made to holders of contingent notes. The proper U.S.
federal income tax treatment of a contingent note will be described in the
related pricing supplement.
Notes with Put and/or Call Options
Certain notes (i) may be redeemable at the option of the Company prior to
their stated maturity (i.e., a "call option"), and /or (ii) may be repayable at
the option of the holder prior to their stated maturity (i.e., a "put option").
Notes containing such features may be subject to special rules. The
application, if any, of these rules will be described in the related pricing
supplement.
Acquisition Discount on Short Term Notes
Notes that have a fixed maturity of one year or less ("short-term notes")
may be issued with acquisition discount. U.S. holders who are accrual basis
taxpayers, cash basis taxpayers making an appropriate election under the Code
and taxpayers in certain specified classes will be required to include
acquisition discount in income currently in an amount and manner similar to
that applicable to original issue discount. Individuals and non-electing cash
basis taxpayers holding short-term notes are not required to include accrued
acquisition discount in income until the cash payments attributable to such
discount are received, which payments will be treated as ordinary income. A
U.S. holder who does not recognize acquisition discount currently will be
required to recognize ordinary income on the sale, exchange or retirement of
the short-term note to the extent of accrued acquisition discount, and may be
subject to limitations on the deductibility of interest on indebtedness
incurred to purchase or carry such notes.
Market Discount and Premium
If a U.S. holder purchases a note that was not issued with original issue
discount, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of a note that was issued with original issue discount, its adjusted issue
price as of the purchase date, the amount of the difference will be treated as
a "market discount." If the market discount exceeds a de minimis amount, any
gain on the sale, exchange or retirement of the note is treated as ordinary
interest income at the time of the disposition to the extent of the accrued
market discount, unless the U.S. holder elects to accrue market discount in
income on a current basis. In addition, a U.S. holder is required to defer
deductions until maturity of the note or its earlier disposition for a portion
of such holder's interest expense on any indebtedness incurred to purchase or
carry such note. Market discount is normally accrued on a straight-line basis,
but a holder may elect to use a constant yield method.
If a U.S. holder acquires a note issued with original issue discount for an
amount above the adjusted issue price, such U.S. holder may be considered to
have purchased the note at an "acquisition premium." The amount of original
issue discount which such holder must otherwise include in its gross income
with respect to the note for any taxable year (or portion thereof in which the
holder holds the note) will be reduced (but not below zero) by the portion of
acquisition premium properly allocable to such period.
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<PAGE>
A U.S. holder of a note whose tax basis immediately after its acquisition by
the holder exceeds the sum of all amounts payable on the note after the
acquisition date other than qualified stated interest shall be considered to
have purchased such note with "bond premium" equal in amount to such excess.
The U.S. holder may elect to amortize the bond premium by offsetting it against
qualified stated interest income. The offset will be calculated for each
accrual period using constant yield principles, but the offset for an accrual
period will be taken into account only when the U.S. holder takes the
corresponding qualified stated interest income into consideration. In case the
amount of bond premium available for offset is greater than the corresponding
amount of qualified stated interest, the excess bond premium will carry forward
to future accrual periods. In the case of floating rate notes acquired with
bond premium and treated as "variable rate debt instruments," the bond premium
and its allocation among the accrual periods will be determined by reference to
the "equivalent fixed rate debt instrument" to be constructed as of the date of
acquisition of such floating rate notes.
Election to Treat all Interest and Premium as Original Issue Discount
U.S. holders utilizing the accrual method of accounting may generally elect
to include all interest and discount (including stated interest, acquisition
discount, original issue discount, de minimis original issue discount, market
discount, de minimis market discount, and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium on a debt instrument) in income
by using the constant yield method applicable to original issue discount,
subject to certain limitations and exceptions.
Disposition or Repayment of a Note
U.S. holders of notes recognize gain or loss on the sale, redemption,
exchange or other disposition of a note. This gain or loss is measured by the
difference between the amount realized (except to the extent attributable to
accrued interest) and the U.S. holder's adjusted tax basis in the note. A U.S.
holder's adjusted tax basis for determining gain or loss on a sale or
disposition of a note generally will be such holder's cost increased by any
amounts included in income, other than qualified stated interest, and reduced
by any amortized premium and cash received other than qualified stated
interest. Gain or loss on the sale, exchange or redemption of a note generally
will be capital gain or loss (and will be long-term capital gain or loss if the
note was held for more than one year), except to the extent that gain
represents accrued market or acquisition discount not previously included in
the U.S. holder's income. Non-corporate taxpayers are subject to reduced
maximum rates on long-term capital gains and are generally subject to tax at
ordinary income rates on short-term capital gains. The deductibility of capital
losses is subject to certain limitations. Prospective investors should consult
their own tax advisors concerning these tax law provisions.
Foreign Currency Notes
Notes may be denominated in, or interest or principal on the notes may be
determined by reference to, a foreign currency or foreign currency unit (e.g.,
the ECU) ("foreign currency notes"). Original issue discount for any accrual
period on a foreign currency note is determined under special rules. The
application of these rules will be described in an applicable pricing
supplement.
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<PAGE>
U.S. Tax Considerations for Foreign Holders
Set forth below is a summary of certain U.S. federal income tax consequences
for non-U.S. holders of the notes.
Assuming certain certification requirements are satisfied (which generally
can be satisfied by providing Internal Revenue Service Form W-8 (or
substantially similar form), identifying the beneficial owner of the instrument
as a non-U.S. person and disclosing the non-U.S. holder's name and address),
under current U.S. federal income and estate tax laws:
(i) Payments of principal and interest (including original issue
discount) on a note to a non-U.S. holder will not be subject to U.S.
federal income tax or withholding tax, provided that, in the case of
interest and original issue discount, (a) the payments are not effectively
connected with a U.S. trade or business, (b) the holder does not actually
or constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (c) the holder is not a
controlled foreign corporation related to the Company through stock
ownership, and (d) the holder is not a bank receiving interest pursuant to
a loan agreement entered into in the ordinary course of its trade or
business;
(ii) A non-U.S. holder of a note will not be subject to U.S. federal
income tax on gain realized on the sale, exchange or redemption of a note
if (a) such gain is not effectively connected with a U.S. trade or
business, (b) in the case of a non-U.S. holder who is an individual, such
holder is not present in the United States for a total of 183 days or more
during the taxable year in which such gain is realized and (c) either (1)
such individual's "tax home" for United States federal income tax purposes
is in the United States, or (2) the gain is attributable to an office or
other fixed place of business maintained in the United States by such
individual; and
(iii) A note held by an individual who at the time of death is not a
citizen or resident of the United States (as determined for United States
estate tax purposes) will not be subject to U.S. federal estate tax as a
result of such individual's death, unless (a) the individual actually or
constructively owns 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (b) the interest received
on such note is effectively connected with the conduct by such holder of a
U.S. trade or business, or (c) such note provided for the payment of
certain contingent interest.
Backup Withholding and Information Reporting
Under current United States federal income tax law, a 31% backup withholding
tax and information reporting requirements apply to certain interest and
principal payments made to, and to the proceeds of sales before maturity by,
certain noncorporate United States holders. Backup withholding will apply only
if (i) such holders fail to supply their taxpayer identification number
("TIN"), (ii) the Company is notified by the Internal Revenue Service that such
United States holders furnished an incorrect TIN, (iii) the Company is notified
by the Internal Revenue Service that such United States holders have failed to
properly report payments of interest and dividends, or (iv) such United States
holders fail to certify, under penalty of perjury, that they have furnished a
correct TIN and have not been notified by the Internal Revenue Service that
they are subject to backup withholding for failure to report interest and
dividend payments.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments on notes made outside the United States
(other than payments made to an address in the United States or by transfer to
an account maintained by the holder with a bank in the United States) by the
Company or any paying agent thereof to a Non-United States holder of a note
S-21
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provided that neither the Company nor any such paying agent has actual
knowledge that the holder is a United States person for purposes of such backup
withholding tax and information reporting requirements. In addition, if such
principal or interest is paid to the beneficial owner of a note by a foreign
office of a foreign custodian, foreign nominee or other foreign agent of such
beneficial owner, or if a foreign office of a foreign "broker" (as defined in
applicable Treasury Regulations) pays the proceeds of the sale of a note to the
seller thereof, backup withholding and information reporting will not apply to
such payment (provided that such nominee, custodian, agent or broker derives
less than 50% of its gross income for certain periods from the conduct of a
trade or business in the United States and is not a controlled foreign
corporation). Principal and interest so paid by a foreign office of other
custodians, nominees or agents, or the payment by a foreign office of other
brokers of the proceeds of the sale of a note will not be subject to backup
withholding, but will be subject to information reporting unless the custodian,
nominee, agent or broker has documentary evidence in its records that the
beneficial owner is not a United States person for purposes of such backup
withholding and information reporting requirements and certain conditions are
met, or the beneficial owner otherwise establishes an exemption. Principal and
interest so paid by the United States office of a custodian, nominee or agent,
or the payment of the proceeds of sale of a note by the United States office of
a broker, is subject to both backup withholding and information reporting
unless the beneficial owner certifies its non-United States status under
penalties of perjury or otherwise establishes an exemption.
Treasury Regulations issued on October 6, 1997 (the "Withholding
Regulations") would modify certain of the rules discussed above generally with
respect to payments on the notes made after December 31, 1999. For payments
made after December 31, 1999, the Withholding Regulations provide that to the
extent a non-United States holder provides the appropriate certification as to
such holder's status as a foreign person, the backup withholding provisions and
information reporting provisions generally will not apply. A payor may rely on
a certification provided by a non-United States holder provided that such payor
does not have actual knowledge or a reason to know that any information or
certification stated in such certificate is unreliable.
S-22
<PAGE>
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Company and Goldman, Sachs & Co. and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated (the "Agents") have entered into a
distribution agreement with respect to the notes. Subject to certain
conditions, the Agents have agreed to use their reasonable efforts to solicit
purchases of the notes. The Company has the right to accept offers to purchase
notes and may reject any proposed purchase of the notes. The Agents may also
reject any offer to purchase notes. The Company will pay the Agents a
commission on any notes sold through the Agents. The commission will range from
0.125% to 0.750% of the principal amount of the notes, depending on the
maturity of the notes.
The Company may also sell notes to the Agents who will purchase the notes as
principals for their own accounts. Any such sale will be made at a discount
equal to the agent commissions set forth on the cover page hereof if no other
discount is agreed. Any notes the Agents purchase as principal may be resold at
the market price or at other prices determined by the Agents at the time of
resale. The Company may also sell notes directly on its own behalf. No
commissions will be paid on notes sold directly by the Company.
The Agents may resell any notes they purchase to other brokers or dealers at
a discount which may include all or part of the discount the Agents received
from the Company. The Agents will purchase the notes at a price equal to 100%
of the principal amount less a discount. Unless otherwise stated the discount
will equal the applicable commission on an agency sale of notes of the same
maturity. If all the notes are not sold at the initial offering price, the
Agents may change the offering price and the other selling terms.
The Agents, whether acting as agents or principals, may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933. The Company
has agreed to indemnify the several Agents against certain liabilities,
including liabilities under the Securities Act of 1933.
The Agents may sell to dealers who may resell to investors and the Agents
may pay all or part of the discount or commission they receive from the Company
to the dealers. Such dealers may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933.
The notes are a new issue of securities with no established trading market
and will not be listed on a securities exchange. No assurance can be given as
to the liquidity of the trading market for the notes.
In connection with the offering, the Agents may purchase and sell notes in
the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short
sales involve the sale by the Agents of a greater number of notes than they are
required to purchase in the offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of the notes while the offering is in progress.
The Agents also may impose a penalty bid. This occurs when a particular
agent repays to the Agents a portion of the discount received by it because the
representatives have repurchased notes sold by or for the account of such agent
in stabilizing or short covering transactions.
These activities may stabilize, maintain or otherwise affect the market
price of the notes. As a result, the price of the notes may be higher than the
price that otherwise might exist in the open market. If these activities are
commenced, they may be discontinued by the Agents at any time. These
transactions may be effected in the over-the-counter market or otherwise.
S-23
<PAGE>
The Company estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$800,000.
Unless otherwise indicated in the applicable pricing supplement, the
purchase price of the notes will be required to be paid in immediately
available funds in The City of New York.
Goldman, Sachs & Co. and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated may be customers of, engage in transactions with and
perform services for the Company in the ordinary course of business.
S-24
<PAGE>
Subject to Completion, dated January 15, 1999
PROSPECTUS
- ----------
Nationwide Health Properties, Inc.
Debt Securities
----------------
The Company may periodically issue up to $500,000,000 of its senior
unsecured debt securities. The terms of the debt securities and distribution
arrangements will be included in prospectus supplements and pricing
supplements.
The Debt Securities--
.will be in one or more series;
. will be offered in amounts, at prices and on terms to be agreed
upon by the Company and the purchasers;
. will be issued in amounts, with maturities, interest rates and
offering prices set forth in a prospectus supplement; and
. will be sold by the Company through agents or to or through
underwriters or dealers.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Prospectus. Any representation to the contrary is
a criminal offense.
----------------
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a prospectus supplement.
----------------
The date of this Prospectus is January , 1999.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The Company files with the Securities and Exchange Commission (the "SEC")
annual, quarterly and other reports, proxy statements and other information.
You may read and copy any document we file at the SEC's public reference rooms
at 450 Fifth Street, N.W., Washington, DC 20549 and in New York, New York and
Chicago, Illinois. For further information on the public reference rooms you
can call the SEC at 1-800-SEC-0330. Our SEC filings are also available at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005. In addition, the Company's SEC filings are available to the public
at the SEC's web site at: http://www.sec.gov.
The Company has filed with the SEC a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended. This prospectus and
the accompanying prospectus supplement do not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the SEC's rules. You may read or obtain copies of the complete
Registration Statement in the manner described above, including the SEC's web
site.
The SEC allows us to "incorporate by reference" the information that we file
with them, which means that we can disclose important information to you by
referring you to other documents filed with the SEC. The information
incorporated by reference is considered to be part of this prospectus, and
later information that we file with the SEC will automatically update and may
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended, until all of the
notes have been sold:
. Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998; and
. Current Reports on Form 8-K, filed with the Commission on April 30,
1998, October 8, 1998 and October 16, 1998.
You may request a copy of these filings, at no cost, by writing or calling
us at the following address:
Nationwide Health Properties, Inc.
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
Attention: Mark L. Desmond
Telephone number: (949) 718-4400
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
these debt securities in any state where the offer is not permitted. You should
not assume that the information in this prospectus or any supplement is
accurate as of any date other than the date on the front of those documents.
2
<PAGE>
THE COMPANY
Nationwide Health Properties, Inc., a Maryland corporation organized in
October 1985 (the "Company"), is a real estate investment trust ("REIT") which
invests primarily in health care related facilities and provides financing to
health care providers. As of September 30, 1998, the Company had investments in
337 facilities located in 33 states. The facilities include 198 skilled nursing
facilities, 104 assisted living facilities, 14 continuing care retirement
communities, 16 residential care facilities for the elderly, two rehabilitation
hospitals and three medical clinics. The facilities are operated by 60
different operators, including the following publicly traded companies:
Alternative Living Services, Inc., American Retirement Corporation, ARV
Assisted Living, Inc., Assisted Living Concepts, Inc., Beverly Enterprises,
Inc., Extendicare Health Services, Inc., Harborside Healthcare Corporation,
HEALTHSOUTH Corporation, Integrated Health Services, Inc., Lexington Healthcare
Group, Inc., Mariner Post-Acute Network, Inc., NewCare Health Corporation, Res-
Care, Inc., Sun Healthcare Group, Inc. and UNISON HealthCare Corporation. Of
the operators of the facilities, only Alternative Living Services, Inc. and
Beverly Enterprises, Inc. account for more than 10% of the Company's revenues.
They accounted for 12% and 15%, respectively, of the Company's total revenues
for the nine months ended September 30, 1998.
As of September 30, 1998, the Company had direct ownership of 154 skilled
nursing facilities, 96 assisted living facilities, nine continuing care
retirement communities, 16 residential care facilities for the elderly, two
rehabilitation hospitals and three medical clinics. All of the Company's owned
facilities are leased under "net" leases, which are accounted for as operating
leases.
The leases have initial terms ranging from 9 to 19 years, and the leases
generally have two or more multiple-year renewal options. The Company earns
fixed monthly minimum rents and may earn periodic additional rents. The
additional rent payments are generally computed as a percentage of facility net
patient revenues in excess of base amounts or as a percentage of the increase
in the consumer price index. Additional rents are generally calculated and
payable monthly or quarterly. Most leases contain provisions such that total
rent cannot decrease from one year to the next. Most leases contain cross
collateralization and cross default provisions tied to other leases with the
same lessee, as well as grouped lease renewals and grouped purchase options.
Obligations under the leases have corporate guarantees, and leases covering 176
facilities are backed by irrevocable letters of credit or security deposits
which cover one to 12 months of monthly minimum rents. Under the terms of the
leases, the lessee is responsible for all maintenance, repairs, taxes and
insurance on the leased properties.
As of September 30, 1998, the Company held 34 mortgage loans secured by 44
skilled nursing care facilities, eight assisted living facilities and five
continuing care retirement communities. As of September 30, 1998, the mortgage
loans had a net book value of approximately $208,094,000 with individual
outstanding balances ranging from approximately $571,000 to $21,500,000 and
maturities ranging from 1999 to 2031.
The Company anticipates providing lease or mortgage financing for health
care facilities to qualified operators and acquiring additional health care
related facilities, including skilled nursing facilities, assisted living
facilities, acute care hospitals and medical office buildings. Financing for
such future investments may be provided by borrowings under the Company's bank
line of credit, private placements or public offerings of debt or equity, and
the assumption of secured indebtedness.
The Company believes that it has operated in such a manner as to qualify for
taxation as a REIT under Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended, commencing with its taxable year ending December 31, 1985,
and the Company intends to continue to operate in such a manner. If the Company
qualifies for taxation as a REIT, it will generally not be subject to federal
corporate income taxes on its net income that is currently distributed to
stockholders. This
3
<PAGE>
treatment substantially eliminates the "double taxation" (e.g., at the
corporate and stockholder levels) that generally results from investment in
stock of a corporation. Among the requirements for taxation as a REIT, the
Company is required to distribute substantially all of its taxable income
(determined without regard to capital gains) each year. Failure to do so may
cause the Company to fail to qualify for taxation as a REIT.
The Company's principal executive offices are located at 610 Newport Center
Drive, Suite 1150, Newport Beach, California 92660, and its telephone number is
(949) 718-4400.
4
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SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information of the Company for
each of the three years in the period ended December 31, 1997 is derived from
the Company's 1997, 1996 and 1995 Annual Reports on Form 10-K. The selected
consolidated financial information for the periods ended September 30, 1998 and
September 30, 1997 is derived from the Company's Quarterly Reports on Form 10-Q
for the periods ended September 30, 1998 and 1997. The Company's consolidated
financial statements in the 1997 Annual Report on Form 10-K have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports incorporated by reference herein. The Company's consolidated financial
statements in the 1996 and 1995 Annual Reports on Form 10-K have been audited
by Arthur Andersen LLP, independent public accountants, but are not included or
incorporated by reference herein. The selected consolidated financial
information set forth below should be read in conjunction with the detailed
information, consolidated financial statements and related notes and applicable
"Management's Discussion and Analysis" included in the 1997 Annual Report on
Form 10-K and the Quarterly Report on Form 10-Q for the period ended September
30, 1998.
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
----------------------------- ----------------------
1997 1996 1995 1998 1997
---------- -------- -------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C> <C>
Revenues:
Minimum rent........... $ 79,587 $ 66,536 $ 54,504 $ 75,536 $ 56,623
Interest and other
income................ 22,454 17,104 14,759 17,009 15,986
Additional rent and
additional interest... 13,664 12,136 11,776 11,729 10,187
---------- -------- -------- ---------- ----------
115,705 95,776 81,039 104,274 82,796
Expenses:
Depreciation and non-
cash charges.......... 19,825 16,723 13,885 20,035 14,001
Interest and
amortization of
deferred financing
costs................. 28,899 20,797 14,628 26,745 20,639
General and
administrative........ 3,993 3,312 3,144 3,453 2,774
---------- -------- -------- ---------- ----------
52,717 40,832 31,657 50,233 37,414
---------- -------- -------- ---------- ----------
Income before gain on
sale of facilities...... 62,988 54,944 49,382 54,041 45,382
Gain on sale of
facilities.............. 829 -- 989 2,321 829
---------- -------- -------- ---------- ----------
Net income............... 63,817 54,944 50,371 56,362 46,211
Preferred stock
dividends............... (1,962) -- -- (5,758) (43)
---------- -------- -------- ---------- ----------
Net income available to
common stockholders..... $ 61,855 $ 54,944 $ 53,371 $ 50,604 $ 46,168
========== ======== ======== ========== ==========
Financial Position (at
end of period):
Total assets........... $1,077,394 $744,984 $670,111 $1,295,558 $1,053,330
Bank borrowings........ 19,600 32,300 93,900 30,400 --
Senior notes due 2000-
2038.................. 355,000 190,000 100,000 480,150 355,000
Convertible
debentures............ 64,512 64,920 65,000 57,456 64,534
Notes and bonds
payable............... 58,297 9,229 23,364 66,584 48,908
Stockholders' equity... 553,046 428,588 371,822 613,379 554,052
</TABLE>
5
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The Ratio of Earnings to Fixed Charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended December 31, September 30,
------------------------ -------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio............................... 7.63 5.52 4.44 3.64 3.03 3.22
</TABLE>
For current information on the Ratio of Earnings to Fixed Charges, please
see our most recent Form 10-K and 10-Q. See "Where You Can Find More
Information."
USE OF PROCEEDS
Unless otherwise specified in the prospectus supplement which accompanies
this prospectus, the net proceeds from the sale of the Debt Securities offered
from time to time hereby will be used for general corporate purposes, including
the repayment of short term bank lines of credit and investments in health care
related facilities. The Company uses its existing revolving bank credit
facility primarily to provide short term financing for the acquisitions of
health care related facilities. To the extent that the Company has amounts
outstanding under the credit facility at the time it issues Debt Securities, it
is currently required to use the proceeds of such issuance to repay amounts
outstanding under the credit facility.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued from time to time as a single series or in
two or more separate series. The following description of the terms of the Debt
Securities sets forth certain general terms and provisions of the Debt
Securities to which any prospectus supplement may relate. The particular terms
of the Debt Securities offered by any prospectus supplement (the "Offered Debt
Securities"), and the extent to which such general provisions may apply to the
Offered Debt Securities, will be described in a prospectus supplement relating
to such Offered Debt Securities.
The Debt Securities will be issued under an indenture, dated as of January
13, 1999, as such indenture may be amended from time to time (the "Indenture"),
between the Company and Chase Manhattan Bank and Trust Company, as trustee (the
"Trustee"). The terms of the Debt Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and holders of
the Debt Securities are referred to the Indenture and the Trust Indenture Act
for a statement thereof. The following summary of certain provisions of the
Debt Securities and of the Indenture does not purport to be complete and is
qualified in its entirety by reference to the Indenture, a copy of which has
been filed as an exhibit to the Registration Statement of which this prospectus
is a part. Capitalized terms used but not defined herein have the meanings
given to them in the Indenture.
General
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder, and Debt Securities may be issued
thereunder from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by the
Company for each series. As of the date of this prospectus, the Company has
authorized the issuance under the Indenture of up to $500,000,000 aggregate
initial offering price of Debt Securities, of which none has been issued.
6
<PAGE>
The Debt Securities will be unsecured general obligations of the Company and
will rank pari passu with all other unsecured and unsubordinated indebtedness
of the Company from time to time outstanding.
The applicable prospectus supplement or prospectus supplements will describe
the terms of the Offered Debt Securities, including: (i) the aggregate
principal amount and denominations of such Debt Securities; (ii) the date on
which such Debt Securities will mature; (iii) the date or dates on which the
principal of such Debt Securities is payable, if other than on maturity, or the
method of determination thereof; (iv) the rate or rates per annum (which may be
fixed or variable), or formula for determining such rate or rates, at which
such Debt Securities will bear interest, if any; (v) the dates on which such
interest, if any, will be payable; (vi) the Place of Payment or transfer with
respect to such Debt Securities; (vii) the provisions for redemption or
repayment of such Debt Securities, if any, including the redemption and/or
repayment price or prices and any remarketing arrangements relating thereto;
(viii) the sinking fund requirements or similar provisions, if any, with
respect to such Debt Securities; (ix) whether such Debt Securities are
denominated or provide for payment in United States dollars or a foreign
currency or units of two or more currencies; (x) the form (registered or bearer
or both) in which such Debt Securities may be issued and the terms applicable
to the exchange of one form for another and any restrictions on the offer, sale
and delivery of Debt Securities in either form; (xi) if the Company will pay
additional amounts ("Additional Amounts") in respect of Debt Securities held by
a person who is not a U.S. person in respect of specified taxes, assessments or
other governmental charges, under what circumstances the Company will pay such
Additional Amounts and whether the Company has the option to redeem the
affected Debt Securities rather than pay such Additional Amounts; (xii) whether
such Debt Securities will be issued in whole or in part in the form of one or
more global securities and, in such case, the Depositary for such global
securities; (xiii) the title of such Debt Securities and the series of which
such Debt Securities shall be a part; and (xiv) any other terms of such Debt
Securities. Reference is made to the prospectus supplement for the terms of the
Debt Securities being offered thereby. The variable terms of the Debt
Securities are subject to change from time to time, but no such change will
affect any Debt Security already issued or as to which an offer to purchase has
been accepted by the Company.
The provisions of the Indenture described above provide the Company with the
ability, in addition to the ability to issue Debt Securities with terms
different from those of Debt Securities previously issued, to "reopen" a
previous issue or a series of Debt Securities and issue additional Debt
Securities of such issue or series.
Unless otherwise indicated in a pricing supplement, the covenants contained
in the Indenture would not necessarily afford holders of Debt Securities
protection in the event of a highly leveraged or other transaction involving
the Company that may adversely affect holders.
Payment and Paying Agents
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal of and premium and interest, if any, on Debt Securities will be
made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment
of any interest may be made (i) by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer to an account maintained by the person entitled thereto as
specified in the Security Register. Unless otherwise indicated in an applicable
prospectus supplement, payment of any installment of interest on Debt
Securities will be made to the person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
interest.
7
<PAGE>
Unless otherwise indicated in an applicable prospectus supplement, the
Trustee, acting through its Corporate Trust Office, will be designated as the
Company's sole Paying Agent for payments with respect to Debt Securities of
such series. 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 the Company will be required
to maintain a Paying Agent in each Place of Payment for such series. All monies
paid by the Company to a Paying Agent for the payment of principal of or
premium or interest, if any, on any Debt Security which remain 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, and the holder of such Debt
Security or any 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 in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable prospectus supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole by the Depositary for such Debt Security 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 of such Depositary or a nominee of such successor.
If any Debt Securities of a series are issuable in global form, the applicable
prospectus supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such global Debt Security may exchange
such interests for definitive Debt Securities of such series and of like tenor
and principal amount in any authorized form and denomination, the manner of
payment of principal of, premium and interest, if any, on any such global Debt
Security and the material terms of the depositary arrangement with respect to
any such global Debt Security.
Certain Covenants
The Debt Securities will not be secured by mortgage, pledge or other lien.
The Company will covenant in the Indenture not to pledge or otherwise subject
to any lien any property or assets of the Company unless the Debt Securities
are secured by such pledge or lien equally and ratably with all other
obligations secured thereby so long as such obligations shall be so secured;
provided, however, that such covenant will not apply to liens securing
obligations which do not in the aggregate at any one time outstanding exceed
10% of Consolidated Net Tangible Assets (as defined below) of the Company and
its consolidated subsidiaries and will not apply to:
(1) Any lien or charge on any property, tangible or intangible, real or
personal, existing at the time of acquisition or construction of such
property (including acquisition through merger or consolidation) or given
to secure the payment of all or any part of the purchase or construction
price thereof or to secure any indebtedness incurred prior to, at the time
of, or within one year after, the acquisition or completion of construction
thereof for the purpose of financing all or any part of the purchase or
construction price thereof;
(2) Any liens securing the performance of any contract or undertaking of
the Company not directly or indirectly in connection with the borrowing of
money, obtaining of advances or credit or the securing of debts, if made
and continuing in the ordinary course of business;
(3) Any lien to secure nonrecourse obligations in connection with the
Company's engaging in leveraged or single investor lease transactions;
(4) Any lien in favor of the United States or any state thereof or the
District of Columbia, or any agency, department or other instrumentality
thereof, to secure progress, advance, or other payments pursuant to any
contract or provision of any statute;
8
<PAGE>
(5) Mechanics', materialmen's, carriers', or other like liens arising in
the ordinary course of business (including construction of facilities) in
respect of obligations which are not due or which are being contested in
good faith;
(6) Any lien arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or any body created or
approved by law or governmental regulations, which is required by law or
governmental regulation as a condition to the transaction of any business,
or the exercise of any privilege, franchise or license;
(7) Any liens for taxes, assessments or governmental charges or levies
not yet delinquent, or liens for taxes, assessments or governmental charges
or levies already delinquent but the validity of which is being contested
in good faith;
(8) Liens (including judgment liens) arising in connection with legal
proceedings so long as such proceedings are being contested in good faith
and in the case of judgment liens, execution thereof is stayed;
(9) Liens relating to secured indebtedness of the Company outstanding on
December 31, 1998; and
(10) Any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any lien referred to
in the foregoing clauses (1) to (9) inclusive; provided, however, that the
amount of any and all obligations and indebtedness secured thereby shall
not exceed the amount thereof so secured immediately prior to the time of
such extension, renewal or replacement and that such extension, renewal or
replacement shall be limited to all or a part of the property which secured
the charge or lien so extended, renewed or replaced (plus improvements on
such property).
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) less (i) all
current liabilities and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expenses and other like intangibles of the
Company and its consolidated subsidiaries, all as set forth on the most recent
balance sheet of the Company and its consolidated subsidiaries prepared in
accordance with generally accepted accounting principles.
The Company also covenants in the Indenture that it will not create, assume,
incur, or otherwise become liable in respect of, any
(a) Senior Debt (as defined below) unless the aggregate outstanding
principal amount of Senior Debt of the Company will not, at the time of
such creation, assumption or incurrence and after giving effect thereto and
to any concurrent transactions, exceed the greater of (i) 150% of Capital
Base (as defined below), or (ii) 225% of Tangible Net Worth (as defined
below); and
(b) Non-Recourse Debt (as defined below) unless the aggregate
outstanding principal amount of Senior Debt and Non-Recourse Debt of the
Company will not, at the time of such creation, assumption or incurrence
and after giving effect thereto and to any concurrent transactions, exceed
225% of Capital Base.
For the purposes of this limitation as to borrowing money, "Senior Debt"
means all Debt other than Non-Recourse Debt and Subordinated Debt; "Debt," with
respect to any person, means (i) its indebtedness, secured or unsecured, for
borrowed money; (ii) Liabilities secured by any existing lien on property owned
by such person; (iii) Capital Lease Obligations, and the present value of all
payments due under any arrangement for retention of title (discounted at a rate
per annum equal to the average interest borne by all outstanding Debt
Securities determined on a weighted average basis and compounded semi-annually)
if such arrangement is in substance an installment purchase or an arrangement
for the retention of title for security purposes; and (iv) guarantees of
obligations of
9
<PAGE>
the character specified in the foregoing clauses (i), (ii) and (iii), to the
full extent of the liability of the guarantor (discounted to the present value,
as provided in the foregoing clause (iii), in the case of guarantees of title
retention arrangements); "Capital Lease" means at any time any lease of
property, real or personal, which, in accordance with generally accepted
accounting principles, would at such time be required to be capitalized on a
balance sheet of the lessee; "Capital Lease Obligation" means at any time the
amount of the liability in respect of a Capital Lease which, in accordance with
generally accepted accounting principles, would at such time be required to be
capitalized on a balance sheet of the lessee; "Non-Recourse Debt" with respect
to any person, means any Debt secured by, and only by, property on or with
respect to which such Debt is incurred where the rights and remedies of the
holder of such Debt in the event of default do not extend to assets other than
the property constituting security therefor; "Subordinated Debt" means
unsecured Debt of the Company which is issued or assumed pursuant to, or
evidenced by, an indenture or other instrument which contains provisions for
the subordination of such Debt (to which appropriate reference shall be made in
the instruments evidencing such Debt if not contained therein) to the Debt
Securities (and, at the option of the Company, if so provided, to other Debt of
the Company, either generally or as specifically designated); "Capital Base"
means, at any date, the sum of Tangible Net Worth and Subordinated Debt;
"Tangible Net Worth" means, at any date, the net book value (after deducting
related depreciation, obsolescence, amortization, valuation and other proper
reserves) of the Tangible Assets of the Company at such date minus the amount
of its Liabilities at such date; "Tangible Assets" means all assets of the
Company (including assets held subject to Capital Leases, conditional sale
agreements or other arrangements pursuant to which title to property has been
retained by or vested in some other Person for security purposes) except: (i)
deferred assets, other than prepaid insurance, prepaid taxes and deposits; (ii)
patents, copyrights, trademarks, trade names, franchises, goodwill,
experimental expense and other similar intangibles; and (iii) unamortized debt
discount and expense; and "Liabilities" means, at any date, the items shown as
liabilities on the balance sheet of the Company, except any items of deferred
income, including capital gains.
Successor Corporation
The Indenture provides that the Company may consolidate with, or transfer or
lease all or substantially all of its properties and assets to, or consolidate
or merge with or into, any other person provided, that in any such case: (i)
the successor person shall be a corporation, limited liability company,
partnership or trust organized and existing under the laws of the United States
or any state thereof or the District of Columbia and shall expressly assume, by
a supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the Company under the
Debt Securities and the Indenture; and (ii) the Company or such successor
person, as the case may be, shall not, immediately after such transaction, be
in default in the performance of any of such obligations. Subject to certain
limitations in the Indenture, the Trustee will receive from the Company an
officers' certificate and an opinion of counsel stating that any such
consolidation, merger, sale, lease or conveyance, and any such assumption,
complies with the provisions of the Indenture.
Supplemental Indentures
Supplemental indentures may be made by the Company and the Trustee with the
consent of the holders of 66 2/3% in principal amount of any series of
outstanding Debt Securities, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of modifying in any manner the rights of the holders of each such series
affected by such modification or amendment, provided that no supplemental
indenture may, among other things, reduce the principal amount of or interest
on any Debt Securities, change the maturity date of the principal, the interest
payment dates or other terms of payment or reduce the percentage in principal
amount of outstanding Debt Securities of any series the consent of whose
holders is necessary to
10
<PAGE>
modify or alter the Indenture, without the consent of each holder of Debt
Securities affected thereby. Under certain circumstances, supplemental
indentures may also be made without the consent of the holders.
Events of Default
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events and such other events as
may be established for the Debt Securities of a particular series: (i) default
in payment of any interest or Additional Amount on the Debt Securities of such
series and continuance of such default for a period of 30 days; (ii) default in
payment of principal or premium, if any, on the Debt Securities of such series
at their maturity; (iii) default in the deposit of any sinking fund payment
with respect to such series when, as and if due; (iv) default in the
performance, or breach, of any covenant or warranty, of the Company in the
Indenture or any Debt Security of that series (other than a covenant or
warranty in the Indenture solely for the benefit of a series of Debt Securities
other than such series) continued for 60 days after appropriate notice; (v)
certain events of bankruptcy, insolvency, reorganization or other similar
occurrences; and (vi) certain other events of default, if any, relating to a
particular series of Debt Securities. No Event of Default with respect to a
particular series of Debt Securities issued under the Indenture necessarily
constitutes an Event of Default with respect to any other series of Debt
Securities issued thereunder. If an Event of Default occurs and is continuing,
the Trustee or the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of each series affected thereby may declare the
Debt Securities of such series to be due and payable. Any past default with
respect to a particular series of Debt Securities may be waived by the holders
of at least a majority in aggregate principal amount of the outstanding Debt
Securities of such series, except in a case of failure to pay principal of, or
premium, if any, or interest on or Additional Amounts with respect to such Debt
Securities for which payment had not been subsequently made or a default 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
such series. The Company will be required to file with the Trustee annually an
Officers' Certificate as to the compliance with all conditions and covenants
under the Indenture. The Trustee may withhold notice to holders of any series
of Debt Securities of any default with respect to such series (except in
payment of principal, premium, if any, interest or Additional Amounts) if it in
good faith determines that it is in the interest of such holders to do so.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such
holders have offered to the Trustee reasonable indemnity or security against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction. Subject to provisions in the Indenture for the
indemnification of the Trustee and to certain other limitations, the holders of
a majority in principal amount of the outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Debt Securities of such
series.
Satisfaction and Discharge of Indenture
The Indenture (except for certain specified surviving obligations including,
among other things, the Company's obligation to pay the principal of, and
premium, if any, and interest on the Debt Securities) will be discharged with
respect to the Debt Securities of any series which are due and payable or will
become due and payable at maturity or redemption within one year upon the
satisfaction of certain conditions, including the payment in full of the
principal of, and premium, if any,
11
<PAGE>
and interest on all of the Debt Securities of such series or the deposit with
the Trustee of an amount in cash or United States government obligations
sufficient for such payment or redemption, in accordance with the Indenture.
Defeasance
The Company may terminate certain of its obligations under the Indenture
with respect to the Debt Securities of any series, including its obligations to
comply with the restrictive covenants set forth in the Indenture (see "Certain
Covenants") with respect to the Debt Securities of such series, on the terms
and subject to the conditions contained in the Indenture, by depositing in
trust with the Trustee cash or United States government obligations sufficient
to pay the principal of, and premium, if any, and interest on the Debt
Securities of such series to their maturity in accordance with the terms of the
Indenture and the Debt Securities of such series. In such event, the Trustee
will receive from the Company an opinion of counsel stating that such deposit
and termination will not have any federal income tax consequences to the
holders.
Regarding the Trustee
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee is permitted to engage in
other transactions with the Company; provided, however, that if the Trustee
acquires any conflicting interest it must eliminate such conflict or resign.
The Indenture provides that, in case an Event of Default has occurred and is
continuing, the Trustee is required to use the degree of care and skill of a
prudent person in the conduct of his or her own affairs in the exercise of its
rights and powers.
Governing Law
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities through underwriters or agents or
directly to purchasers. A prospectus supplement will set forth the names of
such underwriters or agents, if any, and the specific designation, aggregate
principal amount, rate and time of payment and interest, if any, redemption
and/or repayment, if any, and other terms, and any listing on a securities
exchange of the Debt Securities in respect of which this prospectus is
delivered.
The Debt Securities may be sold to underwriters for their own account and
may be resold to the public 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. A prospectus supplement will set
forth any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
The Debt Securities may be sold directly by the Company, or through agents
designated by the Company from time to time. A prospectus supplement will set
forth any commission payable by the Company to such agent. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a
reasonable efforts basis for the period of its appointment.
12
<PAGE>
The net proceeds to the Company from the sale of the Debt Securities will be
the purchase price of the Debt Securities less any such discounts or
commissions and the other attributable expenses of issuance and distribution.
The Company will agree to indemnify underwriters and agents against certain
civil liabilities, including liabilities under the Securities Act of 1933, or
contribute to payments underwriters or agents may be required to make in
respect thereof.
LEGAL MATTERS
O'Melveny & Myers LLP will issue an opinion about the validity of the Debt
Securities. Unless otherwise specified in an applicable prospectus supplement,
Brown & Wood LLP will act as counsel for the underwriters or agents, if any.
Paul C. Pringle, a partner at Brown & Wood LLP, owns 5,000 shares of Common
Stock of the Company.
EXPERTS
Arthur Andersen LLP, independent public accountants, audited the Company's
financial statements and schedules incorporated by reference in this prospectus
and elsewhere in the registration statement. These documents are incorporated
by reference herein in reliance upon the authority of Arthur Andersen LLP as
experts in accounting and auditing in giving the audit reports.
13
<PAGE>
===============================================================================
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You
must not rely on any unauthorized information or representations. This
prospectus is an offer to sell only the notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
---------------
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Company................................................................ S-2
Recent Developments........................................................ S-3
Pricing Supplement......................................................... S-3
Use of Proceeds............................................................ S-3
Ratio of Earnings to Fixed Charges......................................... S-3
Description of the Notes................................................... S-4
United States Taxation..................................................... S-16
Supplemental Plan of Distribution.......................................... S-23
Prospectus
Where You Can Find More Information........................................ 2
The Company................................................................ 3
Selected Consolidated Financial Information................................ 5
Ratio of Earnings to Fixed Charges......................................... 6
Use of Proceeds............................................................ 6
Description of Debt Securities............................................. 6
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
Experts.................................................................... 13
</TABLE>
================================================================================
================================================================================
$500,000,000
[LOGO OF NATIONWIDE HEALTH PROPERTIES, INC.]
Medium-Term Notes, Series D
Due 9 Months or More from Date of Issue
---------------
PROSPECTUS SUPPLEMENT
---------------
Goldman, Sachs & Co.
Merrill Lynch & Co.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses of this offering are estimated as follows:
<TABLE>
<S> <C>
SEC Registration Fee............................................ $139,000
Blue Sky fees and expenses...................................... 15,000
Printing and engraving expenses................................. 25,000
Legal fees and expenses......................................... 50,000
Accounting fees and expenses.................................... 25,000
Trustee fees.................................................... 35,000
Rating agency fees.............................................. 500,000
Miscellaneous................................................... 11,000
--------
Total......................................................... $800,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Articles of Incorporation of the Company provide for indemnification of
directors and officers to the full extent permitted by the laws of the State of
Maryland.
Section 2-418 of the Maryland General Corporation Law generally permits
indemnification of any director or officer made a party to any proceedings by
reason of service as a director or officer unless it is established that (i)
the act or omission of such person was material to the matter giving rise to
the proceeding and was committed in bad faith or was the result of active and
deliberate dishonesty; or (ii) such person actually received an improper
personal benefit in money, property or services; or (iii) in the case of any
criminal proceeding, such person had reasonable cause to believe that the act
or omission was unlawful. The indemnity may include judgments, penalties,
fines, settlements and reasonable expenses actually incurred by the director or
officer in connection with the proceeding; provided, however, that if the
proceeding is one by, or in the right of the corporation, indemnification is
not permitted with respect to any proceeding in which the director or officer
had been adjudged to be liable to the corporation. The termination of any
proceeding by conviction, upon a plea of nolo contendere or its equivalent or
upon an entry of an order of probation prior to judgment creates a rebuttable
presumption that the director or officer did not meet the requisite standard of
conduct required for permitted indemnification. The termination of any
proceeding by judgment, order or settlement, however, does not create a
presumption that the director or officer failed to meet the requisite standard
of conduct for permitted indemnification.
The Company has entered into indemnity agreements with the officers and
directors of the Company that provide that the Company will pay on behalf of
the indemnified party any amount which the indemnified party is or becomes
legally obligated to pay because of any act or omission or neglect or breach of
duty, including any actual or alleged error or misstatement or misleading
statement, which the indemnified party commits or suffers while acting in the
capacity as an officer or director of the Company.
Since November 1986, the Company has had in force directors' and officers'
liability and Company reimbursement insurance covering liability for error,
misstatement, misleading statement, act or omission, and neglect or breach of
duty claimed against them solely by reason of their being directors or officers
of the Company.
II-1
<PAGE>
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
1.1 Distribution Agreement entered into between the Company and designated
agents (to be incorporated by reference from a Current Report on Form
8-K)
4.1 Form of Indenture to be entered into between the Company and The Bank
of New York.
5.1 Opinion of O'Melveny & Myers LLP.
5.2 Opinion of O'Melveny & Myers LLP re tax matters.
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of O'Melveny & Myers LLP (included in Exhibit 5.1).
24.1 Power of Attorney (contained on page II-4).
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Chase Manhattan Bank and Trust Company.
</TABLE>
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act, unless the information required to be included in such
post-effective amendment is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
and incorporated herein by reference;
(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, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act and incorporated herein by reference.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
II-2
<PAGE>
(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.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Securities Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Newport Beach, State of California, on the 15th of
January, 1999.
NATIONWIDE HEALTH PROPERTIES, INC.
/s/ R. Bruce Andrews
By: _________________________________
R. Bruce Andrews
President and Chief Executive
Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Nationwide Health Properties,
Inc., do hereby constitute and appoint R. Bruce Andrews and Mark L. Desmond, or
either of them, our true and lawful attorneys and agents, to do any and all
acts and things in our name and behalf in our capacities as directors and
officers and to execute any and all instruments for us and in our names in the
capacities indicated below, which said attorneys and agents, or either of them,
may deem necessary or advisable to enable said corporation to comply with the
Securities Act of 1933, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement, including specifically, but without limitation, power
and authority to sign for us or any of us in our names and in the capacities
indicated below, any and all amendments (including post-effective amendments)
to this Registration Statement, or any related registration statement that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, as amended; and we do hereby ratify and confirm all that the said
attorneys and agents, or either of them, shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Charles D. Miller Chairman and Director January 15, 1999
___________________________
Charles D. Miller
/s/ R. Bruce Andrews President, Chief Executive January 15, 1999
___________________________ Officer and Director
R. Bruce Andrews (principal executive
officer)
/s/ Mark L. Desmond Senior Vice President and January 15, 1999
___________________________ Chief Financial Officer
Mark L. Desmond (principal financial and
accounting officer)
/s/ John C. Argue Director January 15, 1999
___________________________
John C. Argue
/s/ David R. Banks Director January 15, 1999
___________________________
David R. Banks
/s/ Sam A. Brooks, Jr. Director January 15, 1999
___________________________
Sam A. Brooks, Jr.
/s/ Jack D. Samuelson Director January 15, 1999
___________________________
Jack D. Samuelson
</TABLE>
II-4
<PAGE>
EXHIBIT 4.1
NATIONWIDE HEALTH PROPERTIES, INC.,
Issuer
TO
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
Trustee
______________
INDENTURE
______________
Dated as of January 13, 1999
<PAGE>
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated January 13, 19991
<TABLE>
<CAPTION>
Section of Act Indenture Section
<S> <C>
310 (a)(1) ...................................................................... 609
(a)(2) ...................................................................... 609
(a)(3) ...................................................................... Not Applicable
(a)(4) ...................................................................... Not Applicable
(a)(5) ...................................................................... 609
(b) ......................................................................... 608
(b)(1)....................................................................... 608
(b)(9)....................................................................... 608
311 (a) ......................................................................... 613
(b) ......................................................................... 613
(b)(2) ...................................................................... 703(2)
312 (a) ......................................................................... 701
(b) ......................................................................... 702
(c) ......................................................................... 702
313 (a) ......................................................................... 703(1)
(b) ......................................................................... 703(2)
(c) ......................................................................... 703(1), 703(3)
(d) ......................................................................... 703(3), 703(4)
314 (a) ......................................................................... 704
(b) ......................................................................... Not Applicable
(c)(1) ...................................................................... 102
(c)(2) ...................................................................... 102
(c)(3) ...................................................................... Not Applicable
(d) ......................................................................... Not applicable
(e) ......................................................................... 102
315 (a) ......................................................................... 601(1)
(b) ......................................................................... 602
(c) ......................................................................... 601(2)
(d) ......................................................................... 601(3)
(d)(1) ...................................................................... 601(3)(a)
(d)(2) ...................................................................... 601(3)(b)
(d)(3) ...................................................................... 601(3)(c)
(e) ......................................................................... 514
316 (a)(1)(A) ................................................................... 512
(a)(1)(B) ................................................................... 513
(a)(2) ...................................................................... Not Applicable
(b) ......................................................................... 508
(c) ......................................................................... Not Applicable
317 (a)(1) ...................................................................... 503
(a)(2) ...................................................................... 504
(b) ......................................................................... 1003
318 (a) ......................................................................... 108
</TABLE>
_____________
*NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS**
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS OF THE COMPANY................................................................................... 1
ARTICLE ONE............................................................................................... 1
SECTION 101. Definitions................................................................................. 1
Act.............................................................................................. 2
Additional Amounts............................................................................... 2
Affiliate........................................................................................ 2
Authenticating Agent............................................................................. 2
Authorized Newspaper............................................................................. 2
Bearer Security.................................................................................. 3
Board of Directors............................................................................... 3
Board Resolution................................................................................. 3
Business Day..................................................................................... 3
Capital Base..................................................................................... 3
Capital Lease.................................................................................... 3
Capital Lease Obligation......................................................................... 3
Capital Stock.................................................................................... 3
Commission....................................................................................... 3
Company.......................................................................................... 3
Company Request" and "Company Order.............................................................. 4
Consolidated Net Tangible Assets................................................................. 4
Corporate Trust Office........................................................................... 4
corporation...................................................................................... 4
Coupon........................................................................................... 4
covenant defeasance.............................................................................. 4
Currency" or "Money.............................................................................. 4
Debt............................................................................................. 4
Defaulted Interest............................................................................... 5
defeasance....................................................................................... 5
Depositary....................................................................................... 5
Dollars.......................................................................................... 5
Event of Default................................................................................. 5
Exchange Act..................................................................................... 5
Global Security.................................................................................. 5
Holder........................................................................................... 5
Indenture........................................................................................ 5
interest......................................................................................... 5
Interest Payment Date............................................................................ 6
Legal Holiday.................................................................................... 6
Liabilities...................................................................................... 6
Lien............................................................................................. 6
Maturity......................................................................................... 6
Non-Recourse Debt................................................................................ 6
Office or Agency................................................................................. 6
Officers' Certificate............................................................................ 6
Opinion of Counsel............................................................................... 7
Original Issue Discount Security................................................................. 7
</TABLE>
_________________________
**NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
<TABLE>
<S> <C>
Outstanding....................................................................................... 7
Paying Agent...................................................................................... 8
Person............................................................................................ 8
Place of Payment.................................................................................. 8
Predecessor Security.............................................................................. 8
Property.......................................................................................... 8
Redemption Date................................................................................... 8
Redemption Price.................................................................................. 9
Registered Security............................................................................... 9
Regular Record Date............................................................................... 9
Responsible Officer............................................................................... 9
Securities........................................................................................ 9
Security Register" and "Security Registrar........................................................ 9
Senior Debt....................................................................................... 9
Special Record Date............................................................................... 9
Stated Maturity................................................................................... 9
Subordinated Debt................................................................................. 9
Subsidiary........................................................................................ 10
Tangible Assets................................................................................... 10
Tangible Net Worth................................................................................ 10
Trustee........................................................................................... 10
Trust Indenture Act............................................................................... 10
United States Alien............................................................................... 10
U.S. Government Obligations....................................................................... 10
Vice President.................................................................................... 10
Voting Stock...................................................................................... 11
SECTION 102. Compliance Certificates and Opinions......................................................... 11
SECTION 103. Form of Documents Delivered to Trustee....................................................... 11
SECTION 104. Acts of Holders.............................................................................. 12
SECTION 105. Notices, Etc., to Trustee and Company........................................................ 14
SECTION 106. Notice to Holders; Waiver.................................................................... 14
SECTION 107. Language of Notices, etc..................................................................... 15
SECTION 108. Conflict with Trust Indenture Act............................................................ 15
SECTION 109. Effect of Headings and Table of Contents..................................................... 16
SECTION 110. Successors and Assigns....................................................................... 16
SECTION 111. Separability Clause.......................................................................... 16
SECTION 112. Benefits of Indenture........................................................................ 16
SECTION 113. Governing Law................................................................................ 16
SECTION 114. Legal Holidays............................................................................... 16
ARTICLE TWO................................................................................................ 17
SECTION 201. Forms Generally.............................................................................. 17
SECTION 202. Form of Trustee's Certificate of Authentication.............................................. 18
SECTION 203. Provisions in Global Security................................................................ 18
ARTICLE THREE.............................................................................................. 19
SECTION 301. Amount Unlimited; Issuable in Series......................................................... 19
SECTION 302. Denominations................................................................................ 22
SECTION 303. Execution, Authentication, Delivery and Dating............................................... 23
SECTION 304. Temporary Securities......................................................................... 25
SECTION 305. Registration, Registration of Transfer and Exchange.......................................... 26
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............................................. 30
SECTION 307. Payment of Interest; Interest Rights Preserved............................................... 31
SECTION 308. Persons Deemed Owners........................................................................ 32
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 309. Cancellation................................................................................. 33
SECTION 310. Computation of Interest...................................................................... 33
ARTICLE FOUR............................................................................................... 34
SECTION 401. Satisfaction and Discharge of Indenture...................................................... 34
SECTION 402. Application of Trust Money................................................................... 35
ARTICLE FIVE............................................................................................... 36
SECTION 501. Events of Default............................................................................ 36
SECTION 502. Acceleration of Maturity; Rescission and Annulment........................................... 37
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.............................. 38
SECTION 504. Trustee May File Proofs of Claim............................................................. 39
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons....................... 40
SECTION 506. Application of Money Collected............................................................... 40
SECTION 507. Limitation on Suits.......................................................................... 41
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium, Interest and
Additional Amounts........................................................................... 41
SECTION 509. Restoration of Rights and Remedies........................................................... 42
SECTION 510. Rights and Remedies Cumulative............................................................... 42
SECTION 511. Delay or Omission Not Waiver................................................................. 42
SECTION 512. Control by Holders........................................................................... 42
SECTION 513. Waiver of Past Defaults...................................................................... 43
SECTION 514. Undertaking for Costs........................................................................ 44
ARTICLE SIX................................................................................................ 44
SECTION 601. Certain Duties and Responsibilities.......................................................... 44
SECTION 602. Notice of Defaults........................................................................... 45
SECTION 603. Certain Rights of Trustee.................................................................... 46
SECTION 604. Not Responsible for Recitals or Issuance of Securities....................................... 47
SECTION 605. May Hold Securities.......................................................................... 48
SECTION 606. Money Held in Trust.......................................................................... 48
SECTION 607. Compensation and Reimbursement............................................................... 48
SECTION 608. Disqualification; Conflicting Interests...................................................... 49
SECTION 609. Corporate Trustee Required; Eligibility...................................................... 49
SECTION 610. Resignation and Removal; Appointment of Successor............................................ 49
SECTION 611. Acceptance of Appointment by Successor....................................................... 51
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.................................. 52
SECTION 613. Preferential Collection of Claims Against Company............................................ 52
SECTION 614. Appointment of Authenticating Agent.......................................................... 53
SECTION 615. Other Capacities............................................................................. 54
ARTICLE SEVEN.............................................................................................. 55
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.................................... 55
SECTION 702. Preservation of Information; Communications to Holders....................................... 55
SECTION 703. Reports by Trustee........................................................................... 56
SECTION 704. Reports by Company........................................................................... 56
ARTICLE EIGHT.............................................................................................. 57
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms......................................... 57
SECTION 802. Successor Corporation Substituted............................................................ 58
SECTION 803. Officers' Certificate and Opinion of Counsel................................................. 58
ARTICLE NINE............................................................................................... 58
SECTION 901. Supplemental Indentures Without Consent of Holders........................................... 58
SECTION 902. Supplemental Indentures with Consent of Holders.............................................. 60
SECTION 903. Execution of Supplemental Indentures......................................................... 62
SECTION 904. Effect of Supplemental Indentures............................................................ 62
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 905. Conformity with Trust Indenture Act.......................................................... 62
SECTION 906. Reference in Securities to Supplemental Indentures........................................... 62
ARTICLE TEN................................................................................................ 63
SECTION 1001. Payment of Principal, Premium and Interest.................................................. 63
SECTION 1002. Maintenance of Office or Agency............................................................. 63
SECTION 1003. Money for Securities Payments to Be Held in Trust........................................... 64
SECTION 1004. Additional Amounts.......................................................................... 66
SECTION 1005. Corporate Existence......................................................................... 67
SECTION 1006. Payment of Taxes and Other Claims........................................................... 67
SECTION 1007. Limitation on Liens......................................................................... 67
SECTION 1008. Statement by Officers as to Default......................................................... 68
SECTION 1009. Limitations on Incurrence of Obligations for Borrowed Money................................. 69
SECTION 1010. Waiver of Certain Covenants................................................................. 69
ARTICLE ELEVEN............................................................................................. 70
SECTION 1101. Applicability of Article.................................................................... 70
SECTION 1102. Election to Redeem; Notice to Trustee....................................................... 70
SECTION 1103. Selection by Trustee of Securities to Be Redeemed........................................... 70
SECTION 1104. Notice of Redemption........................................................................ 71
SECTION 1105. Deposit of Redemption Price................................................................. 72
SECTION 1106. Securities Payable on Redemption Date....................................................... 73
SECTION 1107. Securities Redeemed in Part................................................................. 74
ARTICLE TWELVE............................................................................................. 74
SECTION 1201. Applicability of Article.................................................................... 74
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities....................................... 74
SECTION 1203. Redemption of Securities for Sinking Fund................................................... 75
ARTICLE THIRTEEN........................................................................................... 75
SECTION 1301. Applicability of Article; Company's Option to Effect Defeasance or Covenant Defeasance...... 75
SECTION 1302. Defeasance and Discharge.................................................................... 76
SECTION 1303. Covenant Defeasance......................................................................... 76
SECTION 1304. Conditions to Defeasance or Covenant Defeasance............................................. 77
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous
Provisions............................................................................................ 79
ARTICLE FOURTEEN........................................................................................... 80
SECTION 1401. Applicability of Article.................................................................... 80
ARTICLE FIFTEEN............................................................................................ 80
SECTION 1501. Purposes for Which Meetings May Be Called................................................... 80
SECTION 1502. Call, Notice and Place of Meetings.......................................................... 81
SECTION 1503. Persons Entitled to Vote at Meetings........................................................ 81
SECTION 1504. Quorum; Action.............................................................................. 82
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings......................... 83
SECTION 1506. Counting Votes and Recording Action of Meetings............................................. 84
ARTICLE SIXTEEN............................................................................................ 84
SECTION 1601. Applicability of Article.................................................................... 84
</TABLE>
<PAGE>
INDENTURE, dated as of January 13, 1999, from NATIONWIDE HEALTH
PROPERTIES, INC., a corporation duly organized and existing under the laws of
the State of Maryland (the "COMPANY"), to Chase Manhattan Bank and Trust
Company, National Association, a corporation duly organized and existing under
the laws of the United States, as Trustee.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured and
unsubordinated debentures, notes or other evidences of indebtedness (the
"SECURITIES"), unlimited as to principal amount, to bear such rates of interest,
to mature at such time or times, to be issued in one or more series and to have
such other provisions as shall be fixed as hereinafter provided. All things
necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder that are required to be part of this
Indenture and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as defined below) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities and any Coupons (as defined below), 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;
<PAGE>
(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 at the date of such computation;
(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;
(5) the word "OR" is always used inclusively (for example, the phrase
"A or B" means "A or B or both", not either "A or B but not both");
and
(6) nouns and pronouns of the masculine gender include the feminine
gender.
Certain terms, used principally in Articles Six and Ten, are defined
in those Articles.
"ACT," when used with respect to any Holder, has the meaning specified
in Section 104.
"ADDITIONAL AMOUNTS" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"AUTHORIZED NEWSPAPER" means a newspaper, in an official language of
the place of publication, or in the English language, customarily published on
each day that is a Business Day in the place of publication, whether or not
published on days that are legal holidays in the place of publication, and of
general circulation in each place in connection with which the term is used or
in the financial community of each such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same
2
<PAGE>
city meeting the foregoing requirements and in each case on any day that is a
Business Day in the place of publication.
"BEARER SECURITY" means any Security in the form established pursuant
to Section 201 which is payable to bearer.
"BOARD OF DIRECTORS" means the board of directors of the Company or
any committee of that board duly authorized to act generally or in any
particular respect for the Company hereunder.
"BOARD RESOLUTION" means a copy of one or more resolutions certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered to the Trustee.
"BUSINESS DAY," when used with respect to any Place of Payment or
other location, means each Monday, Tuesday, Wednesday, Thursday or Friday that
is not a Legal Holiday in any such Place of Payment or other location.
"CAPITAL BASE" means, at any date, the sum of Tangible Net Worth and
Subordinated Debt.
"CAPITAL LEASE" means at any time any lease of Property which, in
accordance with generally accepted accounting principles, would at such time be
required to be capitalized on a balance sheet of the lessee.
"CAPITAL LEASE OBLIGATION" means at any time the amount of the
liability in respect of a Capital Lease which, in accordance with generally
accepted accounting principles, would at such time be required to be capitalized
on a balance sheet of the lessee.
"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 assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such corporation.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person and any other obligor upon the
Securities.
3
<PAGE>
"COMPANY REQUEST" and "COMPANY ORDER" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"CONSOLIDATED NET TANGIBLE ASSETS" means the aggregate amount of
assets (less applicable reserves and other properly deductible items) less (i)
all current liabilities and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expenses and other like intangibles of the Company
and its consolidated Subsidiaries, all as set forth on the most recent balance
sheet of the Company and its consolidated Subsidiaries and prepared in
accordance with generally accepted accounting principles.
"CORPORATE TRUST OFFICE" means an office of the Trustee in the City of
San Francisco and State of California at which at any particular time its
corporate trust business shall be principally conducted, which office, at the
date of execution of this Indenture, is located at 101 California Street, San
Francisco, California 94111.
"CORPORATION" includes corporations, associations, companies and
business trusts.
"COUPON" means any interest coupon appertaining to a Bearer Security.
"COVENANT DEFEASANCE" has the meaning specified in Section 1303.
"CURRENCY" or "MONEY", with respect to any payment, deposit or other
transfer in respect of the principal of or any premium or interest on or any
Additional Amounts with respect to any Security, means the unit or units of
legal tender for the payment of public and private debts (or any composite
thereof) in which such payment, deposit or other transfer is required to be made
by or pursuant to the terms hereof and, with respect to any other payment,
deposit or transfer pursuant to or contemplated by the terms hereof, means
Dollars.
"DEBT", when used with respect to any Person means (i) its
indebtedness, secured or unsecured, for borrowed money; (ii) liabilities secured
by any Lien existing on Property owned by such Person; (iii) Capital Lease
Obligations, and the present value of all payments due under any arrangement for
retention of title (discounted at a rate per annum equal to the average interest
borne by all outstanding Securities determined on a weighted average basis and
compounded semi-annually) if such arrangement is in substance an installment
purchase or an arrangement for the retention of title for security purposes; and
(iv) guarantees of obligations of the character specified in the foregoing
clauses (i), (ii) and (iii) to the full extent of the liability of the guarantor
(discounted to the present value, as provided in the foregoing clause (iii), in
the case of guarantees of title retention arrangements).
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DEFEASANCE" has the meaning specified in Section 1302.
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"DEPOSITARY" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 301, which person, if required by applicable law, regulation or exchange
requirement, must be a clearing agency registered under the Exchange Act and if
so provided with respect to any Security, any successor to such Person and if at
any time there is more than one such Person, "Depositary" as used with respect
to the Securities of any series shall mean the Depositary with respect to the
Securities of such series.
"DOLLARS" or "$" means a dollar or other equivalent unit of legal
tender for payment of public or private debts in the United States of America.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GLOBAL SECURITY" means a Security in the form prescribed in Section
203 evidencing all or part of a series of Securities, issued to the Depositary
for such series or its nominee, and registered in the name of such Depositary or
its nominee.
"HOLDER", in the case of any Registered Security, means a Person in
whose name a Security is registered in the Security Register and, in the case of
any Bearer Security, means the bearer thereof and, in the case of any Coupon,
means 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 and any Coupon
appertaining thereto established as contemplated by Section 301.
"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.
"LEGAL HOLIDAY", with respect to any Place of Payment or other
location, means a Saturday, a Sunday or a day on which banking institutions or
trust companies in such Place of Payment or other location are not obligated to
be open.
"LIABILITIES" means, at any date, the items shown as liabilities on
the balance sheet of the Company, except any items of deferred income, including
capital gains.
"LIEN" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on
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the common law, statute or contract, and including but not limited to the
security interest lien arising from a mortgage, encumbrance, pledge, conditional
sale or trust receipt or a lease, consignment or bailment for security purposes.
The term "Lien" shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and all
other title exceptions and encumbrances affecting Property. For all purposes of
this Indenture, the Company shall be deemed to be the owner of any Property
which it has acquired or holds subject to a conditional sale agreement, Capital
Lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes.
"MATURITY," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, notice of option to elect
repayment or otherwise and includes any Redemption Date.
"NON-RECOURSE DEBT" when used with respect to any Person, means any
Debt secured by, and only by, property on or with respect to which such Debt is
incurred where the rights and remedies of the holder of such Debt in the event
of default do not extend to assets other than the property constituting security
therefore.
"OFFICE OR AGENCY", with respect to any Securities, means an office or
agency of the Company maintained or designated in a Place of Payment for such
Securities pursuant to Section 1002 or any other office or agency of the Company
maintained or designated for such Securities pursuant to Section 1002 or, to the
extent designated or required by Section 1002 in lieu of such office or agency,
the Corporate Trust Office of the Trustee.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, that
complies with the requirements of Section 314(e) of the Trust Indenture Act and
is delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company, that complies with the requirements
of Section 314(e) of the Trust Indenture Act.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides
for an amount less than the principal face amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section
502.
"OUTSTANDING," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
------
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
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(ii) Securities or portions thereof for whose payment at the Maturity
thereof Money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such Securities
and any Coupons appertaining thereto; 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;
(iii) Securities which have been defeased pursuant to Section 1302;
and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, (i) the principal amount
of an Original Issue Discount Security that may be counted in making such
determination and 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 acceleration of the Maturity thereof pursuant to
Section 502, (ii) the principal amount of a Security denominated in a foreign
currency or currency unit that may be counted in making such determination and
that shall be deemed Outstanding for such purpose shall be the U.S. dollar
equivalent, determined by the Company in good faith as of the date of original
issuance of such Security, of the principal amount of such Security (or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined by the Company in good faith as of the date of original issuance of
such Security, of the amount determined as provided in (i) above), 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 making any such determination or relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee knows according to the
Security Register 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 Coupons appertaining thereto or any
Affiliate of the Company or of such other obligor.
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"PAYING AGENT" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on, or any Additional Amounts
with respect to, any Security or any Coupon on behalf of the Company.
"PERSON" means any individual, corporation, partnership, limited
liability company, 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 (or premium, if any) or
interest on, or any Additional Amounts with respect to, such Securities of that
series are payable as specified in or as contemplated by this Indenture.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or any Security to which a
mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen Coupon appertains.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"REDEMPTION DATE," when used with respect to any Security or portion
thereof 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 or portion
thereof to be redeemed, means the price at which it is to be redeemed as
determined by or pursuant to this Indenture.
"REGISTERED SECURITY" means any Security established pursuant to
Section 201 which is registered in the Security Register.
"REGULAR RECORD DATE" for the interest payable on any Registered
Security of any series on any Interest Payment Date therefor means the date
specified for that purpose as contemplated by Section 301.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means
any Vice President, any assistant secretary, any assistant treasurer, any trust
officer or assistant trust officer who, in each case, is employed in the
administration of the Trustee's corporate trust business, 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 or her knowledge of and familiarity with the particular
subject.
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"SECURITIES" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"SENIOR DEBT" means all Debt other than Non-Recourse Debt and
Subordinated Debt.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on any
Registered Security means a date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon or any Additional Amounts
with respect thereto, means the date specified in such Security as the fixed
date on which the principal of such Security or such installment of principal or
interest or such Additional Amounts is due and payable.
"SUBORDINATED DEBT" means unsecured Debt of the Company which is
issued or assumed pursuant to, or evidenced by, an indenture or other instrument
which contains provisions for the subordination of such Debt (to which
appropriate reference shall be made in the instruments evidencing such Debt if
not contained therein) to the Securities (and, at the option of the Company, if
so provided, to other Debt of the Company, either generally or as specifically
designated).
"SUBSIDIARY" means a corporation, partnership, limited liability
company or trust more than 50% of the outstanding Voting Stock of which is
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries.
"TANGIBLE ASSETS" means all assets of the Company (including assets
held subject to Capital Leases and other arrangements described in the last
sentence of the definition of "LIEN") except: (i) deferred assets, other than
prepaid insurance, prepaid taxes and deposits; (ii) patents, copyrights,
trademarks, trade names, franchises, goodwill, experimental expense and other
similar intangibles; and (iii) unamortized debt discount and expense.
"TANGIBLE NET WORTH" means, with respect to the Company at any date,
the net book value (after deducting related depreciation, obsolescence,
amortization, valuation and other proper reserves) of the Tangible Assets of the
Company at such date minus the amount of its Liabilities at such date.
"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
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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, and any reference herein to the Trust Indenture Act or a particular
provision thereof means such act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such act or provision, as the case may be.
"UNITED STATES ALIEN", except as otherwise provided in or pursuant to
this Indenture, means any Person who for United States federal income tax
purposes, is a foreign corporation, a non-resident alien individual, a non-
resident alien fiduciary of a foreign estate or trust, or a foreign partnership
one or more of the members of which is, for United States federal income tax
purposes, a foreign corporation, a non-resident alien individual or a non-
resident alien fiduciary of a foreign estate or trust.
"U.S. GOVERNMENT OBLIGATIONS" has the meaning specified in Section
1304(1).
"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" means stock or other interests evidencing ownership in
a corporation, partnership, limited liability company or trust which ordinarily
has voting power for the election of directors, or other persons performing
equivalent functions, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Except as otherwise expressly provided by this Indenture, 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
or any of them is specifically required by any provision of this Indenture
relating to such particular application or request, including any request to
authenticate and deliver Securities of any series pursuant to Section 303, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than certificates
provided pursuant to Section 704(4), shall include
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(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 or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
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
Counsel, 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 or her certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel or
representations by counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by or pursuant to this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing.
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If, but only if, Securities of a series are issuable as Bearer Securities, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in or pursuant to this Indenture to be given or taken by Holders
of Securities of such series may, alternatively, be embodied in and evidenced by
the record of Holders of Securities of such series voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities of such series duly called and held in accordance with the
provisions of Article Fifteen, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "ACT" of the
Holders signing such instrument or instruments or so voting at any such meeting.
Proof of execution of any such instrument or of a writing appointing any such
agent, or of the holding by any Person of a Security, shall be sufficient for
any purpose of this Indenture and (subject to Section 315 of the Trust Indenture
Act) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of Securities
shall be proved in the manner provided in Section 1506.
Without limiting the generality of this Section, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a Depositary that
is a Holder of a global Security, may make, give or take, by a proxy, or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in or pursuant to
this Indenture to be made, given or taken by Holders, and a Depositary that is a
Holder of a global Security may provide for the beneficial owners of interests
in any such global Security to direct such Depositary in taking such action
through such Depositary's standing instructions and customary practices. The
Depositary shall report only one result of its solicitation of proxies to the
Trustee.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(3) The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
(4) The ownership, principal amount and serial numbers of Bearer
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker
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or other depositary reasonably acceptable to the Company, wherever situated, if
such certificate shall be deemed by the Company and the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, 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 Company 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, or (2) such Bearer Security is produced to the
Trustee by some other person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding. The ownership, principal amount and serial numbers of Bearer
Securities held by the Person so executing such instrument or writing and the
date of the commencement and the date of the termination of holding the same may
also be proved in any other manner which the Company and the Trustee deem
sufficient.
(5) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company shall, by Board Resolution, fix in advance a
record date for the determination of Holders of Registered Securities entitled
to give such request, demand, authorization, direction, notice, consent, waiver
or other Act. 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 Registered Securities of record at the close of business on such
record date shall be deemed to be Holders for the purpose 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 of Registered Securities 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.
(6) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to
the Company addressed to it at Nationwide Health Properties, Inc.,
610 Newport Center Drive, Suite 1150, Newport Beach, California
92660, Attention: President, or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Except as otherwise expressly provided in or pursuant to this
Indenture, where this Indenture provides for notice to Holders of Securities of
any event,
(1) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class mail
postage prepaid, to each Holder of a Registered Security affected by
such event, at his or her address as it appears in the Security
Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The
City of New York and, if such Securities are then listed on any
stock exchange outside the United States, in an Authorized Newspaper
in such city as the Company shall advise the Trustee that such stock
exchange so requires, on a Business Day at least twice, the first
such publication to be not earlier than the earliest date and not
later than the latest date prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, 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. In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason 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
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of the Trustee shall constitute sufficient notice to such Holders for every
purpose hereunder. Neither failure to give notice by publication to Holders of
Bearer Securities as provided above, nor any defect in any notice so published,
shall affect the sufficiency of any notice mailed to Holders of Registered
Securities as provided above.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Language of Notices, etc.
-------------------------
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that, if the Company so elects, any published notice
may be in an official language of the country of publication.
SECTION 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.
SECTION 109. 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 110. 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 111. Separability Clause.
-------------------
In case any provision in this Indenture or in any Security or Coupon
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.
SECTION 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in any Security or Coupon, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent and their successors hereunder and the Holders of
Securities or Coupons, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
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SECTION 113. Governing Law.
-------------
This Indenture, the Securities and any Coupons shall be governed by
and construed in accordance with the laws of the State of New York.
SECTION 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security shall be a Legal Holiday in The City of New York or at
any Place of Payment, then (notwithstanding any other provision of this
Indenture or of any Security or Coupon other than a provision in this Indenture,
any Security or Coupon that specifically states that such provision shall apply
in lieu of this Section) payment of interest or principal (and premium, if any)
need not be made at such Place of Payment on such date, but may be made on the
next succeeding Business Day in The City of New York and at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or at the Stated Maturity or Maturity, provided that no interest, except as
--------
provided in Section 502(1)(c), if applicable, shall accrue for the period from
and after such Interest Payment Date, Stated Maturity or Maturity, as the case
may be. Notwithstanding the foregoing, in the event that any Interest Payment
Date relating to any Security whose interest rate is determined by reference to
LIBOR is not a Business Day and the next succeeding Business Day falls in the
next calendar month, such Interest Payment Date will be the last Business Day in
the preceding month.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
---------------
Each Registered Security, Bearer Security and Coupon shall be in
substantially the form (including temporary and permanent global form) as shall
be established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers of the Company
executing such Securities or Coupons, as evidenced by their execution of such
Securities or Coupons. If the form of Securities of any series is established
by action taken pursuant to a Board Resolution, a copy of an appropriate record
of such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and delivery of
such Securities. If all of the Securities of any series established by action
taken pursuant to a Board Resolution are not to be issued at one time, it shall
not be necessary to deliver a record of such action at the time of issuance of
each Security of such series, but an
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appropriate record of such action shall be delivered at or before the time of
issuance of the first Security of such series.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, the Securities of each series shall be issuable in
registered form without Coupons. If so provided as contemplated by Section 301,
the Securities of a series also shall be issuable in bearer form, with or
without interest Coupons attached.
The definitive Securities and Coupons shall be printed, lithographed
or engraved or may be produced in any other manner, all as determined by the
officers of the Company executing such Securities or Coupons, as evidenced by
their execution of such Securities or Coupons.
Neither the Company nor the Trustee shall have responsibility for any
defect in the CUSIP number that appears on any bond, check, advice of payment or
redemption notice, and any such document may contain a statement to the effect
that CUSIP numbers have been assigned by an independent service for convenience
of reference and that neither the Company nor the Trustee shall be liable for
any inaccuracy in such numbers.
SECTION 202. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
Subject to the provisions of Section 614 hereof, the Trustee's
certificate of authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Chase Manhattan Bank and Trust Company, National Association,
as Trustee
By_______________________
Authorized Signatory
SECTION 203. Provisions in Global Security.
-----------------------------
If Securities of a series are issuable in whole or in part in global
form, as specified in and as contemplated by Section 301, then, notwithstanding
the provisions of Sections 301 and 302, any such 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 principal amount of
Outstanding Securities from time to time endorsed thereon and that the aggregate
principal amount of Outstanding Securities represented thereby may from time to
time be increased or reduced to reflect exchanges and payments of principal.
The global form may be permanent or temporary. Any endorsement of a Security in
global form to reflect the amount, or any increase or
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decrease in the principal amount, of Outstanding Securities 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 to be
delivered to the Trustee pursuant to Section 303 or Section 304. Subject to the
provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 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.
Notwithstanding the other provisions of this Indenture, unless
otherwise specified as contemplated by Section 301, payment of principal of and
any premium and interest on any Security in permanent global form shall be made
to the Person or Persons specified therein.
Notwithstanding the provisions of Section 307 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a Global Security as shall be
specified in a written statement of the Depositary with respect to such Global
Security, for purposes of obtaining any consents or directions required to be
given by the Holders pursuant to this Indenture.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. With respect to
any Securities to be authenticated and delivered hereunder, there shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities and 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
Indenture (except for Securities authenticated and delivered upon
registration or transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or
1107 and except for any Securities which, pursuant to Section 303,
shall not have been issued and
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sold by the Company and are therefore deemed never to have been
authenticated and delivered hereunder);
(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without Coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series
may be exchanged for Registered Securities of the series and vice
versa;
(4) if any of such Securities are to be issuable in global form, when
any of such Securities are to be issuable in global form and (i)
whether beneficial owners of interests in any such Global Security may
exchange such interests for Securities of the same series and of like
tenor and of any authorized form and denomination, and the
circumstances under which any such exchange may occur, if other than
in the manner specified in Section 305, and (ii) the name of the
Depositary with respect to any Global Security;
(5) the date as of which any Bearer Securities of the series and any
temporary Global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of
the first Security of the series to be issued;
(6) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form (representing all of the Outstanding
Bearer Securities of the series) payable on an Interest Payment Date
prior to the exchange of such temporary Bearer Security for definitive
Securities of the series shall be paid to any clearing organization
with respect to the portion of such temporary Bearer Security held for
its account and, in such event, the terms and conditions (including
any certification requirements) upon which any such interest payment
received by a clearing organization will be credited to the Persons
entitled to interest payable on such Interest Payment Date;
(7) the Person to whom any interest on a Security of the series shall
be payable at Maturity, 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;
(8) the date or dates (or the method or methods, if any, by which such
date or dates shall be determined) on which the principal (and
premium, if any) of the Securities of the series is payable;
(9) the rate or rates (or the formula pursuant to which such rate or
rates shall be determined) at which the Securities of the series shall
bear interest, if any, including the rate of interest applicable on
overdue
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<PAGE>
payments of principal or interest, if different from the rate of
interest stated in the Security; the date or dates from which such
interest shall accrue (or the method or methods, if any, by which such
date or dates shall be determined), the Interest Payment Dates, if
any, on which such interest shall be payable and the Regular Record
Date, if any, for the interest payable on Registered Securities on any
Interest Payment Date; whether and under what circumstances Additional
Amounts on such Securities shall be payable in respect of specified
taxes, assessments or other governmental charges withheld or deducted
and, if so, whether the Company has the option to redeem the affected
Securities rather than pay such Additional Amounts; and the basis upon
which interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;
(10) if in addition to or other than the Borough of Manhattan, The
City of New York, the place or places where the principal of, any
premium and interest on or any Additional Amounts with respect to such
Securities shall be payable, any of such Securities that are
Registered Securities may be surrendered for registration of transfer,
any of such Securities may be surrendered for exchange and notices or
demands to or upon the Company in respect of such Securities and this
Indenture may be served;
(11) if applicable, the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of
the series may be redeemed, in whole or in part, at the option of the
Company;
(12) 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 redeemed or
purchased, in whole or in part, pursuant to such obligation;
(13) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(14) the currency or currencies, including composite currencies, in
which payment of the principal of (and premium, if any) and interest,
if any, on or any Additional Amounts with respect to, the Securities
of the series shall be payable if other than the currency of the
United States, which may be different for principal, premium, if any,
and interest;
(15) if the principal of (and premium, if any) or interest, if any, on
or any Additional Amounts with respect to, the Securities of the
series are to be payable, at the election of the Company or a Holder
thereof or otherwise, in a Currency or Currencies other than that in
which the Securities are stated to be payable, the Currency or
Currencies in which
20
<PAGE>
payment of the principal of (and premium, if any) or interest on or
any Additional Amounts with respect to Securities of such series as to
which such election is made shall be payable, and the period or
periods within which, and the terms and conditions upon which, such
election may be made;
(16) if the amount of payments of principal of (and premium, if any)
or interest, if any, on or any Additional Amounts with respect to, the
Securities of the series may be determined with reference to an index,
formula or other method or methods, the manner in which such amounts
shall be determined;
(17) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
(18) any Event of Default or covenant of the Company with respect to
the Securities of the series, if not set forth herein;
(19) whether either or both of Section 1302 and Section 1303 shall not
apply to the Securities of the series;
(20) 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 Depositary for such Global Security or Securities, which
Depositary shall be, if then required by applicable law or regulation,
a clearing agency registered under the Securities Exchange Act of
1934, as amended;
(21) any other terms of the series, including the covenants to be
applicable to Securities of such series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(22) if not the Trustee, the identity of each Security Registrar,
Paying Agent or Authenticating Agent with respect to such Securities.
All Securities of any one series and Coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
Currency of payments due thereunder, denomination and rate or rates of interest,
if any, the method or methods, if any, by which such rate or rates are to be
determined and Maturity, the date from which interest, if any shall accrue and
except as may otherwise be provided in or pursuant to the Board Resolution
referred to above and (subject to Section 303) set forth in the Officers'
Certificate referred to above or in any such indenture supplemental hereto. All
Securities of any one series need not be issued at one time and, unless
otherwise provided, a series may be reopened for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall
21
<PAGE>
be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series. If all of the Securities of
any series established by action taken pursuant to a Board Resolution are not to
be issued at one time, it shall not be necessary to deliver a record of such
action at the time of issuance of each Security of such series, but an
appropriate record of such action shall be delivered at or before the time of
issuance of the first Security of such series.
SECTION 302. Denominations.
-------------
Unless otherwise provided in or pursuant to this Indenture, the
principal of, any premium and interest on and any Additional Amounts with
respect to the Securities shall be payable in Dollars. Unless other
denominations and amounts may from time to time be fixed by or pursuant to a
Board Resolution, the Registered Securities of each series, if any, shall be
issuable in registered form without Coupons in denominations of $1,000 and any
integral multiple thereof, and the Bearer Securities of each series, if any,
shall be issuable in the denomination of $5,000, or in such other denominations
and amounts as may from time to time be fixed by or pursuant to a Board
Resolution. Securities not denominated in Dollars shall be issuable in such
denominations as are established with respect to such Securities as provided in
or pursuant to this Indenture.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. Coupons shall bear the signature of the Treasurer or any
Assistant Treasurer of the Company. The signature of any of these officers on
the Securities or the Coupons may be manual or facsimile.
Securities and Coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any Coupons appertaining thereto, executed by the Company to the Trustee for
authentication, and, provided that the Board Resolution and Officers'
Certificate with respect to such Securities referred to in Section 301 and a
Company Order for the authentication and delivery of such Securities has been
delivered to the Trustee, the Trustee in accordance with the Company Order and
subject to the provisions hereof and of such Securities shall authenticate and
make available for delivery such Securities. If all of the Securities of any
series are not to be issued at one time and if the Board Resolution or
supplemental indenture establishing such series shall so permit, such Company
Order may set forth
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<PAGE>
procedures acceptable to the Trustee for the issuance of such Securities and
determining the terms of particular Securities of such series, such as interest
rate, maturity date, date of issuance and date from which interest shall accrue.
In authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon
(1) an Opinion of Counsel stating,
(a) if the form of such Securities and Coupons, if any, has been
established by or pursuant to a Board Resolution as permitted by
Section 201, that such form has been established in conformity with
the provisions of this Indenture;
(b) if the terms of such Securities and Coupons, if any, have been
established by or pursuant to a Board Resolution as permitted by
Section 301, that such terms have been established in conformity with
the provisions of this Indenture;
(c) all conditions precedent to the authentication and delivery of
such Securities and Coupons, if any, appertaining thereto, have been
complied with and that such Securities together with the Coupons, if
any, appertaining thereto, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel and paid for, will be
legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws), and except that such counsel may advise
that the enforceability of the Securities and Coupons is subject to:
(a) the effect of general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and
fair dealing and the possible unavailability of specific performance,
injunctive relief, or other equitable remedies regardless of whether
considered in a proceeding in law or at equity, and, if applicable,
(b) provisions of law which may require that a judgment for money
damages rendered by a court in the United States be expressed in
United States dollars;
(d) all laws and requirements in respect of the execution and
delivery by the Company of such Securities and Coupons, if any, have
been complied with; and
(e) as to such other matters as the Trustee may reasonably request;
and
(2) an Officers' Certificate stating that all conditions precedent to
the authentication and delivery of such Securities and Coupons, if any,
appertaining thereto,
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<PAGE>
have been complied with and to the best knowledge of the Persons executing such
certificate, no event which is, or after notice or lapse of time would become,
an Event of Default with respect to any of the Securities has occurred and is
continuing.
If such forms or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the time of authentication upon original issuance of
the first Security of such series to be issued.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security and any temporary Bearer Security in
global form shall be dated as of the date specified as contemplated by Section
301.
No Security or Coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein executed by or on behalf of the Trustee by manual
signature of one of its authorized signatories or by the Authenticating Agent,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309
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. Except
as permitted by Section 306 or 307, the Trustee shall not authenticate and
deliver any Bearer Security unless all appurtenant Coupons for interest then
matured have been detached and cancelled.
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
reproduced 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,
24
<PAGE>
in bearer form with one or more Coupons or without Coupons and with such
appropriate insertions, omissions, substitutions and other variations as the
officers of the Company executing such Securities may determine, as conclusively
evidenced by their execution of such Securities. Such temporary Securities may
be in global form.
Except in the case of temporary Securities issued in global form,
which shall be exchanged in accordance with the provisions thereof, if temporary
Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any unmatured Coupons appertaining thereto) the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, in exchange therefor a like principal amount of definitive Securities
of the same series and tenor of authorized denominations; provided, however,
that no definitive Bearer Security, except as provided pursuant to Section 301,
shall be delivered in exchange for a temporary Registered Security; and,
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 herein. Unless otherwise provided in or pursuant to this Indenture
with respect to a temporary Global Security, until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
With respect to the Registered Securities of each series, the Company
shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency of
the Company in a Place of Payment being herein sometimes 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 the Registered
Securities of such series and of transfers and exchanges of the Registered
Securities of such series. The Trustee is hereby appointed "SECURITY REGISTRAR"
for the purpose of registering the Registered Securities and transfers of the
Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency in a Place of Payment for that 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,
of a like tenor and aggregate principal amount and bearing a number not
contemporaneously outstanding.
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 tenor and aggregate principal amount,
upon surrender of the
25
<PAGE>
Securities to be exchanged at such office or agency. Whenever any Registered
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, the Registered
Securities which the Holder making the exchange is entitled to receive.
If provided in or pursuant to this Indenture, with respect to
Securities of any series, at the option of the Holder, Bearer Securities of such
series may be exchanged for Registered Securities of such series containing
identical terms, denominated as authorized in or pursuant to this Indenture and
in the same aggregate principal amount, upon surrender of the Bearer Securities
to be exchanged at any Office or Agency in a Place of Payment for such series,
with all unmatured Coupons and all matured Coupons in default thereto
appertaining. 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 and the Trustee 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 Bearer
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 1002, interest represented by Coupons shall be payable only
upon presentation and surrender of those Coupons at an Office or Agency for such
series in a Place of Payment located outside the United States. Notwithstanding
the foregoing, in case a Bearer Security of any series is surrendered at any
such Office or Agency for such series in exchange for a Registered Security of
such 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 date
for payment of Defaulted Interest, such Bearer Security shall be surrendered
without the Coupon relating to such Interest Payment Date or proposed date of
payment, as the case may be (or, if such Coupon is so surrendered with such
Bearer Security, such Coupon shall be returned to the Person so surrendering the
Bearer Security), and interest or Defaulted Interest, as the case may be, shall
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 shall be payable only to the Holder of such Coupon
when due in accordance with the provisions of this Indenture.
If provided in or pursuant to this Indenture with respect to
Securities of any series, at the option of the Holder, Registered Securities of
such series may be exchanged at an Office or Agency located outside of the
United States for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.
Whenever any Securities are surrendered for exchange as contemplated
by the immediately preceding two paragraphs, the Company shall execute, and the
Trustee
26
<PAGE>
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or
pursuant to this Indenture, any Global Security shall be exchangeable for
definitive Securities only if (i) the Depositary is at any time unwilling,
unable or ineligible to continue as Depositary and a successor depositary is not
appointed by the Company within 60 days of the date the Company is so informed
in writing, (ii) the Company executes and delivers to the Trustee a Company
Order to the effect that such Global Security shall be so exchangeable, or (iii)
an Event of Default has occurred and is continuing with respect to the
Securities of that series. If the beneficial owners of interests in a Global
Security are entitled to exchange such interests for definitive Securities, then
without unnecessary delay but in any event not later than the earliest date on
which such interests may be so exchanged, the Company shall deliver to the
Trustee definitive Securities in such form and denominations as are required by
or pursuant to this Indenture, and of the same series, containing identical
terms and in aggregate principal amount equal to the principal amount of, such
Global Security, executed by the Company. On or after the earliest date on which
such interests may be so exchanged, such Global Security shall be surrendered
from time to time by the Depositary as shall be specified in the Company Order
with respect thereto, and in accordance with instructions given to the Trustee
and the Depositary (which instructions shall be in writing but need not be
contained in or accompanied by an Officers' Certificate or be accompanied by an
Opinion of Counsel), as shall be specified in the Company Order with respect
thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or in part, for definitive Securities as described above
without charge. The Trustee shall authenticate and make available for delivery,
in exchange for each portion of such surrendered Global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such Global
Security to be exchanged, which (unless such Securities are not issuable both as
Bearer Securities and as Registered Securities, in which case the definitive
Securities exchanged for the Global Security shall be issuable only in the form
in which the Securities are issuable, as provided in or pursuant to this
Indenture) shall be in the form of Bearer Securities or Registered Securities,
or any combination thereof, as shall be specified by the Depository; provided,
---------
however, that no such exchanges may occur during a period beginning at the
- --------
opening of business 15 days before any selection of Securities of the same
series and containing identical terms to be redeemed and ending on the relevant
Redemption Date; and provided, further, that (unless otherwise provided in or
pursuant to this Indenture) no Bearer Security delivered in exchange for a
portion of a Global Security shall be mailed or otherwise delivered to any
location in the United States. Promptly following any such exchange in part,
such Global Security shall be returned by the Trustee to such Depositary
referred to above in accordance with the instructions of the Company referred to
above. If a Registered Security is issued in exchange for any portion of a
Global Security after the close of business at the office or agency in the Place
of Payment for such Security where such exchange occurs on or after (i) any
Regular Record Date for such Security and before the opening of business at such
office or agency on the next Interest Payment Date, or (ii) any Special Record
Date for such Security and before the opening of business at such office or
agency on the related
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proposed date for payment of interest or Defaulted Interest, as the case may be,
interest shall 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 shall
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 Global Security shall be 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 entitling the Holders thereof 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 or redemption shall (if so required by the Company or
the Security Registrar for such Security) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar for such Security duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge to the Holder shall be made for any registration of
transfer or exchange, or redemption of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1107 not
involving any transfer.
Except as otherwise provided in or pursuant to this Indenture, the
Company shall not be required (i) to issue, register the transfer of or exchange
any Security during a period beginning at the opening of business 15 days before
any selection for redemption of Securities of like tenor and of the series of
which such Security is a part and ending at the close of business on the
earliest date on which the relevant notice of redemption is deemed to have been
given to all Holders of Securities of such series to be redeemed, 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, to the extent provided with respect to such Bearer Security,
that such Bearer Security may be exchanged for a Registered Security of like
tenor and the same series, provided that such Registered Security shall be
immediately surrendered for redemption with written instruction for payment
consistent with the provisions of this Indenture or (iv) to issue, register the
transfer of or exchange any Security which, in accordance with its terms, has
been surrendered for repayment at the option of the Holder, except the portion,
if any, of such Security not to be so repaid.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more global Securities
shall no longer be represented by such Global Security or Securities. 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, Securities of
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<PAGE>
such series in definitive form and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
Notwithstanding any other provision in this Indenture, a Global
Security may not be transferred except as a whole by the Depositary with respect
to such Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary. Unless
otherwise provided as contemplated by Section 301 with respect to any series of
Securities evidenced in whole or in part by a Global Security, the Depositary
may not sell, assign, transfer or otherwise convey any beneficial interest in a
Global Security evidencing all or part of the Securities of such series unless
such beneficial interest is in an amount equal to an authorized denomination for
Securities of such series.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security, or a Security with a mutilated Coupon
appertaining to it, is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver 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 appertaining thereto
corresponding to the Coupons, if any, appertaining to the surrendered Security.
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 upon its
request 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 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, appertaining 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, pay such Security or Coupon;
provided, however, that payment of principal of, any premium or interest on or
any Additional Amounts with respect to any Bearer Securities shall, except as
otherwise provided in Section 1002, be payable only at an Office or Agency at a
Place of Payment for such Securities located outside the United States and,
unless otherwise provided in or pursuant to this Indenture, any interest on
Bearer Securities and any Additional Amounts with respect to such interest shall
be payable only upon presentation and surrender of the Coupons appertaining
thereto.
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Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security, with any Coupons appertaining thereto issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen Coupon
appertains shall constitute a separate obligation of the Company, whether or not
the destroyed, lost or stolen Security and Coupons appertaining thereto or the
destroyed, lost or stolen Coupon shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of such series and any
Coupons, if any, 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 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on and any Additional Amounts with respect
to any Registered Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid by check mailed by
first class mail 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. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an Office or Agency in a Place of Payment for such series) on
any Regular Record Date and before the opening of business (at such Office or
Agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the Coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date 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.
Any interest on and any Additional Amounts with respect to any
Registered Security of any series which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date for such Registered Security
(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 Person or 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
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<PAGE>
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 Registered 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, first-
class postage prepaid, to each Holder of Registered Securities of such
series at his or her address as it appears in the Security Register,
not less than 10 days prior to such Special Record Date. The Trustee
may, in its discretion, in the name and at the expense of the Company
cause a similar notice to be published at least once in an Authorized
Newspaper of general circulation in The City of New York, but such
publication shall not be a condition precedent to the establishment of
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 Registered 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). In case a Bearer Security of any series is
surrendered at the office or agency in a Place of payment for such
series in exchange for a Registered Security of such series after the
close of business at such office or agency on 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
proposed date of payment and Defaulted Interest will not be payable on
such proposed date of payment 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.
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment
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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 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a 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 Security for the purpose of receiving payment of principal of (and
premium, if any) and (subject to Sections 305 and 307) interest on and any
Additional Amounts with respect to such Registered Security and for all other
purposes whatsoever, whether or not any payment with respect to such Registered
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security or the bearer of any Coupon as the
absolute owner of such Security or Coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not any payment with respect to 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.
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by a Depositary or impair, as between a
Depositary and beneficial owners of interests in any Global Security, the
operation of customary practices governing the exercise of the rights of the
Depositary as Holder of such Global Security.
SECTION 309. 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, and any such Securities and Coupons, as well as Securities and
Coupons surrendered directly to the Trustee for any such purpose, shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee
for cancellation any Securities and Coupons 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 and Coupons previously
authenticated hereunder which the Company has not issued and sold, and all
Securities and Coupons so delivered shall be promptly cancelled by the Trustee.
No Securities shall be
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authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities and Coupons held by the Trustee shall be returned to the Company upon
the written request of the Company.
SECTION 310. Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect with respect to any series of Securities specified in such Company
Request (except as otherwise specifically provided herein and as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for and any rights to receive Additional Amounts) and any
Coupons appertaining thereto, and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture as to such series, when
(1) either
(a) all Securities of such series and all Coupons appertaining
thereto, theretofore authenticated and delivered (other than (i)
Coupons appertaining to Bearer Securities of such series surrendered
for exchange for Registered Securities of such series and maturing
after such exchange, whose surrender is not required or has been
waived as provided in Section 305, (ii) Securities and Coupons of such
series which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306, (iii) Coupons
appertaining to Securities of such series called for redemption and
maturing after the relevant Redemption Date, whose surrender has been
waived as provided in Section 1106 and (iv) Securities and Coupons of
such series for whose payment Money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust (as provided in
Section 1003)), have been delivered to the Trustee for cancellation;
or
(b) all Securities of such series and, in the case of clause (i)
or (ii) below, any Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
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(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities and Coupons
appertaining thereto not theretofore delivered to the Trustee for
cancellation, including the principal thereof (and premium, if any)
and interest thereon, and any Additional Amounts with respect thereto,
to the date of such deposit (in the case of Securities which have
become due and payable) or to the Maturity thereof, as the case may
be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 607, and, if Money shall have been deposited with the
Trustee pursuant to subclause (b) of Clause (1) of this Section, the rights,
powers, protections, trusts, duties and indemnities of the Trustee hereunder,
the Company's obligations with respect to such Securities under Sections 304,
305, 306, 1002 and 1003, and the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
Money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
Coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of
34
<PAGE>
the principal (and premium, if any) and interest and Additional Amounts for
whose payment such Money has been deposited with the Trustee; but such Money
need not be segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-----------------
"Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest on or any Additional
Amounts payable with respect to any Security of that series when such
interest or Additional Amounts 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 Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when, as and
if due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture or any Security of that series (other
than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which
has expressly been included in this Indenture solely for the benefit
of series of Securities other than that series), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "NOTICE OF DEFAULT"
hereunder; or
(5) the entry by a court having jurisdiction in the premises of (a) a
decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (b) a decree or
order adjudging the Company as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any
applicable Federal
35
<PAGE>
or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(7) any other Event of Default provided in or pursuant to this
Indenture with respect to Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the Money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of not less than a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
36
<PAGE>
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(a) all overdue interest on and any Additional Amounts payable
with respect to all Securities of that series and any Coupons
appertaining thereto,
(b) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon and any Additional Amounts with
respect thereto at the rate or rates prescribed therefor in such
Securities,
(c) to the extent that payment of such interest or Additional
Amounts is lawful, interest upon overdue interest and Additional
Amounts at the rate or rates prescribed therefor in such Securities,
and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of, any premium and
interest on, and any Additional Amounts with respect to Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
---------------------------------------------------------------
The Company covenants that if
(1) default is made in the payment of any interest on or any
Additional Amounts payable with respect to any Security or any Coupon
appertaining thereto when such interest or Additional Amounts shall
have become due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and Coupons appertaining thereto, the
whole amount then due and payable on such Securities and Coupons for principal,
including any sinking fund payment or analogous obligations (and premium, if
any) and interest and Additional
37
<PAGE>
Amounts, if any, and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal (and premium, if any) and
on any overdue interest and Additional Amounts, at the rate or rates prescribed
therefor in such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the amounts so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and Coupons
appertaining thereto and collect the Moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other
obligor upon such Securities and Coupons appertaining thereto, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any Coupons appertaining thereto by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, interest or
Additional Amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest, if any, and any Additional Amounts
owing and unpaid in respect of the Securities and any Coupons
appertaining thereto and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders of Securities or any Coupons allowed in such judicial
proceeding, and
(2) to collect and receive any Moneys or other property payable or
deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of Securities
or any Coupons any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or Coupons or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of Securities or any Coupons in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
--------------------------------------------------------------
Coupons.
- -------
All rights of action and claims under this Indenture or the Securities
or Coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or Coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall be paid and applied as provided in Section 506.
SECTION 506. Application of Money Collected.
------------------------------
Any Money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such Money on account of principal (and premium,
if any), interest or any Additional Amounts, upon presentation of the Securities
or Coupons, or both, as the case may be, and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on and any Additional
Amounts with respect to the Securities and Coupons in respect of which
or for the benefit of which such Money has been collected, ratably,
without preference or priority of any kind, according to the amounts
due and payable on such Securities and Coupons for principal (and
premium, if any) and interest and any Additional Amounts,
respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. Limitation on Suits.
-------------------
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No Holder of any Security of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses (including the reasonable
compensation and expenses of legal counsel) and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights of
any other of such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium,
-------------------------------------------------------------
Interest and Additional Amounts.
-------------------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security or Coupon, shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 305 and 307) interest on and any Additional Amounts with
respect to such Security or payment of such Coupon on the respective Stated
Maturity or Maturities therefor expressed in such Security or Coupon (or, in the
case of redemption, on the Redemption Date or, in the case of repayment at the
option of such Holder if provided in or pursuant to this Indenture, on the date
such repayment is due) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
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If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or Coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. To the
extent permitted by applicable law, the assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
To the extent permitted by applicable law, no delay or omission of the
Trustee or of any Holder of any Securities or Coupons to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders.
------------------
Subject to the provisions of Sections 503, 601(3) and 603(5), the
Holders of not less than a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture or with the Securities of such series;
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) such direction, in the reasonable judgment of the Trustee, is not
unduly prejudicial to the rights of other Holders of Securities of
such series.
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Upon receipt by the Trustee of any purported direction with respect to
Securities of a series all or part of which is represented by a Global Security,
the Trustee shall establish a record date for determining Holders of Outstanding
Securities of such series entitled to join in such direction, which record date
shall be at the close of business on the day the Trustee receives such
direction. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such direction, whether or
not such Holders remain Holders after such record date; provided, that unless
--------
such majority in principal amount shall have been obtained prior to the day
which is 90 days after such record date, such direction shall automatically and
without further action by any Holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new direction identical to a
direction which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 512.
SECTION 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may, on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto, waive any past
default hereunder with respect to such series and its consequences, except a
default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security
of such series or any Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder
of each Outstanding Security of such series affected.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any past default
hereunder. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided, that unless such majority in principal amount shall have been
--------
obtained prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
or Coupon by his or her acceptance thereof shall be deemed to have agreed, that
any court
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may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder or group of Holders holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on or any Additional Amounts in respect of any Security or
the payment of any Coupon on or after the respective Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date or, in the case of repayment at the option of such
Holder if provided in or pursuant to this Indenture, on the date such repayment
is due) or interest on any overdue principal of any Security or to the extent
permitted by law, the payment of interest on any Additional Amounts
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(1) Except during the continuance of an Event of Default,
(a) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(b) 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; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture.
(2) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
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(3) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
------
(a) this Subsection shall not be construed to limit the effect of
Subsection (1) of this Section;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series, determined as provided in
Section 512, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture with
respect to the Securities of such series; and
(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.
(4) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section, and shall extend to its officers, directors, employees, agents,
successors and assigns. All references in this Article Six to the Trustee shall
be deemed to refer to the Trustee acting in its capacities hereunder as Trustee,
Paying Agent, Security Registrar and Calculation Agent.
SECTION 602. Notice of Defaults.
------------------
The Trustee shall not be deemed to have knowledge of any default or
Event of Default hereunder unless and until a Responsible Officer shall have
actual knowledge thereof, or shall have received written notice thereof at its
Corporate Trust Office. In the absence of such actual knowledge or notice, the
Trustee may conclusively assume that no default has occurred and is continuing
under this Indenture. Except as otherwise expressly provided herein, the
Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or
any of the documents executed in connection with Securities issued hereunder, or
as to the existence of a default or Event of Default hereunder.
Within 90 days after a Responsible Officer of the Trustee (1) obtains
actual knowledge of the occurrence of any default hereunder with respect to the
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Securities of any series or (2) receives written notice of such default from the
Company or any other obligor on such Securities or by any Holder of such
securities, the Trustee shall transmit by mail to all Holders of Securities of
such series, as their names and addresses appear in the Security Register,
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
-------- -------
default in the payment of the principal of (or premium, if any) or interest on,
or any Additional Amounts with respect to, any Security of such series or in the
payment of any sinking fund installment with respect to Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interests of the Holders of Securities
and Coupons of such series; and provided, further, that in the case of any
-------- -------
default of the character specified in Section 501(4) with respect to Securities
of such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"DEFAULT" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
-------------------------
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act
and the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it in good faith to be genuine and to
have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order or as
otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel and the oral or written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
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(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities of any series or any
Coupons appertaining thereto pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
The permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty unless so specified herein.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, and in any Coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or Coupons except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and Coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act and Sections 608 and 613,
may otherwise deal with
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the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law and shall be held
uninvested. The Trustee shall be under no liability for interest on any Money
received by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as shall be agreed to in writing between the Company and
the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to the
Trustee's negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs
and expenses (including the reasonable compensation and the expenses
and disbursements of its agents and counsel) of investigating or
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium, if any)
or interest on or any Additional Amounts with respect to Securities or any
Coupons appertaining thereto.
Subject to any other rights available to the Trustee under any
applicable bankruptcy law, when the Trustee incurs expenses or renders services
after an Event of Default specified in clause (5) or (6) of Section 501 has
occurred, the parties hereto and the Holders, by acceptance of the Securities,
hereby agree that such expenses and
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compensation for services are intended to constitute expenses of administration
under any applicable bankruptcy law.
The provisions of this Section 607 shall survive any defeasance of the
Securities in accordance with Article Thirteen, the payment of the Securities,
and the resignation and removal of the Trustee in accordance with Section 610.
SECTION 608. Disqualification; Conflicting Interests.
---------------------------------------
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act, including the optional provision of Section 310(b)(9) of
the Trust Indenture Act, permitted by the second sentence thereof. Furthermore,
the conflict of interest provisions of Section 310(b)(1) of the Trust Indenture
Act regarding conflicts arising between different indentures shall also apply to
any conflicts arising between series of Securities issued under this indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $10,000,000 subject to supervision or examination by Federal or
State authority. If such corporation 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 corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. No
obligor upon the Securities or Person directly or indirectly controlling,
controlled by, or under common control with such obligor shall serve as Trustee
upon the Securities. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(2) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
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(3) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(b) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) subject to Section
315(e) of the Trust Indenture Act and Section 514, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of such
Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect of the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and shall comply with
the applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself or
herself and all
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others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(6) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
--------------------------------------
(1) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties hereunder of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and Money held by such retiring Trustee hereunder, subject nevertheless
to its claim, if any, provided for in Section 607.
(2) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (b)
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
(c) 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 execution and delivery of such supplemental
indenture the resignation or removal of the
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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.
(3) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (1) or (2) of this Section, as the case may be.
(4) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
--------
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee is subject to 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 614. Appointment of Authenticating Agent.
-----------------------------------
At any time when any of the Securities of one or more series remain
outstanding, the Trustee may appoint an Authenticating Agent or Agents with
respect to Securities of one or more series which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series, and Securities
so authenticated shall be entitled to the benefits hereof and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made herein to the authentication and delivery of
Securities by the Trustee or the Trustee's certificate of authentication, such
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reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States, any State thereof or the District of Columbia, authorized under such
laws to act as Authenticating Agent, having a combined capital and surplus of
not less than $10,000,000 and subject to supervision or examination by Federal
or State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail notice of such
appointment by first class mail, postage prepaid to each Holder of Registered
Securities of the series, if any, with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register,
and (ii) if Securities of the series are issued as Bearer Securities, publish
notice of such appointment at least once in an Authorized Newspaper in the place
where such successor Authenticating Agent has its principal office if such
office is located outside the United States. 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
provisions of Section 607 shall also apply to any Authenticating Agent.
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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The provisions of Sections 308, 604 and 605 shall be applicable to
each Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more
series of Securities pursuant to this Section, the Securities of such series may
have endorsed thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
_______________________________
as Trustee
By ____________________________
as Authenticating Agent
By ____________________________
Authorized Signatory
If all of the Securities of any 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 where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.
SECTION 615. Other Capacities.
----------------
Except as otherwise specifically provided herein, (i) all references
in this Indenture to the Trustee shall be deemed to refer to the Trustee in its
capacity as Trustee and in its capacities as Security Registrar and Paying Agent
and (ii) every provision of this Indenture relating to the conduct or affecting
the liability or offering protection, immunity or indemnity to the Trustee shall
be deemed to apply with the same force and effect to the Trustee acting in its
capacities as Paying Agent and Security Registrar.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
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In accordance with Section 312(a) of the Trust Indenture Act, the
Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, either (a) not later than January 31 and July 31 in
each year in the case of Original Issue Discount Securities of any
series which by their terms do not bear interest prior to Maturity, or
(b) not more than 15 days after each Regular Record Date in the case
of Registered Securities of any other series, a list, each in such
form as the Trustee may reasonably require, of the names and addresses
of the Holders of Registered Securities of such series as of the
preceding January 16 or July 16 or as of such Regular Record Date, as
the case may be; and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
The Trustee shall comply with the obligations imposed upon it pursuant
to Section 312 of the Trust Indenture Act.
Every Holder of Securities or Coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 312 of the Trust Indenture Act, regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 312(b) of the Trust Indenture Act.
SECTION 703. Reports by Trustee.
------------------
(1) Within 60 days after May 15 of each year commencing with the first
May 15 following the first issuance of Securities pursuant to Section 301, if
required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(2) The Trustee shall transmit the reports required by Section 313(b)
of the Trust Indenture Act and Section 602 at the times specified therein.
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(3) Reports pursuant to this Section shall be transmitted in the
manner and to the persons required by Sections 313(c) and 313(d) of the Trust
Indenture Act.
(4) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704. Reports by Company.
------------------
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Securities Exchange Act
of 1934 in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations;
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing
thereof with the Trustee, in the manner and to the extent provided in
Section 313(c) of the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission; and
(4) furnish to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive officer, principal financial
officer or principal accounting officer of the Company as to his or
her knowledge of the Company's compliance with all conditions and
covenants under this
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Indenture. For purposes of this paragraph, such compliance shall be
determined without regard to any period of grace or requirement of
notice provided under this Indenture. A written statement satisfying
the requirements of Section 1008(a) of this Indenture will be deemed
to satisfy the requirements of this Section 704(4).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties
and assets of the Company substantially as an entirety shall be a
corporation, limited liability company, partnership or trust, shall be
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if any) and
interest on and any Additional Amounts payable with respect to, all
the Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be
continuing; and
(3) subject to Sections 601 and 603, either the Company or the
successor Person has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture
is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
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<PAGE>
SECTION 802. Successor Corporation Substituted.
---------------------------------
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities and Coupons.
SECTION 803. Officers' Certificate and Opinion of Counsel.
--------------------------------------------
The Trustee, subject to the provisions of Sections 601 and 603, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and any
such assumption, complies with the provisions of this Article.
ARTICLE NINE
SUPPLEMENTAL INDENTURE
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or Coupons, 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 Person 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;
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance
of Securities in bearer form, registrable or not registrable as to
principal, and
57
<PAGE>
with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form;
(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 entitled to
the benefit of such provision;
(6) to secure the Securities;
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611;
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall not
--------
adversely affect the interests of the Holders of Securities of any
series or any Coupons appertaining thereto in any material respect;
(10) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of
this Indenture under the Trust Indenture Act or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required under the Trust
Indenture Act;
(11) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of,
any premium or interest on or any Additional Amounts with respect to
Securities, to permit Registered Securities to be exchanged for Bearer
Securities, to permit Bearer Securities to be exchanged for Bearer
Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided
any such action shall not adversely affect the interests of the
Holders of Securities of any series or any Coupons appertaining
thereto in any material respect;
(12) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth;
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<PAGE>
(13) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of Securities pursuant to Article
Thirteen; provided that any such action shall not adversely affect the
interests of any Holder of a Security of such series and any Coupons
appertaining thereto or any other Security or Coupon in any material
respect; or
(14) to amend or supplement any provision contained herein or in any
supplemental indenture, provided that no such amendment or supplement
shall materially adversely affect the interests of the Holders of any
Securities then Outstanding.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than 66 2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, 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 shall, without the consent of the
- -------
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on or any Additional Amounts with respect
to, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any Additional Amounts payable in respect
thereof, or any premium payable upon the redemption thereof or
otherwise, or change the obligation of the Company to pay Additional
Amounts pursuant to Section 1004 (except as contemplated by Section
801(1) and permitted by Section 901(1), or reduce the amount of the
principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or adversely affect any right of repayment at
the option of the Holder of any Security, or reduce the amount of, or
postpone the date fixed for, the payment of any sinking fund or
analogous obligation, or change the Place of Payment or coin or
Currency in which any Security or any premium or the interest thereon
or any Additional Amounts with respect thereto 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, in the case of repayment at the
option of the Holder, on or after the date for repayment), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required
59
<PAGE>
for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture or reduce the requirements of Section
1504 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1009, except to increase any such percentage 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 1009, or the deletion of this proviso, in
accordance with the requirements of Sections 611(2) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
--------
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 315 of the Trust Indenture Act and Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise .
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
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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
and of any Coupons appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall,
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
---------
SECTION 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of the Holders of
each series of Securities that it will duly and punctually pay the principal of
(and premium, if any), interest on and any Additional Amounts payable with
respect to the Securities of that series in accordance with the terms of the
Securities, any Coupons appertaining thereto and this Indenture. Any principal
due on any Bearer Security shall be payable only upon presentation and surrender
of such Bearer Security and any interest due on and any Additional Amounts
payable with respect to Bearer Securities on or before Maturity, other than
Additional Amounts, if any, payable as provided in Section 1004 in respect of
principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several Coupons appertaining thereto for
such interest installments as are evidenced thereby as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in each Place of Payment for any series of
Securities (which Place of Payment shall include a location in the Borough of
Manhattan, The City of New York, State of New York) an Office or Agency where
Securities of that series (but not Bearer Securities, except as otherwise
provided below, unless such Place of Payment is located outside the United
States) may be presented or surrendered for
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<PAGE>
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 Bearer Securities, the Company will
maintain, subject to any laws or regulations applicable thereto, an Office or
Agency in a Place of Payment for such series which is located outside the United
States where Securities of such series and any Coupons appertaining thereto may
be presented and surrendered for payment (including payment of any Additional
Amounts payable on Securities of such series pursuant to Section 1004);
provided, however, that if the Securities of such series are listed on The Stock
Exchange of the United Kingdom and the Republic of Ireland or the Luxembourg
Stock Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, the Company will maintain a Paying Agent
in London, Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of such series are listed
on such exchange. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such Office or Agency. If at
any time the Company shall fail to maintain any such required Office or Agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee except that Bearer Securities of that
series and any Coupons appertaining thereto may be presented and surrendered for
payment (including payment of any Additional Amounts payable on Bearer
Securities of that series pursuant to Section 1004) at the place specified for
the purpose pursuant to Section 301, and the Company hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.
Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal, premium, interest or Additional Amounts on Bearer Securities shall be
made at any Office or Agency of the Company in the United States or by United
States Dollar 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, payment of principal of and any premium and interest in United States
dollars (including Additional Amounts payable in respect thereof) on any Bearer
Security may be made at the Corporate Trust Office of The Trustee or any Office
or Agency designated by the Company in the Borough of Manhattan, The City of New
York if (but only if) payment of the full amount of such principal, premium,
interest or Additional Amounts at all offices 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 no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an Office
or Agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
Office or Agency. Unless otherwise provided in
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or pursuant to this Indenture, the Company hereby designates as the Place of
Payment for each series the Borough of Manhattan, The City of New York, and
initially appoints the office of the Trustee at 55 Water Street, New York, New
York, as the Office or Agency for such purpose. Pursuant to Section 301(10) of
this Indenture, the Company may subsequently appoint an additional or different
place or places in the Borough of Manhattan, The City of New York where such
Securities may be payable.
Unless otherwise specified in an Officers' Certificate, the Company
hereby appoints the Trustee as its Paying Agent hereunder.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on or Additional Amounts with
respect to any of the Securities of that series, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest or Additional Amounts 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, prior to each due date of the principal of (and
premium, if any) or interest on or Additional Amounts with respect to any
Securities of that series, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest or Additional Amounts so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on or Additional Amounts with respect to
Securities of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on or
Additional Amounts with respect to 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.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such Money. Any Paying Agent shall also be entitled to the benefits and
protections afforded the Trustee under Article Six.
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) or interest on or any Additional Amounts with respect to any Security of
any series and remaining unclaimed for two years after such principal (and
premium, if any) or interest or any such Additional Amounts have become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security or
any Coupon appertaining thereto 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 of the Company cause to be published once, in an
Authorized Newspaper, notice that such Money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such Money then remaining will be
repaid to the Company. The Company shall have no right, title or interest in or
to any moneys held by the Trustee pursuant to this Section. The Trustee shall
not be liable to the company or any Holder for interest on funds held by the
Trustee for the payment and discharge of the principal, interest, or premium on
any of the Securities to any Holder
SECTION 1004. 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 any series or any
Coupon appertaining thereto Additional Amounts as provided therein. Whenever in
this Indenture there is mentioned, in any context, the payment of the principal
of (or premium, if any) or interest on, or in respect of, any Security of any
series or 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 ten 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
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Maturity, the first day on which a payment of principal (and premium, if any) is
made), and at least ten days prior to each date of payment of principal (and
premium, if any) 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 principal 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 (and
premium, if any) or interest on the Securities of that series shall be made to
Holders of Securities of that series or the Coupons appertaining thereto who are
United States Aliens 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 or in reliance upon the
failure of the Company to furnish any such certificate.
SECTION 1005. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the rights (charter and statutory) and franchises of the Company
and its Subsidiaries; provided, however, that the Company shall not be required
-------- -------
to preserve any such right or franchise if it shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and/or any Subsidiary and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
--------
however, that the Company shall not be required to pay or discharge or cause to
- -------
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1007. Limitation on Liens.
-------------------
The Company will not pledge or otherwise subject to any lien, any of
its property or assets unless the Securities are secured by such pledge or lien
equally and ratably with all other obligations secured thereby so long as such
other obligations shall
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be so secured; provided that such covenant will not apply to liens securing
obligations which do not in the aggregate at any one time outstanding exceed 10%
of Consolidated Net Tangible Assets of the Company and also will not apply to:
(1) Any lien or charge on any property, tangible or intangible, real
or personal, existing at the time of acquisition or construction of such
property (including acquisition through merger or consolidation) or given to
secure the payment of all or any part of the purchase or construction price
thereof or to secure any indebtedness incurred prior to, at the time of, or
within one year after, the acquisition or completion of construction thereof for
the purpose of financing all or any part of the purchase or construction price
thereof;
(2) Any liens securing the performance of any contract or undertaking
of the Company not directly or indirectly in connection with the borrowing of
Money, obtaining of advances or credit or the securing of debts, if made and
continuing in the ordinary course of business;
(3) Any lien to secure nonrecourse obligations in connection with the
Company's engaging in leveraged or single investor lease transactions;
(4) Any lien in favor of the United States or any state thereof or
the District of Columbia, or any agency, department or other instrumentality
thereof, to secure progress, advance, or other payments pursuant to any contract
or provision of any statute;
(5) Mechanics', materialmen's, carriers', or other like liens arising
in the ordinary course of business (including construction of facilities) in
respect of obligations which are not due or which are being contested in good
faith;
(6) Any lien arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or any body created or approved by
law or governmental regulations, which is required by law or governmental
regulation as a condition to the transaction of any business, or the exercise of
any privilege, franchise or license;
(7) Any liens for taxes, assessments or governmental charges or
levies not yet delinquent, or liens for taxes, assessments or governmental
charges or levies already delinquent but the validity of which is being
contested in good faith;
(8) Liens (including judgment liens) arising in connection with legal
proceedings so long as such proceedings are being contested in good faith and in
the case of judgment liens, execution thereof is stayed;
(9) Liens relating to secured indebtedness of the Company outstanding
on December 31, 1998; and
(10) Any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any lien referred to in the
foregoing
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clauses (1) to (9) inclusive, of this Section 1007, provided, however, that the
amount of any and all obligations and indebtedness secured thereby shall not
exceed the amount thereof so secured immediately prior to the time of such
extension, renewal or replacement and that such extension, renewal or
replacement shall be limited to all or a part of the property which secured the
charge or lien so extended, renewed or replaced (plus improvements on such
property).
SECTION 1008. Statement by Officers as to Default.
-----------------------------------
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, a written statement (which need not be contained in
or accompanied by an Officers' 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 his or her
supervision, and
(2) to the best of his or her knowledge, based on such review, (a) the
Company has complied with all the conditions and covenants imposed on
it under this Indenture throughout such year, or, if there has been a
default in the fulfillment of any such condition or covenant,
specifying each such default known to him or her and the nature and
status thereof, and (b) no event has occurred and is continuing which
is, or after notice or lapse of time or both would become, an Event of
Default, or, if such an event has occurred and is continuing,
specifying each such event known to him or her and the nature and
status thereof.
(b) The Company shall deliver to the Trustee, within five days after
the occurrence thereof, written notice of any event which after notice or lapse
of time or both would become an Event of Default.
SECTION 1009. Limitations on Incurrence of Obligations for Borrowed Money.
-----------------------------------------------------------
The Company will not create, assume, incur or otherwise become liable
in respect of, any
(a) Senior Debt unless the aggregate outstanding principal amount of
Senior Debt of the Company will not, at the time of such creation, assumption or
incurrence and after giving effect thereto and to any concurrent transactions,
exceed the greater of (i) 150% of Capital Base, or (ii) 225% of Tangible Net
Worth; and
(b) Non-Recourse Debt unless the aggregate principal amount of Senior
Debt and Non-Recourse Debt outstanding of the Company will not, at the time of
such creation, assumption or incurrence and after giving effect thereto and to
any concurrent transactions, exceed 225% of Capital Base.
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For any period during which the Company shall have a Subsidiary or
Subsidiaries, the limitations contained in this Section 1009 shall be applied to
the consolidated financial statements of the Company and its Subsidiaries.
SECTION 1010. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1004 to 1009, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect 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.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive compliance with any
term, provision or condition referred to in the immediately preceding paragraph.
If a record date is fixed, the Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to waive compliance
with any such term, provision or condition, whether or not such Holders remain
Holders after such record date: provided, that unless such requisite percentage
--------
in principal amount shall have been obtained prior to the date which is 90 days
after such record date, any such waiver previously given shall automatically and
without further action by any Holder be cancelled and of no further effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
------------------------
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable at the option of the Company in accordance with
their terms and (except as otherwise specified as contemplated by Section 301
for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at
the election of the Company of less than all the Securities of any series having
the same issue date, interest rate, Stated Maturity and other terms the Company
shall, at least 60 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date, of the tenor, if applicable, of
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the Securities to be redeemed, 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 1103. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series having the same issue
date, interest rate, Stated Maturity and other terms are to be redeemed (unless
all of the Securities of a specified tenor 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
subject to such redemption and 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 thereof) of
the principal amount of Registered Securities of such series or a denomination
larger than the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) 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 1104. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in Section
106 not less than 30 nor more than 60 days prior to the Redemption Date, unless
a shorter period is specified in the Securities to be redeemed. Failure to give
notice by mailing in the manner herein provided to the Holder of any Registered
Securities designated for redemption in whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
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(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed;
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder of such
Security will receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed;
(5) the CUSIP numbers of the Securities to be redeemed;
(6) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof to be redeemed
and, if applicable, that interest thereon will cease to accrue on and
after said date;
(7) the place or places where such Securities, together, in the case
of Bearer Securities with all Coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and any accrued interest and Additional
Amounts pertaining thereto;
(8) that the redemption is for a sinking fund, if such is the case;
(9) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all Coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing Coupon or Coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee and any Paying Agent is
furnished; and
(10) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not
subject to redemption on the Redemption Date pursuant to Section 305
or otherwise, the last date, as determined by the Company, on which
such exchanges may be made.
A notice of redemption published as contemplated by Section 106 need
not identify particular Registered Securities to be redeemed.
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 made in
writing at least 15 days prior to the last day upon which notice of redemption
may be given under this Section 1104, by the Trustee in the name and at the
expense of the Company.
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SECTION 1105. Deposit of Redemption Price.
---------------------------
On or prior to 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 1003) an amount of
Money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on and any Additional
Amounts with respect thereto, all the Securities or portions thereof which are
to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities or
portion thereof 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 (and any Additional Amounts) 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 upon
presentation and surrender of Coupons for such interest (at an office or agency
located outside the United States except as otherwise provided in Section 1002),
and provided, further, that, unless otherwise specified as contemplated by
Section 301 for Registered Securities of any series, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Registered Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of Section 307.
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 (and any Additional Amounts) represented by Coupons shall
be payable only upon presentation and surrender of those Coupons at an office or
agency located outside of the United States except as otherwise provided in
Section 1002.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
---------------------------
Any Registered 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 or her 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
of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered. If
a Global Security is so surrendered, the Company shall execute, and the Trustee
shall authenticate and deliver to the Depositary for such Security in global
form as shall be specified in the Company Order with respect thereto to the
Trustee, without service charge, a new Security in global form in a denomination
equal to and in exchange for the unredeemed portion of the principal of the
Global Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "MANDATORY SINKING
FUND PAYMENT," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "OPTIONAL
SINKING FUND PAYMENT." If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption), together in the case of Bearer
Securities of such series with all unmatured Coupons appertaining thereto, 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
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optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series; provided that such
--------
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Securities of any series in lieu of
cash payments pursuant to this Section 1202, the principal amount of Securities
of such series to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities of such series
for redemption, except upon Company Request, and such cash payment shall be held
by the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment; provided, however, that the Trustee or such Paying Agent shall at the
request of the Company from time to time pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon delivery by
the Company to the Trustee of Securities of that series purchased by the Company
having an unpaid principal amount equal to the cash payment requested to be
released to the Company.
SECTION 1203. 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 mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 1202, and the optional amount, if any, to be
added in cash to the next ensuing mandatory sinking fund payment, and will also
deliver to the Trustee any Securities to be so credited and not theretofore
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Applicability of Article; Company's Option to Effect Defeasance
---------------------------------------------------------------
or Covenant Defeasance.
----------------------
Unless otherwise provided pursuant to Section 301, this Article
Thirteen shall be applicable to the Securities of such series and any Coupons
appertaining thereto, and the Company may at its option by or pursuant to Board
Resolution, at any time, with
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respect to the Securities of such series and any Coupons appertaining thereto,
elect to have either Section 1302 (if applicable) or Section 1303 (if
applicable) be applied to the Outstanding Securities of such series upon
compliance with the conditions set forth below in this Article Thirteen.
SECTION 1302. Defeasance and Discharge.
------------------------
Upon the Company's exercise of the above option applicable to this
Section, the Company shall be deemed to have been discharged from its
obligations with respect to the Outstanding Securities of such series and any
Coupons appertaining thereto on and after the date the conditions precedent set
forth below are satisfied but subject to satisfaction of the conditions
subsequent set forth below (hereinafter, "DEFEASANCE"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the Outstanding Securities of such series
and any Coupons appertaining thereto and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of Outstanding Securities of such series and any Coupons appertaining
thereto to receive, solely from the trust fund described in Section 1304 and as
more fully set forth in such Section, payments of the principal of (and premium,
if any) and interest on or Additional Amounts with respect to such Securities
and Coupons when such payments are due, (2) the Company's obligations with
respect to such Securities under Sections 304, 305, 306, 1002 and 1003 and such
obligations as shall be ancillary thereto, (3) the rights, powers, trusts,
duties, indemnities, immunities and other provisions in respect of the Trustee
hereunder and (4) this Article Thirteen. Subject to compliance with this
Article Thirteen, the Company may exercise its option under this Section 1302
notwithstanding the prior exercise of its option under Section 1303 with respect
to the Securities of such series. Following a defeasance, payment of the
Securities of such series may not be accelerated because of an Event of Default.
SECTION 1303. Covenant Defeasance.
-------------------
Upon the Company's exercise of the above option applicable to this
Section, the Company shall be released from its obligations under Sections 1004
through 1009 (and any other Sections applicable to such Securities that are
determined pursuant to Section 301 to be subject to this provision) and the
occurrence of an Event of Default specified in Section 501(4) (insofar as it is
with respect to Sections 1004 through 1009 or any other Section applicable to
such Securities that are determined pursuant to Section 301 to be subject to
this provision) or Section 501(4) shall be deemed not to be an Event of Default
with respect to the Outstanding Securities of such series on and after the date
the conditions precedent set forth below are satisfied but subject to
satisfaction of the conditions subsequent set forth below (hereinafter,
"COVENANT DEFEASANCE"). For this purpose, such covenant defeasance means that,
with respect to the Outstanding Securities of such series, the Company may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section, whether directly
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<PAGE>
or indirectly by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein or
in any other document, but the remainder of this Indenture and such Securities
shall be unaffected thereby. Following a covenant defeasance, payment of the
Securities of such series may not be accelerated because of an Event of Default
specified in Section 501(4) or by reference to such other Section specified
above in this Section 1303.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions precedent or, as specifically
noted below, subsequent to application of either Section 1302 or Section 1303 to
the Outstanding Securities of such series:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to comply with the
provisions of this Article Thirteen applicable to it) as trust funds
in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities, (a) Money in an amount, or
(b) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, Money in an amount, or (c) a combination thereof, sufficient,
without reinvestment, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium, if any) and interest
on and Additional Amounts with respect to the Outstanding Securities
of such series to Maturity and (ii) any mandatory sinking fund
payments or analogous payments applicable to the Outstanding
Securities of such series on the due dates thereof. Before such a
deposit the Company may make arrangements satisfactory to the Trustee
for the redemption of Securities at a future date or dates in
accordance with Article Eleven, which shall be given effect in
applying the foregoing. For this purpose, "U.S. GOVERNMENT
OBLIGATIONS" means securities that are (a) direct obligations of the
United States of America for the payment of which its full faith and
credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act of
1933, as amended) as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian
for the account of the holder of such
75
<PAGE>
depository receipt, provided that (except as required by law) such
--------
custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
(2) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to the Securities
of such series shall have occurred and be continuing (a) on the date
of such deposit or (b) insofar as subsections 501(5) and (6) are
concerned, at any time during the period ending on the 123rd day after
the date of such deposit or, if longer, ending on the day following
the expiration of the longest preference period applicable to the
Company in respect of such deposit (it being understood that the
condition in this clause (2) is a condition subsequent and shall not
be deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not (a) cause the
Trustee for the Securities of such series to have a conflicting
interest as defined in Section 608 or for purposes of the Trust
Indenture Act with respect to any securities of the Company or (b)
result in the trust arising from such deposit to constitute, unless it
is qualified as, a regulated investment company under the Investment
Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company is
a party or by which it is bound.
(5) Such defeasance or covenant defeasance shall not cause any
Securities of such series then listed on any registered national
securities exchange under the Securities Exchange Act of 1934, as
amended, to be delisted.
(6) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (a)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (b) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
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<PAGE>
(7) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that
the Holders of the Outstanding Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred.
(8) Such defeasance or covenant defeasance shall be effected in
compliance with any additional terms, conditions or limitations which
may be imposed on the Company in connection therewith pursuant to
Section 301.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1302 or the covenant defeasance under Section 1303 (as
the case may be) have been complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
-------------------------------------------------------------
Trust; Other Miscellaneous Provisions.
-------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
Money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee -- collectively, for purposes of
this Section 1305, the "TRUSTEE") pursuant to Section 1304 in respect of the
Outstanding Securities of such series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (but not
including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest and
Additional Amounts, but such Money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Money or U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any Money
or U.S. Government Obligations held by it as provided in Section 1304 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
77
<PAGE>
Anything herein to the contrary notwithstanding, if and to the extent
the deposited Money or U.S. Government Obligations (or the proceeds thereof)
either (a) cannot be applied by the Trustee in accordance with this Section
because of a court order or (b) are for any reason insufficient in amount, then
the Company's obligations to pay principal of (and premium, if any) and interest
on and Additional Amounts with respect to the Securities of such series shall be
reinstated to the extent necessary to cover the deficiency on any due date for
payment. In any case specified in clause (a) of this paragraph, the Company's
interest in the deposited Money and U.S. Government Obligations (and proceeds
thereof) shall be reinstated to the extent the Company's payment obligations are
reinstated.
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
------------------------
Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in accordance with
the terms of the Securities of such series. The repayment of any principal
amount of such Securities pursuant to such option of the Holder to require
repayment of Securities before their Stated Maturity, for purposes of Section
309, shall not operate as a payment, redemption or satisfaction of the
indebtedness represented by such Securities unless and until the Company, at its
option, shall deliver or surrender the same to the Trustee with a directive that
such Securities be cancelled. Notwithstanding anything to the contrary
contained in this Section 1401, in connection with any repayment of Securities,
the Company may arrange for the purchase of any Securities by an agreement with
one or more investment bankers or other purchasers to purchase such Securities
by paying to the Holders of such Securities on or before the close of business
on the repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings.
----------------------------------
(1) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501,
to be
78
<PAGE>
held at such time and at such place in The City of New York, or, if
Securities of such series have been issued as Bearer Securities, in
London or such other place outside the United States, as the Trustee
shall determine. Notice of every meeting of Holders of Securities of
any series, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting,
shall be given, in the manner provided in Section 106, not less than
21 nor more than 180 days prior to the date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board
Resolution) or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee
to call a meeting of the Holders of Securities of such series for any
purpose specified in Section 1501, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting,
and the Trustee shall not have made the first publication or mailing
of the notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be
held as provided herein, then the Company or the Holders of
Securities of such series in the amount above specified, as the case
may be, may determine the time and the place in The City of New York,
or, if Securities of such series are to be issued as Bearer
Securities, in London for such meeting and may call such meeting for
such purposes by giving notice thereof as provided in subsection (1)
of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than 66-
2/3% in principal amount of the Outstanding Securities of a series, the Persons
entitled to vote 66-2/3% in principal amount of the Outstanding Securities of
such series shall constitute a quorum. In the absence of a quorum within 30
minutes after the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In
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<PAGE>
any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(1), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that, except
as limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of such series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not such Holders were present or represented at
the meeting.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
--------
(1) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Holders of Securities of such series in regard to
proof of the holding of Securities of such series and of the
appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or
80
<PAGE>
required by any such regulations, the holding of Securities shall be
proved in the manner specified in Section 104 and the appointment of
any proxy shall be proved in the manner specified in Section 104 or
by having the signature of the person executing the proxy witnessed
or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such
regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the
proof specified in Section 104 or other proof.
(2) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders of Securities as provided in
Section 1502(2), in which case the Company or the Holders of
Securities of the series calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount
of the Outstanding Securities of such series represented at the
meeting.
(3) At any meeting, each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 of principal
amount of Securities of such series held or represented by him or
her; provided, however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a
Holder of a Security of such series or proxy.
(4) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series
represented at the meeting; and the meeting may be held as so
adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be
81
<PAGE>
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 1502 and, if applicable, Section 1504.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
ARTICLE SIXTEEN
SECURITIES IN FOREIGN CURRENCIES
SECTION 1601. Applicability of Article.
------------------------
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series, any amount in
respect of any Security denominated in a currency other than Dollars shall be
treated for any such action or distribution as that amount of Dollars that could
be obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such action, determination of rights or distribution (or, if there shall be no
applicable record date, such other date reasonably proximate to the date of such
action, determination of rights or distribution) as the Company may specify in a
written notice to the Trustee or, in the absence of such written notice, as the
Trustee may determine.
* * * *
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
82
<PAGE>
IN WITNESS WHEREOF, 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.
NATIONWIDE HEALTH PROPERTIES, INC.,
a Maryland corporation
[SEAL]
By: ________________________________________
Name:
Title:
Attest:
By: _________________________
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By: ________________________________________
Name:
Title:
83
<PAGE>
EXHIBIT 5.1
O'MELVENY & MYERS LLP
610 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
January 15, 1999
614,055-111
Nationwide Health Properties, Inc.
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
Re: $500 Million Aggregate Principal
Amount of Debt Securities of
Nationwide Health Properties, Inc.
----------------------------------
Gentlemen:
At your request, we have examined the Registration Statement on Form
S-3 (the "Registration Statement") to be filed by Nationwide Health Properties,
Inc. (the "Company") with the Securities and Exchange Commission in connection
with the registration of $500 million aggregate principal amount of Debt
Securities (the "Securities"). We have examined the form of indenture (the
"Indenture") to be entered into between the Company and Chase Manhattan Bank and
Trust Company, as trustee (the "Trustee"), under which the Securities are to be
issued. We are familiar with the proceedings heretofore taken and proposed to
be taken by the Company in connection with the authorization, issuance and sale
of the Securities.
It is our opinion that the Securities will, upon payment for and
delivery of the Securities in accordance with the Indenture and the
authentication of the certificate or certificates representing the Securities by
a duly authorized signatory of the Trustee, be legally valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
(including, without limitation, fraudulent conveyance laws), and by general
principles of equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law, and subject to provisions of law which may
require that a judgment for money damages rendered by a court in the United
States be expressed in United States dollars.
The law governed by this opinion is limited to the present federal law
of the United States and the present law of the State of New York.
<PAGE>
We consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ O'Melveny & Myers LLP
2
<PAGE>
EXHIBIT 5.2
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071
January 15, 1999
OUR FILE NUMBER
614,055-111
Nationwide Health Properties, Inc.
610 Newport Center Drive, Suite 1150
Newport Beach, California 92660
RE: NATIONWIDE HEALTH PROPERTIES, INC. -- FORM S-3 REGISTRATION
-----------------------------------------------------------
STATEMENT
----------
Gentlemen:
In connection with the above Registration Statement regarding the proposed
issuance and sale of up to $500,000,000 aggregate principal amount of Debt
Securities of Nationwide Health Properties, Inc., a Maryland corporation (the
"Company"), you have requested our opinion whether the Company qualified as a
real estate investment trust (a "REIT") under sections 856 through 860 of the
Internal Revenue Code of 1986, as amended (the "Code"), for its taxable year
ended December 31, 1998 and whether it will continue to so qualify if it
operates subsequent to December 31, 1998 in the same manner as it has prior to
that date. You have also asked our opinion whether the Company should be
treated as the owner of its properties listed in the schedule which you provided
to us (the "Properties") for federal income tax purposes and whether the leases
with respect to such Properties (the "Leases") should be treated as true leases,
and not financing arrangements, for such purposes. All capitalized terms in
this opinion and not otherwise defined herein shall have the same respective
meanings as set forth in the Registration Statement.
As of August 19, 1998, we delivered our opinion (the "8/19/98 Opinion")
concerning the qualification of the Company as a REIT for its taxable year ended
December 31, 1997 and its continuing qualifications as a REIT if it operated
subsequent to June 30, 1998 in the same manner as it had prior to that date.
The 8/19/98 Opinion, and the certificates, documents and other materials
referred to therein, are hereby incorporated by reference. Since August 19,
1998, there have been delivered to us certain certificates and schedules
prepared and executed by Company personnel, setting forth certain factual
representations regarding the Company and its assets and operations. This
opinion specifically relies on such documents, certificates and schedules and
assumes that the facts represented therein are true and correct and will not
change in any material way so long as the Company seeks to qualify as a REIT.
<PAGE>
On the basis of the foregoing and subject to all of the qualifications,
conditions and factual assumptions set forth herein and in the 8/19/98 Opinion,
we are of the opinion that for the calendar year 1998, the Company met each of
the requirements for qualification as a REIT, and if the Company operates
subsequent to December 31, 1998 in the same manner as it has prior to such date,
it will continue to so qualify, provided that the various tests for
qualification as a REIT relating to its income, assets, distributions, ownership
and certain administrative matters are satisfied in those years. However, we are
unable to opine whether the Company will actually continue to qualify as a REIT
because such qualification will depend on future transactions and events which
cannot be known at this time
We also wish to advise you that on the basis of and in reliance on the
foregoing and on the facts set forth in the Registration Statement, it is the
opinion of O'Melveny & Myers LLP that under current law, including relevant
statutes, regulations, and judicial and administrative precedent (which law is
subject to change on a retroactive basis), a court, more likely than not, would
hold that the Company would be treated as the owner of the Properties for
federal income tax purposes and the Leases would be treated as true leases, and
not financing arrangements, for such purposes. You should be aware that this
opinion is not binding on the Internal Revenue Service and no assurance can be
given that the Internal Revenue Service may not successfully challenge the
conclusions set forth in this opinion. If the Internal Revenue Service
successfully challenged such conclusions, the Company would not be entitled to
claim depreciation with respect to the Properties and might be compelled to make
deficiency dividends to satisfy the 95% dividend distribution requirement or
lose its REIT status.
Respectfully submitted,
/s/ O'Melveny & Myers LLP
<PAGE>
EXHIBIT 12
----------
NATIONWIDE HEALTH PROPERTIES, INC.
STATEMENT REGARDING COMPUTATION OF RATIOS
(In thousands, except ratios)
<TABLE>
<CAPTION>
Nine
months
ended
Year ended December 31, Sept. 30,
---------------------------------------------------------------
1993 1994 1995 1996 1997 1998
--------------------------------------------------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges 7.63 5.52 4.44 3.64 3.03 3.22
Pretax income from continuing operations $40,996 $44,813 $50,371 $54,944 $63,817 $56,362
Interest and amortization of deferred financing costs 6,186 9,921 14,628 20,797 28,899 20,639
--------------------------------------------------------------- -------
"Earnings" $47,182 $54,734 $64,999 $75,741 $92,716 $77,001
=============================================================== =======
"Fixed charges" $6,186 $9,921 $14,628 $20,797 $30,550 $23,916
=============================================================== =======
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated January 16, 1998
included in Nationwide Health Properties, Inc.'s Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Orange County, California
January 15, 1999
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM T-1
Statement of Eligibility and Qualification 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)____
_________________________
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
95-4655078
(I.R.S. Employer Identification No.)
Suite 2725
101 California Street, San Francisco, California
(Address of principal executive offices)
94111
(Zip Code)
__________________
NATIONWIDE HEALTH PROPERTIES, INC..
(Exact name of Obligor as specified in its charter)
Maryland
(State or other jurisdiction of incorporation or organization)
95-3997619
(I.R.S. Employer Identification No.)
610 Newport Center Drive
Suite 1150
Newport Beach, California
(Address of principal executive offices)
92660
(Zip Code)
________________________________
Debt Securities
(Title of Indenture securities)
<PAGE>
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.
Comptroller of the Currency, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES
None
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility.
Exhibit 1. Articles of Association of the Trustee as Now in Effect (see
Exhibit 1 to Form T-1 filed in connection with Registration
Statement No. 333-41329 which is incorporated by reference).
Exhibit 2. Certificate of Authority of the Trustee to Commence Business
(see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 333-41329, which is incorporated by reference).
Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust Powers
(contained in Exhibit 2).
Exhibit 4. Existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed
in connection with Registration Statement No. 333-41329, which
is incorporated by reference).
Exhibit 5. Not Applicable
Exhibit 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. 333-41329, which is incorporated by
reference).
Exhibit 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.
Exhibit 8. Not Applicable
<PAGE>
Exhibit 9. Not Applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chase Manhattan Bank and Trust Company, National Association, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of San
Francisco, and State of California, on the 11th day of January, 1999.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By /s/ Cecil D. Bobey
-------------------
Cecil D. Bobey
Assistant Vice President
<PAGE>
EXHIBIT 7. Report of Condition of the Trustee.
- --------------------------------------------------------------------------------
CONSOLIDATED REPORT OF CONDITION OF Chase Manhattan Bank and Trust Company, N.A.
--------------------------------------------
(Legal Title)
LOCATED AT 1800 Century Park East, Ste. 400 Los Angeles, CA 94111
---------------------------------------------------------------------
(Street) (City) (State) (Zip)
AS OF CLOSE OF BUSINESS ON September 30, 1998
-----------------------
================================================================================
================================================================================
<TABLE>
<CAPTION>
ASSETS DOLLAR AMOUNTS IN THOUSANDS
<S> <C> <C> <C>
1. Cash and balances due from
a. Noninterest-bearing balances and currency and coin (1,2) 911
b. Interest bearing balances (3) 0
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A) 0
b. Available-for-sale securities (from Schedule RC-B, column D) 1,080
3. Federal Funds sold (4) and securities purchased agreements to resell 47,620
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C) 11
b. LESS: Allowance for loan and lease losses 0
c. LESS: Allocated transfer risk reserve 0
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 11
5. Trading assets 0
6. Premises and fixed assets (including capitalized leases) 350
7. Other real estate owned (from Schedule RC-M) 0
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M) 0
9. Customers liability to this bank on acceptances outstanding 0
10. Intangible assets (from Schedule RC-M) 1,470
11. Other assets (from Schedule RC-F) 3,288
12a. TOTAL ASSETS 54,730
b. Losses deferred pursuant to 12 U.S.C. 1823 (j) 0
c. Total assets and losses deferred pursuant to 12 U.S.C. 1823 (j)
(sum of items 12.a and 12.b) 54,730
</TABLE>
(1) includes cash items in process of collection and unposted debits.
(2) The amount reported in this item must be greater than or equal to the sum
of Schedule RC-M, items 3.a and 3.b
(3) includes time certificates of deposit not held for trading.
(4) Report "term federal funds sold" in Schedule RC, item 4.a "Loans and
leases, net of unearned income" and in Schedule RC-C, part 1.
5
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from
Schedule RC-E) 24,839
(1) Noninterest-bearing 6,558
(2) Interest-bearing 18,281
b. In foreign offices, Edge and Agreement subsidiaries, and IBF'
(1) Noninterest-bearing
(2) Interest-bearing
14. Federal funds purchased (2) and securities sold under agreements to
repurchase 0
15. a. Demand notes issued to the U.S. Treasury 0
b. Trading liabilities 0
16. Other borrowed money (includes mortgage indebtedness and obligations
under capitalized leases):
a. With a remaining maturity of one year or less 0
b. With a remaining maturity of more than one year through three years 0
c. With a remaining maturity of more than three years 0
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 0
19. Subordinated notes and Debentures (3) 0
20. Other liabilities (from Schedule RC-G) 5,033
21. Total liabilities (sum of items 13 through 20) 29,872
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus 0
24. Common stock-- 600
25. Surplus (exclude all surplus related to preferred stock) 12,590
26. a. Undivided profits and capital reserves 11,667
b. Net unrealized holding gains (losses) on available-for-sale securities 1
27. Cumulative foreign currency translation adjustments
28. a. Total equity capital (sum of items 23 through 27) 24,858
b. Losses deferred pursuant to 12 U.S.C. 1823 (j) 0
c. Total equity capital and losses deferred pursuant to 12 U.S.C. 1823 (j)
(sum of items 28.a and 28.b) 24,858
29. Total liabilities, equity capital, and losses deferred pursuant to 12 U.S.C.
1823 (j) (sum of items 21 and 28.c) 54,730
</TABLE>
================================================================================
================================================================================
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